TaxTMI 
TaxTMI 
2021 (12) TMI 536
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....as under the process of appointing new Counsel/Chartered Accountant to look into the matter the delay in filing of appeal was caused. It has prayed that the delay be condoned. Upon careful consideration and hearing the Ld. DR, we condone the delay in filing the appeal 4. The issue is in this appeal pertain to levy of penalty u/s. 272A(2)(e) for the following amounts for AY 2006-07,2007-08,2008-09,2009-10,2010-11 & 2011-12. Sr.No. Assessment Year Penalty (Amount Rs.) 1 2006-07 1,06,000/- 2 2007-08 99,000/- 3 2008-09 1,67.400/- 4 2009-10 1,30.900/- 5 2010-11 94,400/- 6 2011-12 57,900/- ITA No.1470/Mum/2020 for AY 2006-07 5. Since, the facts are common and orders of authorities are also identical, we are referring to the facts and figures from the AY 2006-07. The AO in the penalty order noted that the due date for filing return of income by the assessee for A.Y.2006-07 was 30.09.2006. The assessee did not voluntarily file its return of income within the time limit prescribed under the Income Tax Act. After duly recording reasons for income escaping assessment, notice u/s 148 of the I.T.Act was issued to ....
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.... financed by the Government; " Though the University charges fees from students as approved by (he Government and has oilier sources of income, deficit, if any, can be met through grants. Clause 3 of Section 102 of the said Act states that "The Salary fund shall consist of all amounts received from the State Government, Central Government or University Grants Commission towards full or part payment of the salary and allowances. No amount from this fund shall be utilised for the purpose other than payment of salary and allowances. " The above sufficiently endorses the fact that that the University is substantially financed by Government. Besides the University is existing solely for the educational purposes and is not for purposes of profit. Merely having surplus does not tantamount to profit as the surplus is not available for distribution as dividend and the surplus is utilized towards its object, namely - education. In the case of Sikkim Manipal University V/s. Asst. Commissioner of Income Tax. Kolkata Bench, it was held that "a perusal of Sec. 10(23C)(iiiab) shows that the educational institution should exist 'solely 'for educational purposes and not fo....
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....rmation by promoting basic attitudes and values of essence to national development; (5) to extend the benefits of knowledge and skills for development of individuals and society by associating the university closely with local and regional problems of development; (6) to carry out soda! responsibility as an informed and objective critic, to identify and cultivate talent, to train the right kind of leadership in all walks of life and to held younger generation to develop right attitudes, interests and values; (7) to promote equitable distribution of facilities of higher education; (8) to provide for efficient and responsive administration, scientific management and develop organisation of teaching, research and extension; (9) to promote acquisition of knowledge in a rapidly developing and changing society and to continually offer opportunities of upgrading knowledge, training and skills in the context of innovations, research and discovery in all fields of human endeavor by developing higher educational network with use of modern communication media and technologies appropriate for a learning society; (10) to promote national int....
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....escribed by the statute. Our clients rely on the judgment of (he Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa. 9. Based on its convictions, the University has filed an appeal against the aggrieved order and is expecting rifling in its favour. 10. In the past, the penalty proceedings initiated against the University have been dropped inter alia for the above reasons. A copy of the said order for A Y 2003-04 is enclosed and marked Annexure 2. for your ready reference. Besides, assessee being a University, lenient view needs to be taken. The assessee relics on the judgement passed in Slate Bank of India vs Additional Commissioner of Income Tax (TDS). 11. Further the assessee humbly submits that it had not acted deliberately in defiance of law and was not guilty of conduct contumacious or dishonest or acted in conscious disregard to its obligations. The assessee relies on the judgement passed in State Bank of India vs Additional Commissioner of Income Tax (TDS) 12. The Assessee relies of (he judgements passed in the following case-laws: a) Shri Bhandup Jain Temple vs DDIT reported in (1996) 56 TTJ (Bom) 104. ....
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....ective of merits of the issues involved, the assessee was liable to file its return of income within the time limit prescribed under the I.T.Act which has not been done. In view of the above reasons, it is held that the assessee has failed to prove that there was a reasonable cause for the delay in filing return of income, and that too of 1060 days. Hence, it is held that the assessee is liable for penalty u/s 272A(2)(e) of the IT Act. Penalty of Rs. 106,000-is-hereby levied @ Rs. 100 per day. 8. Against the above order, assessee is in appeal before the Ld.CIT(A). 9. Ld.CIT(A) also reproduced the submission of the assessee. Ld.CIT(A) inter-alia noted the following submission of the assessee. "The relevant provisions of section 139(4C) of the Act which reads as under: Every - (E) "fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub- clause (iiiab) or sub-clause (iiiad) or sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (lilac) or sub-clause (iiiae) or sub-clause (via) of clause (23C) of sect....
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....f this decision to the case of the University. iv. HTSL Community Service Trust vs. Joint Director of Income Tax (Exemption) reported in (2012) 31 CCH 0251 (Bang Trib) Annex-4. An attempt of deliberateness or deceptiveness is associated with the word "failure" - In the present case there was no deliberateness or deceptiveness in not filing the return of income within the prescribed time limit. The delay was not intentional or deliberate, hence penalty u/s 272(A)(2)(e) can not be levied. In the case of University also the delay occurred under circumstances mentioned above and it was not deliberate or intentional. Hence ratio of decision in this case applies to the facts of the case of the University. v. Vatavaran Trust vs. Joint Director of Income Tax (Exemption) (2006) 25 CCH 0093(Dei Trib) Annex-5. There was excess of expenditure over income in all assessment years, assessee 's belief that it was not obliged to file return of income u/$ 139(4A) was bona fide and this constituted reasonable cause , hence penalty u/s 272(A)(2) (e) is not leviable. In the case of University also, its bona fide belief that since its income is exempt u/s....
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....72(A)(2)(e) cannot be levied. That in the case of University also, the delay occurred under circumstances mentioned above and it was not deliberate or intentional. That hence ratio of decision in this case applies to the facts of the case of the University. Delhi Tribunal in the case of Vatavaran Trust 25CCCH 0093 and held that there was excess of expenditure over income in all assessment years, assessee's belief that it was not obliged to file return of income u/s. 139(4A) was bona fide and this constituted reasonable cause, hence penalty u/s. 272(A)(2) (e) is not leviable. In Akali Bba Phool Singh Education Trust (supra) Delhi Tribunal held that where assessee institution was under bona fide belief that its income is exmept u/s. 10(23C)(iiiab) and it was not required to file return of income, penalty imposed u/s. 273B is not justified. In the case of Shyam Gopal Charitable Trust vs CIT(E) 290 ITR 99 Hon'ble Delhi Court has held that where assessee did not file return of income on the initial advice of its chartered accountant that it was not required to file any return for the relevant assessment years. Therefore, there was reasonable cause within the meaning of section 273B for ....