B.P.AGRAHARAM PRIMARY AGRICULTURAL CO-OP.CREDIT SOCIETY LTD,ERODE vs. CIT(A)NFAC, DELHI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi dated 19.07.2021 relevant to the assessment year 2016-17.

Brief facts of the case are that the assessee is a Primary Agricultural Co-operative Credit Society and filed its return of income on 10.03.2018 declaring total income NIL. The case was selected for scrutiny and the assessment under section 143(3) of the Income Tax Act, 1961 [“Act” in short] was completed on 31.12.2019. During the course of assessment proceedings, the Assessing Officer has noticed that the assessee has belatedly filed its audit report under section 3CA. Accordingly, the Assessing Officer levied penalty under section 271B of the Act of ₹.1,27,929/-. On appeal, the ld. CIT(A) confirmed the penalty levied under section 271B of the Act.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the delay in filing the audit report was neither wilful nor wanton and beyond the control of the assessee and prayed for deleting the penalty levied under section 271B of the Act.

On the other hand, the ld. DR supported the orders of authorities below.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the Assessing Officer levied penalty under section 271B of the Act for the reason that the assessee has filed the 44AB audit report on 05.03.2018 with a delay of more than 15 months of completion of statutory audit by the Assistant Director of Co-op. Audit dated 25.11.2016. Before us, the ld. Counsel for the assessee has submitted that existing Chartered Accountant, who was auditing the accounts of the assessee left for his new assignment and searching for new Chartered Accountant took some time as the Primary Agricultural Coop. Credit Society Ltd. is located in rural area. It was also submitted that the tax audit report under section 44AB of the Act has been filed belatedly, though it was filed before filing of return of income under section 139 of the Act for the assessment year under consideration and prayed for deleting the penalty levied under section 271B of the Act. On perusal of the penalty order under section 271B of the Act, we find that the 44AB Audit Report was completed on 05.03.2018 and the same was e-filed on 09.03.2018. Further, it was found that the assessee has filed its return of income under section 139 of the Act on 10.03.2018. Since, it is not the case of the assessee that the tax audit report was filed after filing of return of income under section 139 of the Act and moreover, considering the explanations that the assessee was prevented by reasonable cause for the delay in filing the tax audit report under section 44AB of the Act, we are of the considered opinion that the penalty levied under section 271B of the Act is liable to be deleted. Accordingly, the penalty levied of ₹.1,27,929/- under section 271B of the Act is deleted and allowed the appeal filed by the assessee.

In the result, the appeal filed by the assessee is allowed. Order pronounced on 29th June, 2022 at Chennai.