Police Welfare Petrol Pump Vs DCIT (ITAT Jabalpur)
Material Facts
The assessee, a Police Welfare Society registered under Section 12A and approved under Section 80G of the Income-tax Act, operated a petrol pump and claimed exemption of its income as incidental to its charitable objects. The assessment under Section 143(3) resulted in additions after the Assessing Officer held the income was not eligible for exemption. Penalty proceedings under Section 270A were initiated, and penalty of 200% of the tax payable on under-reported income was levied. The CIT(A) upheld the penalty.
Procedural History
The appeal before the Tribunal was delayed by 437 days. The Tribunal condoned the delay, accepting the explanation that it resulted from bureaucratic delays in decision-making and not from any deliberate conduct.
Parties’ Submissions
The assessee submitted that all material facts relating to its activities, receipts and expenditure had been fully disclosed and that there was neither concealment nor furnishing of inaccurate particulars. It contended that the exemption claim was made under a bona fide belief. It was further submitted that the assessee had claimed 100% deduction instead of 50% under Section 80G due to a bona fide mistake.
The Revenue argued that the penalty had been imposed for misreporting of income under Section 270A(8), which permits levy of penalty at 200% of the tax payable.
