KUTTAMASSERY SERVICE CO-OPERATIVE BANK LIMITED NO 766,ERNAKULAM vs. ITO, WARD 2, ALUVA, ALUVA

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 furnishing the tax audit report had occurred on account of the delay in getting the accounts audited and 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.

On the other hand, the learned Sr. DR vehemently supported the orders of the authorities below.

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 Kuttamassery Service Co-op. Bank Ltd. 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 direct the AO to delete the penalty levied u/s. 271B of the Act.

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