GODIJI PARSHWANATHJI JAIN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee, a public charitable trust, filed its return for the assessment year 1976 -77 on June 30, 1978, showing a loss of Rs. 1,31,740. The return was due to be filed on June 30, 1976, as per the provisions contained in Section 139(4A) read with Section 139(1) of the Income -tax Act, 1961. The assessment was completed by computing the net loss as Rs. 85,402. Since the return was due on June 30, 1976, and filed after two years, penalty proceedings under Section 271(1)(a) of the Act were initiated for late filing of the return. The Income -tax Officer did not find the cause furnished by the assessee reasonable and levied a penalty in the sum of Rs. 3,830 by its order dated December 9, 1980. While the Appellate Assistant Commissioner deleted the penalty by accepting the explanation furnished by the assessee for delayed filing of the return, the Tribunal, vide its order dated July 23, 1983, did not accept the explanation for the delay furnished by the assessee to be reasonable and held that the delay must be considered contumacious and restored the penalty levied by the Income -tax Officer. The contention had been raised that as the ultimate assessment was at nil income and the charitable trust was exempt from payment of tax, no penalty could be levied for delayed filing of the return under Section 271(1)(a), which also did not find favour with the Tribunal.

(2.) IN the aforesaid circumstances, the Tribunal, at the instance of the assessee, has submitted the statement of case and referred the following question of law arising out of its appellate order under Section 256(1) of the Act. ' Whether the Tribunal was justified in confirming the penalty when no tax was payable at all by the assessee being duly exempted under an appropriate provision of law ?'

(3.) IN these circumstances, we have no hesitation in coming to the conclusion that the Tribunal was justified in confirming the penalty even when no tax was payable at all by the assessee on account of exemptions under appropriate provisions of law, namely, Sections 11 and 12 of the Act, when it did not find the cause furnished by the assessee, for the delay in filing of the return, reasonable. It is not the case of the assessee that in the assessment of income, exemptions other than under Sections 11 and 12 have been taken into consideration.