HANUMAN SAHAKARI DUDH UTPADAK SANSTHA LIMITED,,SOLAPUR vs. INCOME-TAX OFFICER, WARD - 1,, SOLAPUR

Briefly stated, the facts of the case are that the assessee is a co-operative society, engaged in the business of purchasing milk from its members and its sale. During the year, the assessee was also in running the fodder camp aided by the Maharashtra State Government for the cattle of drought hit farmers. A return was Hanuman Sahakari Dudh Utpadak Sanstha Ltd., filed declaring Nil income. During the course of assessment proceedings, the AO observed that the assessee society had received grants amounting to Rs.1.35 crore. Since the accounts were not audited in terms of section 44AB, the AO, after issuing notice, imposed penalty u/s.271B of the Act. Such a penalty came to be affirmed in the first appeal. Aggrieved thereby, the assessee has approached the Tribunal.

We have heard the ld. D.R. and gone through the relevant material on record. There is no appearance from the side of assessee despite notice. It is seen from the impugned order that the assessee is a small cooperative society dealing with poor farmers and milk sellers. The assessee narrated a detailed cause before the ld. CIT(A), as has been reproduced on pages 3 and 4 of the impugned order, which led to its failure to get the accounts audited. We are satisfied with the reasonableness of the cause.

Since section 271B is subject to section 273B, and the latter section emphasizes that if a reasonable cause is established for non-compliance of the requirements that lead to imposition of penalty under certain sections, including 271B, then no penalty should be imposed. As the case under consideration is covered by Hanuman Sahakari Dudh Utpadak Sanstha Ltd., section 273B, we hold that the penalty ought not to have been imposed and confirmed. We, therefore, order to delete the same.

In the result, the appeal is allowed.