Income Tax Appellate Tribunal - Mumbai
Nirgudkar Foundation , Mumbai vs Assessee on 12 August, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH 'B' : MUMBAI
BEFORE SHRI D.K. AGARWAL, (JUDICIAL MEMBER) AND
SHRI RAJENDRA SINGH,(ACCOUNTANT MEMBER)
ITA No.4992 to 4994/Mum/2010
Assessment Years : 2002-03; 2003-04 and 2004-05
Nirgudkar Foundation
1-736A, Ratan Jyoti
Parsi Colony, Rd. No.4
Dadar
Mumbai-400 014. .....(Appellant)
P.A. No.(AAATN 0171 D)
Vs.
Addl. DIT(E)
Range-II
Mumbai. .....(Respondent)
Appellant by : Shri Sanjay R. Parikh
Respondent by : Shri P.C. Maurya
Date of hearing : 12.8.2011
Date of pronouncement : 17th August, 2011
ORDER
Per Bench.
These appeals of the assessee are directed against different orders of CIT(A) all dated 19.1.2010 for the Assessment Years 2002- 03 to 2004-05. The only dispute raised these appeals is regarding levy of penalty under section 272 (A)(2)(e). Since identical issue is raised in all the appeals, these are being disposed of by single consolidated order for the sake of convenience.
2 ITA No.4992-94/M/10
A.Y:02-03 to 04-05
2. Briefly stated, facts of the case are that the assessee for the Assessment Years 2002-03 , 2003-04 and 2004-05 had filed returns of income on 29.3.2006 when as per provisions of law returns were due to be filed on 31.10.2003, 31.10.2004 and 31.10.2005 respectively. The AO, therefore, initiated penalty proceedings for levy of penalty under section 272 (A)(2)(e) for delay in filing of returns of income. However, no one appeared on behalf of the assessee to explain the delay and AO therefore, presumed that the assessee had no reasonable cause for delay in filing of returns and accordingly he levied penalty @ 100/- per day which came to Rs.1,24,100/-, 87,700/- and 51,300/- for the three years under reference. The assessee disputed the decision of the AO and submitted before the CIT(A) that the assessee had carried out charitable activities and therefore in case penalty are imposed the activity will have to be closed. It was submitted that the delay was because of the fact that the assessee was not having an accountant for a long time as capable persons were not ready to take up small jobs. It was also pointed out that there was no loss to the revenue as income was not taxable. The trustees offered sincere apology and requested that the same may be condoned and no penalty should be levied. The CIT(A) was however not satisfied by the arguments advanced and observed that there was no 3 ITA No.4992-94/M/10 A.Y:02-03 to 04-05 documentary evidence to show a reasonable cause of delay. He, therefore confirmed the penalty levied by AO aggrieved by which the assessee is in appeal before the Tribunal.
2.1 Before us, the ld. AR for the assessee submitted that the accounts for three years had been prepared on time. The then part- time accountant had informed the trustees that the returns had been filed. However, after the said accountant left and another part-time accountant was appointed, he informed the trustees that no returns had been filed. Thereafter returns were filed voluntarily. An affidavit to the above fact has been filed duly signed by the trustees which has been placed at page-29 of the paper book. The ld. AR also submitted that the net income was below taxable limit which has been accepted by the department. He referred to the P&L account for three years placed at pages - 2, 10 and 18 of the paper book showing that there was net income of Rs.2,875/-, Rs.27,677/- and Rs.2,294/- respectively. It was pointed out that under the provisions of section 139(4A), the trust is required to file return of income if income is above non taxable limit without considering exemption under section
11. In this case trust was registered under section 12A and income was exempt but even if exemption was not given, the income was within the non taxable limit and therefore, technically no returns were 4 ITA No.4992-94/M/10 A.Y:02-03 to 04-05 required to be filed. It was accordingly urged that the penalties levied should be deleted. The ld. DR on the other hand placed reliance on the orders of authorities below.
2.3 We have perused the records and considered the rival contentions carefully. The dispute is regarding levy of penalty under section 272(A)(2)(e) for late filing of returns of income. The returns for all the three years had been filed actually on 29.3.2006 when the due dates were 31.10.2003, 31.10.2004 and 31.10.2005 respectively. The delay has been explained on the ground that the trust's part time accountant had mis-informed the trustees that the returns had been filed. The trustees came to know of the de-fault only when the said accountant left and new part time accountant joined the trust who informed that no returns had been filed. Thereafter, the returns were filed voluntarily. The trust has filed affidavit in support of the above claim. We also note from the P&L accounts for the three years placed on record that net income was Rs.2875, Rs.27,677/- and Rs.2,294/- respectively for the three years. The trust was registered under section 12A about which there is no dispute and therefore, the income of the trust was eligible for exemption under section 11. However, even if exemption under section 11 is not considered, the income is below the non taxable limit. It has also been submitted that the 5 ITA No.4992-94/M/10 A.Y:02-03 to 04-05 returns filed have been accepted showing nil demand and this claim has not been controverted before us. Therefore, the trust in fact was not required to file return under the provision of section 139(4A). Considering the entirety of the facts and circumstances, in our view, levy of penalty is not justified. We, therefore, set aside the orders of the CIT(A) and delete the penalties levied.
4. In the result all the three appeals of the assessee are allowed. Order pronounced in the open court on 17.8.2011.
Sd/- Sd/-
(D.K. AGARWAL) (RAJENDRA SINGH )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Dated: 17.8.2011.
Jv.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The CIT(A) Concerned, Mumbai
The DR " " Bench
True Copy
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.