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TMI Blog2021 (12) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... of the considered opinion, there was a reasonable cause for the assessee for the delay and the case laws referred above are duly applicable. Hence, in the background of aforesaid discussion and precedent, we set aside the orders of the authorities below and delete the penalty. We find that assessee s plea in the present case duly falls under the ken of aforesaid case laws wherein similar penalty has been deleted. No contrary decision has been produced before us. As held by Hon ble Supreme Court in Motilal Padampat Sugar Mills' [ 1978 (12) TMI 45 - SUPREME COURT] that there is no presumption that everyone known law. - Decided in favour of assessee. - ITA Nos. 1465 to 1470/Mum/2020 - - - Dated:- 12-11-2021 - Shri Shamim Yahya (AM) And Shri Saktijit Dey (JM) Assessee by : Shri Pradeep D. Kamthekar Revenue by : Shri S.N.Kabra ORDER Per Shamim Yahya(A.M.).: These appeals by the Assessee are directed against the respective orders of the learned Commissioner of Income Tax (Appeals), Mumbai ( ld.CIT(A) for short) pertain to the respective assessment years as above. 2. Since the issues are common and connected and the appeals were heard together, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 and 01.08.2014. 6. The AO has reproduced the assessee s submissions in this regard as under:- The University of Mumbai is regulated under the Maharashtra Universities Act, 1994. The University of Mumbai is controlled and funded by the Government of Maharashtra/!he Central Government. The Departments/Institutions of the University of Mumbai are situated in various campuses in the city of Mumbai including a Sub- Centre at Ratnagiri. The financial transactions are recorded under the minor heads/detailed heads prescribed in accordance with the provisions of the University of Mumbai Accounts Code. Later on all these accounts which are maintained in various University Departments/Institutions or campuses, are compiled centrally, audited by the Statutory auditor and then presented to the Senate as required by Section 104 of the Maharashtra Universities Act. 1994. An extract of the said Act is enclosed and marked Annexure I. In view of the multiplicity of the locations where accounts are maintained, being various account heads and different funds and many campuses and Sub-centres in various districts, the compilation of accounts has proved to be a very complex and tedious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3C') In the case of Bangalore University in ITA No. 398/Bang/2007 vide order dt. 28th March. 2008, held that in case in a year fees collected from students exceed the grants received from the Government will not render it outside the purview of being on educational institution existing solely for the education purpose. The fact that the university was being hitherto rim by the Government funds cannot be ignored. Merely for the reason that the educational institution has surplus funds, it would not ipso facto lead to an inevitable conclusion that an educational institution exists for making profits and not solely for educational purposes. Therefore, the income of the University is exempt from tax. The fact that the income of (he University is exempt U/s. 10(23C) (iiiab) is also accepted by the Department as the return showing Nil Income being exempted U/s. 10(23C) (iiiab) have been accepted by the Department in the past. The objects of the Mumbai University are spelt in Section 4 of The Maharashtra University Act, 1994 . The Main objects of the University as mentioned in the Maharashtra Universities act, 197], is as follows ; The objects of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans generally to improve the governance of the university and facility it provides for higher education; (14) to generate and promote a sense of self-respect and dignity amongst the weaker sections of the society; (15) to .strive to promote competitive merit and excellence as the sole guiding criterion in all academic and other matters relating to students. Thus, as stated earlier, the' University is existing solely for (he educational purposes. Further, Section 139(4A) which is applicable to the Charitable Trust and the University of Mumbai being not a Charitable Trust, is not, therefore, applicable in the case of University. Section 139(1) is also not applicable as the total income of the University being exempt cannot exceed the maximum amount which is not chargeable to Income Tax. Ordinarily, therefore, it is not incumbent on the University to file the return of income either U/s. 139(1) or I39(4A). We may invite your attention to the judgments in the case of Addnl. Director of Income Tax vs. M.D. Memorial Charitable and Educational Society in which the Delhi 'E' Bench of the Income Tax Appellate Tribunal held that the penalty U/s. 272A(2)(e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. We also enclose an article published in CTR publications titled Return and Trusts. The same is enclosed and marked Annexure 4. 