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Facts
The assessee, a co-operative bank, failed to furnish audited financial statements within the due date under Section 44AB, leading to a penalty of Rs. 95,430/- under Section 271B. The CIT(A) upheld the penalty, which the assessee challenged before the Tribunal, citing delay in obtaining audit certificates under the Kerala Cooperative Societies Act as a reasonable cause.
Held
The Tribunal, relying on the Kerala High Court's decision in Chavakkad Service Co-op. Bank Ltd., held that such a delay constituted a reasonable cause. Consequently, the penalty imposed under Section 271B was deleted as no penalty should be imposed when reasonable cause is shown.
Key Issues
Whether the delay in filing the tax audit report under Section 44AB, caused by delays in obtaining audit certificates under the Kerala Cooperative Societies Act, qualifies as a "reasonable cause" under Section 273B to warrant waiver of penalty under Section 271B.
Sections Cited
271B, 44AB, 273B
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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 24.04.2024 for Assessment Year (AY) 2017-18.
The only issue raised by the assessee is that the learned CIT(A) 2. erred in confirming the penalty levied by the Income Tax Officer, Ward- 2, Thiruvalla (hereafter “the AO”) u/s 271B of the Income Tax Act, 1961 (the Act) amounting to Rs.95,430/-.
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
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 and consequently furnishing the tax audit report 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 273B 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 available before Assessing Authority at time of finalization of Elanthoor Service Co-op. Bank Ltd. 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 21st January, 2025. 11.