Income Tax Appellate Tribunal - Mumbai
Shri Dadar (W. Rly) Sidhachakra ... vs Deputy Director Of Investigation (E) on 8 May, 1996
Equivalent citations: [1996]59ITD253(MUM)
ORDER
1. The assessee in this case is a charitable trust. It was required to file a return of income according to provision of section 139(4A) on or before 31-10-1990. It was, however, filed on 16-4-1993. The D.D.I. (Exemption) held that there being a delay of 897 days, minimum penalty at Rs. 89,700 was imposable on the assessee. The assessee went in appeal and, interalia, argued before CIT(A) that as per law the return of income could be filed only till 31-3-1992 after which the proceedings became time barred and hence the D.D.I.(E) was not justified in imposing penalty by calculating the period of delay up to 16-4-1993. It had also claimed that it was prevented by reasonable cause from filing the return but that ground was rejected by the learned CIT(A). The learned CIT(A), therefore, considered that the delay should be calculated up to 31-3-1992, i.e., 515 days and, therefor, reduced the penalty to Rs. 51,500.
2. While the assessee has come in appeal before me the revenue is not in appeal against the relief given by the learned CIT(A).
3. The learned counsel for the assessee argued that in the first instance since the assessment was time barred no penalty could be imposed. Secondly assessee's income had been accepted at Rs. 17,155 which below taxable limit and so no penalty should be imposed. The learned counsel heavily relied on the decision in the case of Shri Bhandup Jain Temple v. DDI(E) in IT Appeal No. 1910 (Bom.) of 1995 (SMC) in which learned Member had taken the view that since two views could be taken in the facts and circumstances of that case, the view favourable to the assessee should be followed and hence he had cancelled the penalty. The learned department representative (D.R.), on the other hand, claimed that the delay was of 897 days and the penalty should be sustained.
4. I have carefully considered the rival submissions and have perused the provisions of section 272A(2)(e). Sub-section (2)(e) reads as under :
"If any person fails -
(a) ..............................
(b) ..............................
(c) ..............................
(d) ..............................
(e) to furnish the return of income which he is required to furnish under sub-section (4A) of section 139 or to furnish it within the time allowed and in the manner required under that sub-section,
(f) ..............................
(g) ..............................
(h) ..............................
he shall pay, by way of penalty, a sum which shall not be less than one hundred rupees, but which may extend to two hundred rupees, for every day during which the failure continues :"
I find that these provisions are in noticeable contrast when read with the provisions of section 271(1) of the Income-tax Act which read as under :
"If the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) in the course of any proceedings under this Act, is satisfied that any person - ...."
It may be noticed that whereas penalty under section 271(1) and its sub-clauses can be initiated only during the course of any proceedings during which the concerned authority is satisfied about the default of any person, no such pre-condition is required in the provisions of section 272A of the Act. In other words, as simple reading of the provision of section 272A would make it clear that the penalties under this section have no correlation with the assessment proceedings, neither for their initiation, nor for their completion and hence penalties under various sub-clauses of sub-section (2) of section 272A may be initiated and imposed even if no assessment is made or the period during which the assessee could have legally filed the return has also expired as in this case. When considered in this light, it becomes irrelevant that the assessee could have legally filed its return of income only till 31-3-1992, and that it actually filed it on 16-4-1993. In this view of the matter, the penalty could have been computed till 16-4-1993 but since the revenue has not objected to the relief given by the CIT(A) and that matter is not before me, it is not relevant for the issue before me.
5. The next issue which has to be considered is that when assessee's total income was only Rs. 17,155 will it be justified to impose a penalty of Rs. 89,700 or Rs. 51,500 on the assessee. In this context I may mention that the learned CIT(A) has stated in his order that the assessee's total income before giving effect to the provisions of sections 11 and 12 of the Income-tax Act was Rs. 1,38,116. I need not mention that the provisions of section 139(4A) stipulate that if the total income of a charitable or religious trust as computed under the Income-tax Act, without giving effect to the provisions of sections 11 and 12 of the Income-tax Act exceeds the maximum amount which is not chargeable to Income-tax, it is required to furnish a return of such income of the previous year in similar manner as any other assessee is required to furnish under section 139(1) of the Income-tax Act. From what has been mentioned above it is clear that a total income of the assessee being Rs. 1,38,116 was much above the taxable limit before giving effect to provisions of sections 11 and 12 of the Income-tax Act and hence the assessee was under a legal obligation to file its return of income according to the provisions of section 139(4A) of the Income-tax Act. No satisfactory reason could be given either before the lower authorities or before me to show that the assessee was prevented by reasonable cause from filing the return in time. I agree with the view of the learned CIT(A) that when the trust has got an income of Rs. 1,38,116, which it is supposed to be spending in a regulated manner for the purposes for which it is supposed to be spending in a regulated manner for the purposes for which the trust is created and not for any illegal or unauthorised purpose, there is no reason why only when the question of complying with the statutory liability of filing its return of income comes it should take the plea that either the accountant was ill or it had no sufficient staff to look after these matters. Therefore, in my view no reasonable cause for the delay in filing the return is established.
6. So far as the question of quantum of penalty is concerned, since the Legislature in its wisdom has thought it fit to specify the minimum and the maximum quantum of penalty which has to be imposed in such cases, in my view I have no reason to ignore or modify this provision. In these circumstances I hold that no relief can be given to the assessee. The penalty imposed by the CIT(A) is, therefore, confirmed.
7. The appeal filed by the assessee is dismissed.