14. In view of (he above, the penalty proceedings be dropped and the delay be condoned. 7. The AO did not accept the assessee s explanation. He did not deal with the any of the case law mentioned by the assessee. He did not deal with the reasonable cause attributed that assessee was under an honest belief that assessee was not required to file return of income under the provisions of the Act. He held as under:- (1) The assessee has claimed that due to multiplicity of locations where accounts are maintained, compilation of accounts is a very complex and tedious process. This argument of the assessee is unacceptable since most large companies have operations spread out over distant geographic locations, yet they file their income tax returns in time. Moreover, it can in no way justify delay of 35 months. (2) The assessee has claimed that it was under an honest belief that since its income is exempt U/s. 10(22)710(23C) of the Income Tax Act, 1961, it is not obligatory on its part to file the return. This argument is unacceptable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-clause (iiiab) and (iiiac) of clause 23C, subject to specified conditions, is available to such university or educational institution which is wholly or substantially financed by the Government. Under the existing provisions of section 139, all entities whose is exempt under clause (23C) of Section 10, other than those referred to in sub-clauses (iiiab) and (iiac) of the said clause, are mandatorily required to file their return of income It is proposed to amend the Act in order to provide that entities covered under clauses (iiiab) and (iiiac) of clause (23C) of section 10 shall be mandatory required to file their return on income. This amendment shall take effect from 1st April, 2016 and will accordingly, apply in relation to assessment year 2016-17 and subsequent years. Thus University submits that there was no mandatory requirement to file the return of income for the year under consideration. ii. Shyam Gopal Charitable Trust vs. DIT( E) 290 ITR 99 (Del) Annex-2 Where assessee did not file return of income on the initial advice of its chartered accountant that it was not required to file any return for the relevant assessment years. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide belief that the offender is not liable to act in the manner prescribed by the statute. Hindustan Steel Ltd. vs. State of Orissa 83 ITR 26 (SC) Respected Commissioner of Income Tax - Appeals is hereby requested to delete the penalty levied by learned A.O. u/s 272(A)(2)(e) of I.T. Act, 1961 in the light of above submissions. 10. The Ld.CIT(A) did not advert to any of the case laws or the reasonable cause of delay attributed by the assessee.He proceeded to hold that if the assessee was under any bonafide belief that it was not required to file its return of income, then, there could not be any reason to file its return of income on 25/08/2019, which was after a delay of 1060 days. He further held that even if assessee income was exempt under section 10(23C) then too such claim of exemption has to be made in the return of income. Further, he dismissed the claim of reasonable cause and he further rejected the assessee s contentions to keep the penalty proceedings in abeyance as the quantum proceedings were going on. 11. Against the above order, assessee is in appeal before us. 12. We have heard both the parties and perused the record. We find that assessee has submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose income is exempt under clause (23C) of Section 10 were not required to file return of income. The Ld.CIT(A) has noted the following submissions of the assessee in this regard. Furnishing of return of income by certain universities and hospitals referred to in section 10(23C) of the Act: Under the provisions of section 10 of the \Act, exemption under sub-clause (iiiab) and (iiiac) of clause 23C, subject to specified conditions, is available to such university or educational institution which is wholly or substantially financed by the Government. Under the existing provisions of section 139, all entities whose is exempt under clause (23C) of Section 10, other than those referred to in sub-clauses (iiiab) and (iiac) of the said clause, are mandatorily required to file their return of income It is proposed to amend the Act in order to provide that entities covered under clauses (iiiab) and (iiiac) of clause (23C) of section 10 shall be mandatory required to file their return on income. This amendment shall take effect from 1st April, 2016 and will accordingly, apply in relation to assessment year 2016-17 and subsequent years. Thus University submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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