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2023 (11) TMI 844 - ITAT PUNEExemption u/s 11 denied - assessee was not granted registration u/s. 12A - Assessee urging that the matter be restored to the lower authorities for the reason that the assessee was granted registration by means of an order passed u/s. 12AA, which would apply to the year under consideration as well - HELD THAT:- Assessee had not furnished any return prior to notice u/s. 148. The solitary return was filed after the notice on 24-04-2019. The consequential assessment was completed u/s 147 of the Act on 17-12-2019 determining total income equal to the amount of income returned, which attained finality without any challenge thereto. The benefit of proviso can be granted only when the assessment proceedings are pending on the date of grant of registration by the ld. CIT(E). We are confronted with a situation in which the registration was granted by the ld. CIT(E) on 18-05-2023 and the assessment proceedings got concluded, much before that, on 17-12-2019.As such, the assessment year under consideration, namely, 2012-13, is not covered by the express mandate of the registration. Notwithstanding that, no benefit of exemption u/s. 11 was ever claimed in the return and, as such, there was no question of granting or denying such benefit also. In this view of the matter, the assessee cannot claim the benefit of exemption u/s. 11 for the year under consideration in any manner. Penalty u/s. 271(1)(c) - non filing the return of income within the stipulated time - shift of operations of the society from one city/station to another - Assessee furnished the return pursuant to notice u/s. 148 and the income declared was assessed as the total income - HELD THAT:- The main object of the assessee, consisting of surgeons across the country, is to attain higher Oral Maxillofacial surgical standards and to promote research in Oral and Maxillofacial surgery. The assessee was set up several years ago having and continuing to have its registered office in Pune. It, being an all India body of surgeons, keeps moving its area of operations and the relevant records on a certain frequency from one city to another. For the A.Y. 2012-13 to 2013-14, the operations of the society were in Mangalore and the audit was conducted by Mr. K. Santha Kumar, Chartered Accountant, Thrissur. Thus, for the year under consideration and the next year, the operations and the records were kept in Mangalore. From the A.Y. 2014-15, there was a shift of operations and the records from Thrissur to Faridabad, which continued up to the A.Y. 2018-19. Again, its operations came back to Pune with effect from the A.Y. 2019-20. It was during such earlier years, when the operations and records were outside Pune, that the concerned persons at the relevant stations got the accounts audited, but could not co-ordinate qua the filing the returns either because of misunderstanding or ignorance When the operations came back to Pune in the year 2018, the trustees realised that though the accounts were got audited for the earlier years, but neither the registration was sought nor the returns were filed for such earlier assessment years. Immediately, they swung into action and applied for registration u/s. 12AA on 07-10-2018 and also furnished the income-tax return for the A.Y. 2019-20. This shows that because of the regular shifting of the operations of the assessee-trust from one station to another and the resultant confusion about the correct person responsible for filing return, i.e. whether from the station where the operations were going on and records were kept or the registered office in Pune, the returns could not be filed for any of the assessment years prior to the A.Y. 2019-20. This constitutes a reasonable cause for which the return for the year under consideration could not be filed within the time prescribed u/s. 153 of the Act. We are satisfied that this being a reasonable cause, brings the case out of the purview of Explanation 3. If this Explanation fails to apply and we come back to examine the case within the terms of Explanation 1, the sequitur is that no penalty can be imposed in the absence of any addition or disallowance in the determination of total income by the AO. We, therefore, order to delete the penalty.
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