1997 (6) TMI 38 - AT - Income Tax

Application For Extension Assessment Year Charitable Or Religious Institution Delay In Filing Return Late Filing Levy Of Penalty Reasonable Cause Representative Assessee

Summary

Issues:
1. Levy of penalty under section 271(1)(a) for delay in filing the return of income by a charitable society.
2. Interpretation of section 139(4A) and whether it applies to all charitable trusts and institutions.
3. Analysis of the time-limit for filing the return of income under section 139(4A).
4. Consideration of reasonable cause for the delay in filing the return of income by the charitable society.

Detailed Analysis:
1. The judgment deals with an appeal filed by a charitable society against the penalty of Rs. 15,000 imposed under section 271(1)(a) for the delay in filing the return of income. The Assessing Officer upheld the penalty, which was later challenged before the ITAT.
2. The legal issue raised was whether the provisions of section 139(4A) applied to the assessee, a charitable society, as its total income was below the taxable level. The counsel for the assessee argued that the society was not obliged to file the return under section 139(1) and that section 139(4A) did not apply as the society was not a trust. However, the ITAT disagreed, stating that all charitable trusts and institutions, including societies, are bound by the provisions of section 139(4A).
3. The argument regarding the time-limit for filing the return under section 139(4A) was also addressed. The ITAT concluded that the expression "all the provisions of this Act shall apply as if it were a return required to be furnished under sub-section (1)" required the return to be filed within the time-limit prescribed under sub-section (1) of section 139.
4. The judgment further considered the reasonable cause for the delay in filing the return. It was argued that the delay was due to the actions of the deceased tax consultant who was handling the matter for the society. The ITAT found that there was a reasonable cause for the delay and decided to cancel the penalty, considering the charitable nature of the society and the circumstances surrounding the delay.

Overall, the ITAT allowed the appeal filed by the charitable society, canceling the penalty imposed for the delay in filing the return of income.