AMBALAPAD SERVICE CO OPERATIVE BANK LTD NO 759,KUNDUKAD, THRISSUR vs. INCOME TAX OFFICER, THRISSUR

Brief facts of the case are that the appellant is a co-operative society registered under the Kerala State Co-operative Societies Act, 1969. It is classified as primary agricultural co-operative society. The appellant had not filed regular return of income under the provisions of section 139(1) of the Income Tax Act, 1961 (the Act). The Income Ambalapad Service Co-op. Bank Ltd. Tax Officer, Ward-2(1), Thrissur (hereinafter called "the AO") formed an opinion that income escaped assessment to tax. Accordingly, a notice u/s. 148 of the Act was issued to the appellant. In response to the notice u/s. 148 the appellant filed return of income. The prescribed audit report u/s. 44AB of the Act was filed manually in August, 2019. Against the said return of income, the assessment was completed by the AO vide order dated 03.12.2019 passed u/s. 143(3) r.w.s. 147 of the Act at a total income of Rs. 62,73,440/-. It s stated that the delay in submitting the audit report was on account of delay in conducting the audit under the Co-operative Societies Act. The audit report under the Co-operative societies Act was received only on 04.11.2013. However, the AO was of the opinion that the appellant had failed to submit the audit report before the due date. Therefore, he proceeded to with levy of penalty of Rs. 1,50,000/- u/s. 271B of the Act vide order dated 12.01.2021.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

We have heard the rival contentions of both the parties and perused 5. the materials available on record. At the outset, we note that the Hon'ble Jurisdictional High Court in the case of Chavakkad Service Co-op. Bank Ltd. [2024] 169 taxmann.com 45 (Kerala) has observed as under: - Ambalapad Service Co-op. Bank Ltd. “Where assessee co-operative societies did not file audit report as mandated under section 44AB within time limit specified thereunder, however, audit reports were made available before Assessing Authority at time of finalization of assessments, since delay in obtaining audit reports from statutory auditors under Kerala Co-operative Societies Act and Rules could be seen as a reasonable cause for delayed submission of audit reports, no penalty under section 271B was to be imposed on assessee.”

The facts of the case on hand are identical as discussed above. Thus, respectfully following the same, we delete the penalty imposed by the Revenue.

In the result, appeal filed by the assessee is allowed.