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TMI Blog2023 (8) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... ly brought the facts above to the notice of the A.O., the latter would have, at his behest, issued notice u/s. 148 of the Act. We are afraid that the assessee chose to adopt an evasive approach, sat tight, and filed its return of income for the year under consideration only after notice u/s. 148 of the Act was issued to him on 30.03.2019 at the instance of the A.O. Conduct of the assessee as observed by us hereinabove does not inspire any confidence as regards his claim of holding a bonafide belief that having been registered u/s 12A, no obligation was cast upon it to file return of income. Our conviction above is fortified by the fact that the assessee despite being well conversant about its obligation to file its return of income on 25.09.2014 (supra), had still not taken any step for facilitating the filing of its return of income for the year under consideration. As Section 272A(2)(e) did cast an obligation on the assessee trust to furnish its return of income under sub-section (4A) of section 139 of the Act, which in turn, refers to the period contemplated under sub-section (1) of Section 139 of the Act; or to furnish the same within the period and manner prescribed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 (in short the Act ) dated 19.01.2022 for the assessment year 2012-13. The assessee has assailed the impugned order on the following grounds of appeal: 1. In the facts and circumstances of the case, Ld. CIT(A) erred in confirming penalty of Rs. 2,55,800/- levied by the A.O u/s. 272A(2)(e). The penalty levied by the A.O and confirmed by the Ld. CIT(A) is arbitrary, illegal and not justified. 2. The appellant reserves the right to add, amend or modify any of the ground/s of appeal. 2. Succinctly stated, the assessee trust is running an educational institution viz. Bethany College Nursing. Based on information received by the department that though the assessee trust had deposited cash in its savings bank account and also received interest during the year under consideration but had not filed its return of income, the A.O. called upon it to file its return of income for the year under consideration. As the assessee did not comply with the directions of the A.O. and failed to file its return of income, its case was reopened u/s. 147 of the Act. Notice u/s. 148 of the Act dated 30.03.2019 was issued to the assessee. The assessee filed a return of income in complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied towards the charitable activities, no tax was payable for the assessment year under consideration hence provisions of filing of Income Tax Return is not applicable. However, immediately on being appraised, the income tax returns were filed for all the years without any further delay. The delay in filing the return was/not intentional or deliberate. In view of above the assessee requested to drop the penalty proceedings. 4. Observing, that submission of the assessee were not only devoid and bereft of any merits, but also that nobody could be permitted to plea of ignorance of law as an excuse, the A.O held a conviction that the assessee had violated provisions of Section 139(4A) of the Act without any plausible reasons, therefore, it was liable for penalty u/s. 272A(2)(e) of the Act. Accordingly, the A.O vide his order passed u/s. 272A(2)(e) of the Act dated 19.01.2022 imposed penalty of Rs. 2,55,800/- i.e. @100/- per day for the period of delay of 2558 days. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success. The CIT(Appeals) while upholding the penalty imposed by the A.O u/s. 272A(2)(e) of the Act observed as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t previous year. In the case of the appellant, the AO observed that the appellant had income which exceeded the maximum amount not chargeable to income tax without giving effect to the provisions of Section 11 and 12 of the Act, which the appellant had clearly violated the provisions of Section 139(4A) without any plausible reasons. Hence, the appellant is liable for penalty u/s. 272A(2)(e) of the Act for a sum of Rs. 100 for each day during which the failure continues and the AO proceeded to levy a penalty of Rs. 2,55,800/- as per working shown in the penalty order reproduced (supra). Against the penalty levied by the AO, the appellant preferred this appeal. 4.3 The appellant has submitted its written submission during the course of appellate proceedings and the same has been duly considered. The appellant has contended that there were genuine reasons for not filing the return of income within the stipulated time and the action of the AO in taking punitive action against the appellant was not called for as per the circumstances of the case and also as per the prevailing law in this regard. The appellant has stated that its office bearers were under the bonafide belief that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1). 