Appeal allowed, penalty imposed under Section 272A(2)(e), limited to until 31.03.2014. General grounds dismissed.

The Tribunal partly allowed the appeal, confirming the penalty's imposition under Section 272A(2)(e) for failure to file the return of income but limited the period for which it could be levied to up to 31.03.2014. The Tribunal dismissed the general grounds of appeal as not pressed.

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Issues Involved:
1. Validity of penalty imposed under Section 272A(2)(e) of the Income-tax Act, 1961.
2. Consideration of "reasonable cause" under Section 273B for failure to file the return of income.
3. Period for which penalty under Section 272A(2)(e) can be imposed.

Summary:

Issue 1: Validity of Penalty Imposed under Section 272A(2)(e)
The assessee trust, running an educational institution, failed to file its return of income for the assessment year 2012-13. The A.O. issued a notice under Section 148, but the return filed was considered invalid due to pending ITR-V/E verification. Consequently, the A.O. imposed a penalty of Rs. 2,55,800/- under Section 272A(2)(e) for failure to furnish the return of income as required under Section 139(4A). The CIT(A) upheld this penalty, rejecting the assessee's contention that it was under a bonafide belief that no return was required due to its registration under Section 12A.

Issue 2: Consideration of "Reasonable Cause" under Section 273B
The assessee argued that the failure to file the return was due to a bonafide belief that its income was exempt and managed by priests not well-versed in tax laws. However, the CIT(A) found these reasons unsatisfactory and not fitting the criteria of "reasonable cause" under Section 273B. The Tribunal also noted that the assessee had filed returns for subsequent years, indicating awareness of its obligations, thus rejecting the bonafide belief argument.

Issue 3: Period for Which Penalty Can Be Imposed
The Tribunal agreed with the assessee's alternative contention that the penalty under Section 272A(2)(e) should only be imposed for the period up to the time limit laid down in Section 139(4), i.e., up to 31.03.2014. The Tribunal directed the A.O. to recompute the penalty accordingly, limiting it to the period during which the return could have been validly filed under Section 139(4).

Conclusion:
The Tribunal partly allowed the appeal, confirming the penalty's imposition but limiting the period for which it could be levied to up to 31.03.2014, based on the provisions of Section 139(4). The general grounds of appeal were dismissed as not pressed.

Order Pronounced:
The appeal of the assessee is partly allowed, and the order was pronounced in open court on 21st August 2023.

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