ORDER
Per Kathuria, Accountant Member - This appeal by the assessed for the assessment year 1981-82 is directed against the order dated 23-10-1986 passed by the Appellate Assistant Commissioner of Income-tax, New Delhi, upholding the penalty imposed under section 271(1) (a) of the Income-tax Act, 1961.
2. The return of income in this case for the assessment year 1981-82 was required to be filed on or before 30-6-1981. It was actually filed on 10-2-1983 and was late by 19 completed months. The Income-tax Officer initiated proceedings for late submission of return. The assessed did not file any reply to the penalty notice issued. A fresh show-cause notice was served on the assessed on 24-1-1986 fixing up the penalty matter for hearing on 12-2-1986. Still the assessed did not file any reply. The Income-tax Officer, thereforee, imposed a penalty of Rs. 8,290 on total income without giving effect to the provisions of sections 11 and 12 of the Income-tax Act. The assessed went in appeal before the Appellate Assistant Commissioner of Income-tax, who vide his impugned order rejected the submission made and confirmed the penalty.
3. Shri C. S. Aggarwal, the learned counsel for the assessed, submitted that the assesseds income was exempt under section 10(22A) of the Income-tax Act. We find from the record that no such plea was taken at the time of assessment proceedings. The assesseds case was required to be processed in terms of sections 11 and 12 of the Income-tax Act and was processed accordingly by the Income-tax Officer. In case the assessed wanted exemption under section 10(22A), the assessed should have made a claim accordingly and the matter could have been processed in the light of the submissions made. Now that the matter has been processed from he point of view that the assessed was a charitable institution and no claim under section 10(22A) was preferred before the Departmental authorities in respect of assessed proceedings, it is too late in the day to make that claim in respect of the penalty proceedings. We, thereforee, reject this submission of the assessed.
4. The next point made by the learned counsel for the assessed was that no penalty can be levied for late submission of return on the assessed in view of sub-section (3) of section 271 of the Income-tax Act. Sub-section (3) of section 271, reads as under :
'(3) Not withstanding anything contained in this section.
(a) no penalty for failure to furnish the return of his total income under sub-section (1) of section 139 shall be imposed under sub-section (1) on an assessed whose total income does not exceed the maximum amount not chargeable to tax in his case by one thousand five hundred rupees;'
It was submitted by Shri Aggarwal that the total income of the assessed for assessment year 1981-82 had been computed at a loss of Rs. 8,681. The submission was that as the assesseds total income did not exceed the maximum amount no chargeable to tax in its case by Rs. 1,500, no penalty for failure to furnish the return of total income under section 139(1) could be imposed.
We have heard the Department Representative and carefully gone through the provisions of section 271. We find that proviso to section 271(3) stipulates the nothing contained in clause (a) or clause (b) sub-section (3) of section 271 shall apply to a case referred to in sub-clause (a) of clause (i) of sub-section (1) of section 271. In other words, where a person is required to file the return under sub-section (4A) of section 139, the provisions of sub-section (3) of section 271 would not apply. The assessed derives income from property held under trust and it had to file a return of income without giving effect to the provisions of sections 11 and 12 of the Income-tax Act, in the prescribed form and in the prescribed manner. We had requested the learned counsel for the assessed to file receipt and expenditure statement for the assessment year 1981-82. This has, however, not been filed. It is, however, an admitted position that the total receipts of the assessed without giving effect to the provisions of sections 11 and 12 of the Income-tax Act was considerable and the assessed was required to file a return of Income in terms of provisions contained in section 139(4A) of the Income-tax Act. The provisions to sub-section (3) (a) of section 271 clearly states that the benefit of sub-section (3) of section 271 is not available to a trust. As the assessed is a trust, the exemption claimed under the aforesaid section from penalty is not available to it. This ground, thereforee, fails.
5. The next submission made by Shri Aggarwal was that under clause (d) of sub-section (3) of section 271 the penalty imposed for late submission of the return and for concealment of income shall not exceed in the aggregate twice the amount of the tax sought to be evaded. It was submitted that this clause will create as anomalous situation in the case of an assessed like the present one where penalty for late submission of the return was imposed. Elaborating the argument it was submitted that where both the penalties, namely, for late submission of return and for concealment of income, were imposed the maximum penalty would not exceed twice the amount of tax sought to be evaded. In the case of a trust like the assessed where the tax sought to be evaded was NIL, the penalty in such a case would be NIL, but if only one penalty, namely, penalty for late submission of return was to be levied, then it would result in hardship to the assessed like the present one.
