PWD IRRIGATION AND LSGD EMPLYEES COOPERATIVE SOCIETY LTD NO. T 638,TRIVANDRUM vs. INCOME TAX OFFICER, WARD 2(1), TRIVANDRUM

Since identical issues are involved in these appeals, those are heard together and disposed of vide this common order. For the sake of & 847/Coch/2024 PWD Irrigation LSGD Employees Co-op. Society Ltd. convenience and clarity, the facts relevant to the appeal bearing for AY 2016-17 are stated herein. The discussions and findings are equally applicable to the other appeal also.

In the present case, the audited financial statements were not furnished by the assessee within the due date as specified u/s 44AB of the Act. Therefore, the AO levied penalty u/s 271B of the Act amounting to Rs. 1,50,000/- .

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

Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us.

The learned A.R. before us submitted that the delay in getting the accounts audited under the Kerala co-operative Societies Act and consequently the tax audit report was furnished belatedly was on account of the delay in getting the accounts audited and obtaining the audit certificate under the Kerala Cooperative Societies Act. Thus, it was pleaded by the learned counsel for the assessee that there was sufficient cause for the delay in getting the account audited and consequently furnishing the audit report belatedly. As such the learned A.R. prayed for wavier of the penalty under the provisions of section 271B of the Act.

We have heard the rival contentions of both the parties and perused 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: - “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, appeals filed by the assessee are allowed. Order pronounced in the open court on 18th March, 2025.