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TMI Blog2021 (12) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... sel/Chartered Accountant to look into the matter the delay in filing of appeal was caused. It has prayed that the delay be condoned. Upon careful consideration and hearing the Ld. DR, we condone the delay in filing the appeal 4. The issue is in this appeal pertain to levy of penalty u/s. 272A(2)(e) for the following amounts for AY 2006-07,2007-08,2008-09,2009-10,2010-11 & 2011-12. Sr.No. Assessment Year Penalty (Amount Rs.) 1 2006-07 1,06,000/- 2 2007-08 99,000/- 3 2008-09 1,67.400/- 4 2009-10 1,30.900/- 5 2010-11 94,400/- 6 2011-12 57,900/- ITA No.1470/Mum/2020 for AY 2006-07 5. Since, the facts are common and orders of authorities are also identical, we are referring to the facts and figures from the AY 2006-07. The AO in the penalty order noted that the due date for filing return of income by the assessee for A.Y.2006-07 was 30.09.2006. The assessee did not voluntarily file its return of income within the time limit prescribed under the Income Tax Act. After duly recording reasons for income escaping assessment, notice u/s 148 of the I.T.Act was issued to the assessee on 28.03.2013. That the assessee submitted that it had file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government and has oilier sources of income, deficit, if any, can be met through grants. Clause 3 of Section 102 of the said Act states that "The Salary fund shall consist of all amounts received from the State Government, Central Government or University Grants Commission towards full or part payment of the salary and allowances. No amount from this fund shall be utilised for the purpose other than payment of salary and allowances. " The above sufficiently endorses the fact that that the University is substantially financed by Government. Besides the University is existing solely for the educational purposes and is not for purposes of profit. Merely having surplus does not tantamount to profit as the surplus is not available for distribution as dividend and the surplus is utilized towards its object, namely - education. In the case of Sikkim Manipal University V/s. Asst. Commissioner of Income Tax. Kolkata Bench, it was held that "a perusal of Sec. 10(23C)(iiiab) shows that the educational institution should exist 'solely 'for educational purposes and not for purposes of profit, that is to mean that the institution should provide education and not indulge in any prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als and society by associating the university closely with local and regional problems of development; (6) to carry out soda! responsibility as an informed and objective critic, to identify and cultivate talent, to train the right kind of leadership in all walks of life and to held younger generation to develop right attitudes, interests and values; (7) to promote equitable distribution of facilities of higher education; (8) to provide for efficient and responsive administration, scientific management and develop organisation of teaching, research and extension; (9) to promote acquisition of knowledge in a rapidly developing and changing society and to continually offer opportunities of upgrading knowledge, training and skills in the context of innovations, research and discovery in all fields of human endeavor by developing higher educational network with use of modern communication media and technologies appropriate for a learning society; (10) to promote national integration and preserve cultural heritage; (11) to develop work culture and promote dignity of labour through applied components in the syllabi; (12) to build up financial self-sufficiency by under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its favour. 10. In the past, the penalty proceedings initiated against the University have been dropped inter alia for the above reasons. A copy of the said order for A Y 2003-04 is enclosed and marked Annexure 2. for your ready reference. Besides, assessee being a University, lenient view needs to be taken. The assessee relics on the judgement passed in Slate Bank of India vs Additional Commissioner of Income Tax (TDS). 11. Further the assessee humbly submits that it had not acted deliberately in defiance of law and was not guilty of conduct contumacious or dishonest or acted in conscious disregard to its obligations. The assessee relies on the judgement passed in State Bank of India vs Additional Commissioner of Income Tax (TDS) 12. The Assessee relies of (he judgements passed in the following case-laws: a) Shri Bhandup Jain Temple vs DDIT reported in (1996) 56 TTJ (Bom) 104. b) Branch Manager, SBIvs ACIT (TDS) reported in 2014 62 SOT 119 (Cultack) URO. c) Akali Baba Phool Singh Educational Trust vs DDIT (Exemption) reported in (2011) 43 SOT 700 (Del). d) Shyam Gopal Charitable Trust vs DIT (Exemption reported in (2006) 206 CTR (Del) 493. e) ADIT vsM. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 days. Hence, it is held that the assessee is liable for penalty u/s 272A(2)(e) of the IT Act. Penalty of Rs. 106,000-is-hereby levied @ Rs. 100 per day. 8. Against the above order, assessee is in appeal before the Ld.CIT(A). 9. Ld.CIT(A) also reproduced the submission of the assessee. Ld.CIT(A) inter-alia noted the following submission of the assessee. "The relevant provisions of section 139(4C) of the Act which reads as under: Every - (E) "fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub- clause (iiiab) or sub-clause (iiiad) or sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (lilac) or sub-clause (iiiae) or sub-clause (via) of clause (23C) of section 10." The requirement of university covered by S. 10(23C)(iiiab) to file the return of income was introduced by Finance Act, 2015 w. e. f. 01.04.2016. Please find enclosed herewith Page-22 of Explanatory Memorandum to Finance Bill 2015 as Annexure-1 the relevant para is reproduced below: Furnishing of return of income by certain universities and hospitals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal or deliberate, hence penalty u/s 272(A)(2)(e) can not be levied. In the case of University also the delay occurred under circumstances mentioned above and it was not deliberate or intentional. Hence ratio of decision in this case applies to the facts of the case of the University. v. Vatavaran Trust vs. Joint Director of Income Tax (Exemption) (2006) 25 CCH 0093(Dei Trib) Annex-5. There was excess of expenditure over income in all assessment years, assessee 's belief that it was not obliged to file return of income u/$ 139(4A) was bona fide and this constituted reasonable cause , hence penalty u/s 272(A)(2) (e) is not leviable. In the case of University also, its bona fide belief that since its income is exempt u/s 10(23C)(iiiab), it is not required to file the return of income, constitutes reasonable cause and no penalty u/s 272(A)(2)(e) should be levied. In the aforesaid circumstances when there is no loss of revenue, we submit that no penalty should be levied for delay in filing return of income. Further it is submitted that no penalty shall be imposed merely because it is lawful to do so. No penalty need be levied when there is a technical or venial breac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona fide and this constituted reasonable cause, hence penalty u/s. 272(A)(2) (e) is not leviable. In Akali Bba Phool Singh Education Trust (supra) Delhi Tribunal held that where assessee institution was under bona fide belief that its income is exmept u/s. 10(23C)(iiiab) and it was not required to file return of income, penalty imposed u/s. 273B is not justified. In the case of Shyam Gopal Charitable Trust vs CIT(E) 290 ITR 99 Hon'ble Delhi Court has held that where assessee did not file return of income on the initial advice of its chartered accountant that it was not required to file any return for the relevant assessment years. Therefore, there was reasonable cause within the meaning of section 273B for failure to file returns within stipulated time and penalty u/s. 272A(2)(e) was not leviable. 13. We find that assessee's plea in the present case duly falls under the ken of aforesaid case laws wherein similar penalty has been deleted. No contrary decision has been produced before us. As held by Hon'ble Supreme Court in Motilal Padampat Sugar Mills' [1979] 118 ITR 326 that there is no presumption that everyone known law. Moreover, here assessee has also referred to provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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