TMI Blog2012 (4) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... urns was not intentional – Held that:- On being appraised the correct provisions of law, return of income was filed immediately without any further delay there was no loss to the revenue as a result of late filing of the return and there was no ulterior motive to defraud the revenue - Penalty may be imposed under section 272A(2)(e) for failure, an attempt of deliberateness or deceptiveness, to furnish the return of income - Penalty cannot be levied under section 272A(2)(e) if there exists sufficient or reasonable cause for the default - "Reasonable cause' as applied to human action is that which would constrain a person of average intelligence and ordinary prudence - appeal filed by the assessee is allowed – in favour of assessee. - IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the said letter that the appellant was under a bonafide belief that recognition under section 80G would be a pre-requisite for filing the return of income. It was stated that the trustees of the trust occupy various positions in the settlor company. They devote their time and efforts in the course of employment with the company as a result of which they are not in a position to fully devote their time in the administration of the trust. Immediately on being appraised of the obligations, the income tax returns were filed without any further delay. Further, this was the first year of operation of the trust. The delay in filing the returns was not intentional. In view of the above explanation, the appellant requested the JDIT(E), Range ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n being appraised the correct provisions of law, return of income was filed immediately without any further delay. It was further submitted that the Hon'ble Allahabad High Court in the case of Budhan Singh Sons v. CIT [1983] 142 ITR 180/13 Taxman 317 had categorically stated that in the first year of operation of business, the assessee may not be familiar with certain procedures and there is reasonable cause for not filing the return on time. It was stated by the learned counsel that the entire income of the appellant trust was applied towards its charitable activities and no income tax was payable for the assessment year under consideration. Therefore, there was no loss to the revenue as a result of late filing of the return and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Delhi High Court in the case of Azadi Bachao Andolan v. Union of India [2001] 252 ITR 471/116 Taxman 249 reads as follows:- "Reasonable cause can be reasonably said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or want of bona fides". 8.2 The Hon'ble Delhi High Court in the case of Woodward Governors India (P) Ltd. v. CIT [2001] 118 Taxman 433 held as under:- "Reasonable cause' as applied to human action is that which would constrain a person of average intelligence and ordinary prudence. It can be described as a probable cause. It means an honest belief founded upon reasonable grounds, of the existence of a state of ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negligently. The delay in filing the return was due to a reasonable and genuine cause. It is also not a case that the appellant did not file a return of income at all. During the year preceding the assessment year under consideration, the appellant trust was formed. The relevant previous year was the first year of activities of the appellant trust. The appellant was not familiar with the relevant provisions of filing of return of income and the procedure involved thereof. It was under a bonafide belief that the return is to be filed only after securing recognition under section 80G. However, on being appraised of the provisions of law, return of income was filed without any further delay. Since the entire income was applied towards the char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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