TaxTMI 
TaxTMI 
2006 (2) TMI 225
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....lty came to be imposed by the AO and confirmed by the CIT(A) are as follows: 2. The assessee is a registered trust. The assessee was issued a certificate under s. 12A(a) of the Act on 26th March, 1996, to have effect from 15th June, 1995. For the asst. yrs. 1996-97 to 2000-01, the assessee filed a return of income on 20th Aug., 2001. The provisions of s. 139(4A), read as follows: "(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub-cl. (iia) of cl. (24) of s. 2, shall, if the total income in respect of which he is assessable as a representative ....
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....at she was admitted in Apollo Hospital on 18th July, 1999 to 2nd Aug., 1999 for treatment for severe subarchnoid haemorrhage with CAD. The AO, however, rejected the plea of the assessee of reasonable cause. The AO has observed that the accounts of the trust were duly audited by a chartered accountant for all the assessment years well before the due date. The AO, therefore, found that the trust has been carrying on its normal activity and has duly maintained books of account and duly got them audited. In the circumstances, the plea of illness of Mrs. Iqbal Malik could not be accepted as a reasonable cause for the assessee's failure. 2.3 Aggrieved by the order of the AO, the assessee preferred appeals before the CIT(A). Besides reiterating....
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.... as per the P&L a/c, the assessee entertained a bona fide belief that there is no obligation to file return of income. The CIT(A), however, rejected this plea of the assessee for the reasons given in para 6 of his order, which reads as follows: "That if the receipts from property held under trust or voluntary contributions referred to in s. 2(24)(iia) without giving effect to the provisions of ss. 11 and 12 exceed the maximum amount which is not chargeable to income-tax, liability is cast on a trust to furnish a return of income and all the provisions of this Act shall apply as if it were a return required to be filed under s. 139(1). Thus, the moment the receipt of income derived from property held under trust or voluntary contributions....
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....income without giving effect to the provisions of ss. 11 and 12 should be more than the taxable limit. In the present case, although income from voluntary contributions which form part of the corpus of the trust may be exempt from taxation in view of s. 11(1)(d) which reads as under: 'Subject to the provisions of ss. 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income. Income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution.' But since no effect is to be given to the provisions of ss. 11 and 12 for the purpose of determining an assessee's liability to file return of i....
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....cause had to be established by the assessee by letting in evidence. He pointed out that no evidence had been filed by the assessee to prove the illness of Mrs. Iqbal Malik. It was pointed out by him that the plea of the assessee having incurred loss was raised for the first time before the CIT(A). On the interpretation of the provisions of s. 139(4A) he relied on the reasoning of the CIT(A). We have considered the rival submissions. As far as the plea of illness of Mrs. Iqbal Malik is concerned, we find that no evidence whatsoever had been let in by the assessee before the AO. Though we find that the AO had not rejected the explanation on this basis, the conclusion of the AO that there was no reasonable cause only goes to show that this ple....
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.... to show that the plea of bona fide belief entertained by the assessee had to be accepted. It is the plea of the assessee that the returns were filed voluntarily on the advice of a new chartered accountant, who had enlightened the assessee on the correct legal position. In the circumstances, we feel that the plea of bona fide belief raised by the assessee deserves to be accepted. It has been held by the Hon'ble Delhi High Court in the case of Woodward Governor India (P) Ltd. vs. CIT (2001) 168 CTR (Del) 394 : (2002) 253 ITR 745 (Del) that the word "reasonable cause" as applied to human action, is that which would constrain a person of average intelligence and ordinary prudence. It means an honest belief founded upon reasonable grounds, of t....