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TMI Blog2021 (12) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... vity not in the nature of any business or commerce and purely looks of an educational institutions. This fact asserts the submission made by the Ld. Counsel for the assessee that the society was under a bonafide belief that since it is an education institute, its income was exempt u/s 10(23C)(iiad) of the Act and as it was not carrying out any business activity, it was not required to get its books of account audited u/s 44AB. We are of the view that the finding of this Tribunal in the case of Sant Baba Rangi Ram Charitable Trust, Hoshiarpur [ 2012 (8) TMI 1121 - ITAT AMRITSAR.] is squarely applicable on the isuses raised in the instant appeal so much so that the assessee society is also running an educational institution and was unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42,000/- u/s 271B of the IT Act, 1961 without considering the contentions of the assessee raised during the course of appellate proceedings. 2. That the Ld. CIT(A), Bathinda erred on facts and law in confirming the penalty imposed by the AO at ₹ 42,000/- u/s 271B of the IT Act, 1961 despite the fact that the income of the assessee is exempt u/s 10(23)(C)(iiiad) of the Act as the assessee is running an educational institution solely for educational purposes and not for profit and the assessee was not required to get its books of account audited as provided u/s 44AB of the Act. 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or diposed off. 4. Brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t failed to succeed as Ld. CIT(A) confirmed the view taken by the Ld. Assessing Officer as the assessee failed to furnish necessary documents to prove that it is covered u/s 10(23C)(iiiad) of the Act. 6. Aggrieved the assessee is now in appeal before this Tribunal raising three grounds of appeal of which ground no. 1 and 2 relates to levey of penalty u/s 271B and ground no. 3 is general in nature. 7. Ld. Counsel for the assessee referring to the paper book dated 01.12.21 containing 30 pages and paper book dated 20.11.2019 containing 17 pages further stated that the assessee society is engaged in imparting education through a college run by the society. The assessee also filed a indemnity bond with the Punjabi University for affiliatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts mainly includes the fees received from college students for various educational courses imparted by the college. Prima facie the particulars of income and expenditure account looks to be from the activity not in the nature of any business or commerce and purely looks of an educational institutions. This fact asserts the submission made by the Ld. Counsel for the assessee that the society was under a bonafide belief that since it is an education institute, its income was exempt u/s 10(23C)(iiad) of the Act and as it was not carrying out any business activity, it was not required to get its books of account audited u/s 44AB of the Act. We find that under similar set of facts and circumstances, this Tribunal in the case of Sant Baba Rang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IV of the Act provides for computation of total income and section 44AB is only one of the sections enacted under Chapter IV-D dealing with computation of profits and gains of business or profession. Section 44AB becomes operative when there is computation of profits and gains of business or profession as a part of total income, whereas the income of the assessee trust is admittedly wholly exempt u/s 11 of the Act, which is part of Chapter III of the Act. And heading of Chapter III is incomes which do not form part of the total income . Therefore, the assessee is covered under Chapter III and no provisions of Chapter IV can be made applicable in the present case. Hence, provisions of section 44AB cannot be made applicable. The reliance m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The reliance has been placed on the following case laws: i) Hindustan Steel Ltd. vs. State of Orissa 83 ITR 26(SC) ii) ITO vs. Nanak Singh Guliani 171 CTR 195 (MP) iii) CIT vs. Abhyeshwar 153 CTR 372 (MP) iv) CIT vs. Tea King (2000) 158 CTR 413 (Guj) v) R. Wadiwala Co. vs. ACIT (2001) 72 TTJ (Ahd) 34 6.3. In the facts and the circumstances of the case, the AO is not justified in levying the penalty u/s 271B of the Act and he is directed to cancel the penalty so levied and accordingly, the order of the Ld. CIT(A) is reversed. Thus, all the grounds of appeal of the assessee are allowed. 10. On perusal of the above findings of the Tribunal and observing that the issues are almost similar, we are of the v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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