Law: Income Tax Act, 1961

Section: 11,12,139

Income-tax----Penalty---Charitable trust---Delay in tiling return---Tax payable nil on account of exemptions under Ss. 11 & 12---No reasonable cause shown for delay---Levy of penalty valid---Indian Income Tax Act, 1961, Ss. 11, ,12, 139(4A) & 271(1)(a). Where without giving effect to the provisions of sections I 1 and 12, a charitable trust has income chargeable to tax exceeding the limit up to which tax is not leviable, then under subsection (4A) of section 139 of the Income Tax Act, 1961, it is obligatory on the part of the trustee to file the return in respect of the assessment year without notice. The requirement of furnishing a return under section 139(4A) arises in the circumstances where a charitable trust has taxable income in the previous year unless resort is taken to sections I1 and 12 for the purposes of excluding income which has been accumulated to the extent permissible or has been applied to the charitable objects for which the trust exists. Section 139(4A) makes it further clear that in such cases the return is considered to be one required under sub¬section (1). Reading the two provisions together makes it further clear that the-fact that ultimately the entire income is exempt from payment of tax by invoking the provisions of sections 11 and 12 has no bearing on the question of levy of penalty when the obligation to tile the return within time has not been discharged and the explanation for the late filing of the return was not found to be acceptable by the fact finding authority. Held accordingly, on the facts, that the Tribunal was justified in confirming the penalty even when no tax was payable at all by the assessee, a charitable trust, on account of exemptions under appropriate provisions of law, namely, sections 11 and 12 of the Act, when it did not find any reasonable cause for the delay in filing of the return. JUDGMENT RAJESH BALIA, J.---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 1.39(4A) read with section 139(1) of the Income Tax Act, 1961.…

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