5. Thus, in the case of the appellant, it is very clear that as per the provisions of Section 139(4A) of the Act, the appellant was required to furnish its return of income and as per the observations made by the AO in the reopening assessment order that the appellant had exceeded the maximum amount which is not chargeable to income tax, the appellant was liable to file its return of income of the A.Y. 2012-13. Since the appellant had failed to file the return of income for A.Y. 2012-13 within due of filing the return, the AO has rightly levied the penalty of Rs. 2,55,800/- u/s. 272A(2)(e) of the Act. The AO has rightly placed the reliance on the Hon'ble Supreme Court's judgment in the case of lzhar Ahmad Khan in taking view that ignorance of law is not an excuse and rejecting the contentions/reasons made by the appellant for not filing the return of income and therefore, no interference is called for in this regard as ignorance of law is not a ground. Hence, the penalty levied by the AO is hereby confirmed and Ground No. 4 raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration was due to a bonafide mistake, therein submitted that it had for the succeeding years, i.e., A.Y. 2013-14 onwards regularly filed its returns of income u/s. 139(1)/139(4A) of the Act. The Ld AR drew our attention to a Chart wherein details as regards returns of income filed by the assessee trust for A.Y. 2011-12 to A.Y. 2022-23 were mentioned as under: 10. We find that the Ld. AR, based on his contention above, had tried to impress upon us that now when the assessee is regularly filing its returns of income on a suo-motto basis, therefore, the fact that omission on its part to file a return of income for the year under consideration was prompted by bonafide reasons. 11. On a specific query by the Bench that now when the assessee trust had filed its return of income for A.Y. 2013-14 on 25.09.2014, then knowing well that it had failed to comply with its statutory obligation of filing the return of income for the preceding years, then, why necessary action to file the same was not taken, it was submitted by the Ld. AR that on 25.09.2014 (supra), no return of income u/s. 139(4) of the Act could have been filed for the year under consideration, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egularly filed its returns of income u/s. 139 of the Act, therein fortified the fat that the omission to file the return of income during the year under consideration, i.e., A.Y 2012-13 was prompted by a bonafide omission, the same does not find favor with us. On a careful perusal of the details provided by the assessee in the Chart above, it transpires that it had on 25.09.2014 filed its returns of income for both A.Y. 2013-14 [ u/s. 139(4) of the Act] and for A.Y. 2014-15 [u/s.139(1) of the Act]. Although it is the claim of the Ld. AR that on 25.09.2014 return of income for the preceding year, i.e., A.Y. 2012-13, could not be filed as the time limit for filing the same under sub-section (4) of Section 139 of the Act had lapsed on 31.03.2014; we are unable to find favor with the same. Admittedly, though the time for filing the return of income for the year under consideration, i.e., A.Y. 2012-13 under sub-section (4) of Section 139 of the Act, had lapsed on 25.09.2014, but are unable to fathom that as to why the assessee made no effort to get its return for the year under consideration, i.e., A.Y. 2012-13 regularized by filing a letter and bringing the aforesaid factual position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fault above u/s. 273B of the Act. In our view, as the facts involved in the present case of the assessee before us are distinguishable, the aforesaid judicial pronouncement would not support its claim. (C) Karandhai Tamil Sangam Vs. JCIT (2018) 172 ITD 272 (Chennai) As the Tribunal in the case of the captioned assessee had, while disposing of its quantum appeal, already accepted its claim that it was under a bonafide belief that no obligation was cast upon it to file its return of income, therefore, penalty u/s. 272A(2)(e) was cancelled. As the facts involved in the present case of the assessee before us are distinguishable as against those involved in the captioned case, the same would not advance the case of the assessee before us. (D) HTSL Community Service Trust Vs. JDIT (2012) 52 SOT 144 (Bang.) (URO) In the case above, it was observed by the Tribunal that penalty u/s. 272A(2)(e) of the Act for delay in filing of return of income could not be levied if there was sufficient/reasonable cause for delay in filing of the return of income. The Tribunal observed that there was no deliberateness or deceptiveness in not filing the return of income within the prescribed time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act; therefore, the penalty for the period falling thereafter could not have been imposed. Our aforesaid conviction is fortified by the order of the ITAT, Hyderabad, in the case of G Pulla Reddy Vs. JCIT (2010) 47 DTR 1 (Hyd.). The Tribunal observed that for levying penalty u/s. 272A(2)(e), the period of default was to be counted up to the time limit laid down in section 139(4) of the Act. For the sake of clarity, relevant observations of the Tribunal are culled out as under: 8.8. Further the argument of the assessee counsel is that the penalty to be levied for non filing the return of income to the period within which the assessee could have filed the return of income and it cannot be levied for an indefinite period till the default continues. We find force in this argument of the learned counsel for the assessee. The assessee cannot file a return of income after the time limit provided u/s 139(4) of the IT Act. In such circumstances even if the assessee files the return of income for any assessment year after the expiry of the time limit laid down u/s 139(4) it is invalid return. In view of this, we are of the opinion that for default u/s 272A(2)(e) of the IT Act, time limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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