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TMI Blog2023 (5) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the AO of Rs. 1,50,000/- imposed u/s 271B of the I.T. Act by way of an order dated 24.01.2022. 2. The facts in brief are that the assessee university filed return of income for the assessment year 2018-19 declaring a total income at Rs. Nil. The assessee has claimed exemption u/s 10(23C)(iiiab) of the Act for Rs. 28,69,49,640/- in its return of income for the year under consideration. The case was assigned for faceless assessment. Notice u/s 143(2) of the Act was issued and the case was taken up for scrutiny. During the assessment proceedings Ld. AO was not satisfied with the claim of exemption for the purpose of Section 10(23C)(iiiab) r.w.r. 2BBB for the following reason :- "4.1 However, on perusal of the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Account. The provisions of Section 44AB are applicable to people who are carrying on Business and Profession. As the Assessee is not carrying on business or profession the said section is not applicable to the Assessee & therefore a Tax Audit report is not required. In view of the facts stated above you are requested to drop the penalty proceeding U/s 271B under information to us." 4. However, Ld. AO was not satisfied and relying on the provisions of Section 12A(b) of the Act passed the penalty order. Ld. CIT(A) has also sustained the same with following relevant findings in para 7 and 8: "7. During the course of appellate proceedings, in the appellant stated that stated that the appellant's university is a non- profit organizatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and the National Law University Act, 2007 (hereinafter referred as 'University Act' ) were also produced. Ld. DR however, defended the order of ld. Tax Authorities below. 8. It can be appreciated that the assessee university has been established by the Act of Legislative Assembly of the National Territory of Delhi, and Subsection (3) of Section 3 of the University Act, provides for the establishment of University and that " The University shall be engaged in teaching and research in law and in allied disciplines.". The preamble of the University Act, makes it very apparent that the purpose of establishment of Law university is the establishment of national level institution of excellence in the field of legal education and research in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to observe that Ld. Tax Authorities have passed the orders bereft of application of judicious mind. It can be observed that the University has claimed exemption of income earned by it from Tax u/s 10(23C)(iiiab) of the Act. However, Ld. AO has erroneously introduced provisions of Section 12A(1)(b) of the Act to the income of the assessee university and then considered it in the light of the Proviso to section 44AB, to conclude that as assessee has not got its account audited in terms of Section 12A(1)(b) of the Act, therefore, penalty is liable to imposed u/s 271B of the Act. 9.1 The first thing that comes up is that the Proviso of Section 44AB is not a default or charging provision rather is a beneficial provision for the any assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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