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1. These four appeals under Section 260A(1) of the Income Tax Act, 1961 (Act) are directed against the common order dated 25.11.2002 passed by the Income Tax Appellate Tribunal (Tribunal), Delhi Bench 'A' in ITA No 3631-3634/Del/98.

2. These proceedings concern the penalty levied on the appellant under Section 272A(2)(e) of the Act for the delay in filing income tax returns for the assessment years (AYs) 1990-91, 1991-92, 1995-96, 1996-97 and 1997-98. The period of delay and the corresponding penalty imposed are set out in the table below:

4. The Appellant claimed that for the relevant AYs its income was not taxable in view of the exemption under Section 10(22) read with Section 11 of the Act. According to the Appellant, as per its audited account, its income for the relevant AYs were as under:

  ASSTT       INCOME     FUNDS AS ON
YEAR                   31st MARCH
1990-91     14,521     35,656
1991-92      1,097     35,753
1995-96  (-) 7,266     69,305
1996-97     13,364     82,689
1997-98     15,593     98,282

 

5. The Appellant claimed that initially its Chartered Accountant advised that since the income of the Appellant was below the taxable limit, it was not required to file any return of income for the above AYs. Later, the Chartered Accountant reconsidered his opinion and advised that with a view to avoiding any complication arising under Section 139(4A) of the Act, the Appellant should file its returns. Accordingly, on 15.9.1998 and 17.9.1998 the Appellant filed returns for the aforementioned AYs declaring Nil income. It is not in dispute that these returns were accepted by the Department. However, since the returns were filed belatedly, the Assessing Officer (AO) referred the case to the Joint Director of Income Tax (Exemption) for initiating penalty proceeding under Section 272A(2)(e) of the Act.

6. It is the case of the Department that a notice under Section 272A(2)(e) was issued to the appellant on three dates, i.e., 10.9.1999, 4.2.2000 and 2.3.2000 for each AY for which the return was filed late and that the Appellant assessed did not respond to any of these notices. Consequently, on 22.7.2003 the Joint Director passed an order levying separate penalties for each of the AYs in the amounts indicated hereinabove.

7. The Appellant filed appeals before the Commissioner of Income Tax (CIT) (Appeals) assailing the levy of penalty. It was urged before the CIT (Appeals) that "after filing the return of income, no notice whatsoever was received by the assessed." It was further stated that "as alleged in the order under Appeal, no notice under Section 272A(2)(e) of the Act for the above assessment years was served on the assessed or its representative." Apart from contending that the Appellant was not afforded an opportunity by the AO of adducing evidence relevant to the question of penalty, the Appellant also filed an application before the CIT (A) under Rule 46A of the Income Tax Rules seeking place on record a copy of the income and expenditure account and supporting details as evidence in support of its claim for withdrawing the penalty.

9. The CIT (Appeals) nevertheless also dealt with the case on merits and held as follows:

In view of the admitted claim of exemption under Sections 11 and 12 by the appellant [and not under Section 10(22)] in the returns of income filed, the appellant's case is squarely covered by the provisions of Section 139(4A) read with Section 139(1), infringement whereof is clearly covered by the penalty proceedings under Section 272A(2)(e). It is also seen that the instant appeal has been argued by top notch C As/lawyers and as such, it is also not clear that if the appellant was in doubt regarding the filing of the returns why it could not consult the battery of legal luminaries whom it has consulted during the appellate proceedings.