6. We have carefully considered the submissions made on both the sides. Clause (d) of sub-section (3) of section 271 was enacted by the Taxation Laws (Amendment) Act, 1975 with effect from 1-4-1976. Explanationn 3 to section 271 was also inserted under the same Taxation Laws (Amendment) Act with effect from 1-4-1976. This Explanationn provided that if a person who has not hitherto seen assessed to tax does not file a return of income for an assessment year voluntarily within the normal period of limitation and no notice under section 139(2) or 148 is issued to him till the expiry of the said period, he will be treated to have concealed his income and penalty will be livable on him accordingly if he is later found to have had taxable income in that year, Clause (d) of sub-section (3) of section 271 has to be read with Explanationn 3, the gist of which is reproduced herein below :
The Legislature in its wisdom and with a view to mitigating hardship in respect of those assessed who were not hitherto assessed and who were covered by Explanationn 3 of section 271 stipulated that a ceiling of 200 per cent of the tax sought to be evaded was to be levied where penalties under 271(1) (a) and 271(1) (c) were imposed. That ceiling was meant to mitigate to some extent the rigour of Explanationn 3'. (See Explanatory notes vide circular No. 204 dated 24-7-1976).
In the case of the present assessed, we were informed that the assessed had been filing returns in the past and for the year under consideration only one penalty for submission of return had been initiated and imposed. In our view clause (d) of sub-section (3) of section 271 was not applicable at all and the assesseds submission in this regard was not sustainable.
7. The next point made by the learned counsel for the assessed was that since the income of the assessed was below the taxable limit the assessed was advised by the counsel not to file the return and that when the new auditors were appointed, they advised the assessed to file the return and so the return was filed. Reliance was also placed on the decision of the Supreme Court in the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi : [1979]118ITR507(SC) . It was submitted that the mistake of counsel may in certain circumstances be taken into account in condoning the delay. We have examined the facts of the case and also looked into the authority cited by the learned counsel for the assessed. The Supreme Court has held that the law is settled that mistake of counsel may in certain circumstances be taken into account in condoning the delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. We find that in the instant case the assessed had not filed any reply before the Income-tax Officer. For the first time a plea was taken before the first appellate authority that since the income of the trust was not taxable there was no need to file any return. The first appellate authority noted that the assessed had applied for extension of time and that the version of the assessed was apparently not correct. No evidence has been produced before us either to show that the counsel of the assessed at that point of time and advised the assessed not to file the return of income because the income was below the taxable limit. This bald submission stands unsubstantiated and unproved. The learned counsel for the assessed could not even tell us as to when the new auditors were appointed and when was the advice by the old counsel tendered. In the absence of any evidence, we must reject this contention of the assessed also.
8. The next submission made by the learned counsel for the assessed was that this was the case of a charitable trust and equity demanded that charitable trust should not be penalised for late submission of the returns.
9. We have given out careful consideration to the submission to the learned counsel. It will be well to recall the words of Rowlatt, J. in Cape Brandy Syndicate v. IRC [1921] 1 KB 64 , that :
'... in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption a to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.'
The above passage has been approved by the Supreme Court in the case of Smt. Tarulata Shyam v. CIT : [1977]108ITR345(SC) . The above passage is a complete answer to the contention of the learned counsel for the assessed. The legislature has provided for levy of penalty in respect of the trust also and the penalty has to be levied on the total income computed under the Income-tax Act without giving effect to the provisions of sections 11 and 12 thereof. Once a specific provision has been laid down enabling the Departmental authorities to levy penalty for late submission of return even is respect of trust, there is no room for equity in this regard. This point of the assessed is also devoid of merit, and is hereby rejected.
10. We may mention that the learned Departmental Representative relied on the orders in the cases of Hanutram Ramprasad v. CIT and of Kunj Behari Lal Lalta Prasad v. ITO : [1983]144ITR583(All) for the propositions that penalty under section 271 (1) (a) is not imposed for any concealment of furnishing inaccurate particulars and, thereforee, no question of establish that the cause was or furnishing inaccurate particulars and, thereforee, no question of establishing means read by the Revenue arises; the real cause for the delay is especially in the knowledge of the assessed and the Revenue cannot be asked to establish that the cause was or was not reasonable; and the assessed has to explain the cause for the delay and it is for the Income-tax authorities to determine whether the cause was reasonable or not. With respect, we bow to the principles enunciated in the cases cited above. It was for the assessed to prove a reasonable cause for not filing the return of income in time. This onus has not even discharged by the assessed. We, thereforee, hold that the Income-tax Officer was justified in levying the penalty and the first appellant authority was justified in confirming the same. We uphold the decision of the learned. Appellate Assistant Commissioner.
11. In the result, the appeal is dismissed.