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Facts
The appellant, a primary agricultural co-operative society, failed to file its income tax return under Section 139(1) for AY 2012-13. The AO initiated reassessment proceedings under Section 148, completing the assessment under Section 143(3) read with Section 147. A penalty of Rs. 1,50,000/- was subsequently levied under Section 271B for the delayed submission of the audit report mandated by Section 44AB, attributed to delays in obtaining the audit under the Co-operative Societies Act.
Held
The Tribunal, relying on the Kerala High Court's ruling in Chavakkad Service Co-op. Bank Ltd., found that the delay in submitting the audit report under Section 44AB was due to reasons beyond the assessee's control, specifically the delay in obtaining audit reports from statutory auditors under the Kerala Co-operative Societies Act. This constituted a reasonable cause, and therefore, the penalty imposed under Section 271B was deleted.
Key Issues
Whether delay in filing the audit report under Section 44AB, caused by delays in obtaining the report under the Kerala Co-operative Societies Act, constitutes reasonable cause for deleting penalty under Section 271B.
Sections Cited
139(1), 147, 148, 143(3), 44AB, 271B
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 03.12.2024 for Assessment Year (AY) 2012-13.
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.
Order pronounced in the open court on 23rd June, 2025.