Case Law Details
Rotary Charitable Trust Vs JCIT (ITAT Bengaluru)
The issue under consideration is whether the penalty levied by CIT(A) u/s 272A of the Income Tax Act, 1961 is justified in law?
In the present case, there was a delay in filing the return of income by the assessee, though it is undisputed that the income of the assessee was not chargeable to tax in view of the provisions of section 10(23C)(iiiad) of the Act. Against this issue CIT(A) has initiated the penalty proceeding u/s 272A of the Act.
ITAT states that the provisions of Sec.139(4A) makes a reference only to provisions of Sec.11 and 12 and not to the provisions of Sec.10(23C(iiiiad) of the Act. Under section 272A(2)(e) of the Act, failure to file Return of income in terms of section 139(4A) of the Act is liable to penalty of Rs.100/- for every day of delay. However, u/s 273B of the Act, no penalty u/s 272(A)(2)(e) of the Act can be levied, if failure to file Return of income was due to reasonable cause. In the instant case, the reasonable cause was that the President of the Trust was a very senior citizen of more than 80 years of age. He was under bonafide belief that since income of the Trust is exempt u/s 10(23C)(iiiad) of the Act, there was no requirement to file return of income. When the correct legal position was apprised, return of income was filed immediately.
Hence, ITAT are of the view that the penalty imposed deserves to be deleted.
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