TMI Blog2012 (8) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of case, ld. CIT(A) has grossly erred in rejecting ground of appeal of assessee wherein assessee has claimed that penalty u/s 271B of the Act is not attracted since it is case of charitable trust which got its account audited as provided under section 12A(b) of the Act. ITA 2 No.185(Asr)/2012 3. That penalty confirmed by ld. CIT(A) is illegal and bad in law since assessee was under bonafide belief that being charitable trust, provisions of Sec. 44AB of the Act are not attracted in case of charitable trusts. 4. That the assessee requests for leave to add or annex any other grounds of appeal before the appeal is heard or disposed of. 3. The brief facts of the case are that the AO levied penalty amounting to ₹ 26,572 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had got its accounts audited as provided under section 12A(b) of the Act and report in Form No. 10B duly signed and audited by the auditors had been filed alongwith return of income. The objection of the AO was that the assessee was required to get its accounts audited u/s 44AB of the Act since the assessee was carrying out business of hospital. The only dispute before us is that whether the assessee was doing a business when the assessee had been claiming exemption u/s 11A of the Act, being a charitable institution, which has been allowed and is not under dispute, in such situation, whether penalty u/s 271B of the Act can be levied. 6.1. In this regard, we are convinced with the submissions of the Ld. AR that u/s 44AB of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 10(23D). However, section 44AB becomes operative when there is computation of profits and gains of business or profession as a part of total income. The assessee being a mutual fund, the income was exempt under section 10(23D). Hence, the assessee was not liable to obtain any audit report within the meaning of section 44AB of the Act. Therefore, cancellation of penalty under section 271B was justified. We, therefore, are convinced with the arguments of the ld. counsel for the assessee before the Ld. CIT(A) and before us that the income of the assessee trust is wholly exempt under section 11 of the Act, which is part of Chapter III of the Act and therefore, provisions of Chapter IV cannot be made applicable and, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
