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2015 (6) TMI 347 - AT - Income TaxPenalty levied by the AO u/s. 271(1)(c) - the assessee did not file the returns of income as per the provisions of Sec. 139 and the assessee was issued the notices u/s. 148 - Held that:- It is not in dispute that the assessee was treated as a local authority u/s. 10(20) of the Income-tax Act up to the A.Y. 2002-03. Subsequently, there was an amendment to section 10(2) of the Incometax Act and the APMC was removed from the definition of the local authority. It is pertinent to note that the Finance Act, 2008 has introduced Sub-sec. (26AAB) to Sec. 10 and again the income of the APMC has been exempted from tax. There is no dispute about the fact that APMC is constituted for Marketing of the Agricultural Produce helping the Agriculturists to get the better price in the open market and to avoid the brokers and agents. It appears that the collective efforts were made by the different APMCs in India after the amendment to Sec. 10(20) for getting exemption. Moreover, as per the facts on record the Govt. audit of the assessee for period ending on 30-09-2007 and 31-03- 2008 was completed on 14-07-2009 and hence, there was a delay in finalizing tax audit report. It is also seen that in both the assessment years the returns filed by the assessee were accepted without making any addition. We find that the Explanation 3 below Sec. 271(1)(c) which is deeming provision, is applicable to the assessee as period mentioned u/s. 153(1) has expired and then only the assessee filed the returns of income but at the same time the assessee can still avail the Explanation 1 to establish the bonafide for not filing the returns of income within the time allowed u/s. 139 of the Act. In the present case, we are of the opinion that the explanation of the assessee is bonafide for not filing the returns of income for both these assessment years within the meaning of Explanation 1 below Sec. 271(1)(c) of the Act and in our opinion no penalty can be levied on the assessee - Decided in favour of assessee.
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