ITAT deletes Penalty as Quantum Addition does not Attain Finality [Read Order]

The Chennai Bench of Income Tax appellate Tribunal (ITAT) has deleted the penalty as quantum addition does not attain finality.

CVMV Reddy’s Educational & Public Charitable Trust, the assesse filed an online application in Form 10A for registration under section 12AA of Income Tax Act 1961. While processing the application, the CIT (E) has noted that certain explanations/clarifications were required to process the application.

Accordingly, the assessee trust was requested to furnish its clarifications through e-mail. In that email, the assessee was given three opportunities .The assessee was requested to furnish its explanation and it was informed that if there is no compliance, it would be construed that the assessee has taken adjournment and accordingly the case automatically stands adjourned to the next date

It was also informed that if there is no compliance for the second opportunity, the case would again automatically get adjourned to the third date. Since the assessee has not taken any of the above three opportunities granted and as the case is getting time barred by limitation and there was no response from the applicant, the CIT(E) rejected the application for grant of registration under section 12AA of the Act.

Counsel for the Appellant has submitted that it has not examined the Form No. 10A with requisite enclosures as per the prescription in the statute for getting tax exemption registration and the circumstances beyond its control, Because of pre-Covid-19 pandemic period; the assessee trust could not put its appearance before the CIT (E).

The Coram comprising the Judicial Member V. Durga Rao and the Accountant Member Manoj Kumar Aggarwal observed that the quantum addition has not attained its finality, the penalty levied under section 270A of the Act stands deleted. However, the Assessing Officer has the liberty to pass the order under section 270A of the Act, if any, after concluding the assessment order afresh consequent upon the order passed by the CIT (E) under section 12AA of the Act and the appeal filed by the assessee is allowed.

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