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2016 (9) TMI 101 - ITAT DELHI

2016 (9) TMI 101 - ITAT DELHI - TMI - Levying the penalty u/s 271(12)(c) - exemption u/s 10(22) - Held that:- It is observed that the assessee was registered under Societies Registration Act in the year 1968. The assessee was also granted exemption u/s 10(22) of the Act vide order dated 27.01.1994 issued by the Director of Exemption, the exemption u/s 10(22) was available to the assessee till Assessment Year 1998-99 as Section 10(22) stood deleted w.e.f. Assessment Year 1999-2000. From the recor .....

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he facts of the case, it does not appear that the assessee has deliberately abstained itself from presenting such application in time. In the application dated 31.10.2006 assessee has also claimed for condonation of delay and has requested for registration to be granted w.e.f. 01.04.1999. Considering the above facts, we are of the opinion that the imposition of penalty u/s 271(1)(c) is not justified as there was complete disclosure of facts and the claim made by the assessee was not found accept .....

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following grounds of appeal: 1. The order is bad in law, as it has been passed in gross violation of principles of natural justice. 2. The d. A.O. has erred in levying the penalty u/s 271(12)(c) under the given facts and circumstances. 2. The brief facts of the case are as under: 2.1 The assessee has been granted registration u/s 12AA w.e.f. Assessment Year 2007-08 vide order dated 06.07.2009 passed by DIT (Exemption). The assessee was not having registration u/s 12AA from the Assessment Year 19 .....

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. disallowed the exemption u/s 11 as the same was not available to the assessee for the year under consideration. He completed the assessment at ₹ 10,80,323/-. The Assessing Officer also levied 100% penalty for the addition made during the assessment proceedings. Aggrieved by the levy of penalty, the assessee preferred an appeal before Ld. CIT(A). Ld. CIT(A) held as under: 2.2. I have considered the penalty order of the AO and the submissions of the assessee and I do not find any merit in .....

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s justified to make the additions and levy the penalty. After considering all the facts and circumstances of the case, I am of the view that the assessee filed inaccurate particulars of income as the assessee had filed the nil return as against the taxable income of ₹ 10,80,323/- and accordingly the action of the AO is confirmed. 2.3 Aggrieved by the order passed by Ld. CIT(A), the assessee is in appeal before us now. 3. Ld. A.R. submitted that Ld. A.O. levied penalty u/s 271(1)(c) of the .....

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or exemption being a charitable organization and its activities are well covered under the definition of charity as defined under the Act. Ld. A.R. submitted that he assessee was under bona fide belief that it is entitled for exemption u/s 11/12AA of the Act as the application dated 31.10.2006 was filed seeking registration with retrospective effect from Assessment Year 1999-2000. Ld. A.R. submitted that as the application was pending as on the date of filing of return for the year under conside .....

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further submitted that there was no intention on behalf of the assessee to conceal any income or to file inaccurate particulars of income. He placed his reliance upon various decisions which are as under: i) CIT Vs Reliance Petroproducts P. Ltd. (2010) 322 ITR 158 (S.C.); ii) ACITVs Sahara India Investment Corpn. Ltd. (2010), 04 ITR (Trib) 284 (Del.); iii) CITVs Dharampal Premchand Ltd. (2010), 329 ITR 572 (Del.); iv) M. S. Bindra & Sons P. Ltd. (2011) 336 ITR 125 (Del.); v) Hero Honda Moto .....

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essee is based upon a bona fide belief and when allowability of a claim is disputed, n penalty can be levied. 4. On the contrary, Ld. D.R. submitted that the assessee has made the application seeking registration u/s 12A of the Act on the last day of filing of return for the Assessment Year 2006-07. He submitted that it is an afterthought as both the application as well as the return, are even dated. Ld. D.R. thus submitted that the assessee has filed inaccurate particulars of income and thus, i .....

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ssment Year 1999-2000. From the records placed before us, it is observed that the assessee was under a belief that the exemption is available with the assessee under the Act. It was subsequently during the year under consideration that the assessee realized that the exemption is not available. It was during the assessment proceedings for Assessment Year 2004-05 that assessee realized the exemption being not available vide assessment order for the Assessment Year 2004-05 where the Ld. A.O. reject .....

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esaid provision. Then the question is, when an income is said to be concealed so as to attract the penalty provisions. Explanation 1 sets out the circumstances which justifies levy of penalty. It reads as under: "Explanation. 1: Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissio .....

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