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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi
This appeal by the Assessee is directed against the order dt. 09-12-2015 passed by CIT(A), 6, Kolkata for the A.Y 2010-11.
The only ground is to be decided is as to whether the CIT-A justified in confirming the penalty as imposed by the AO U/Sec 271B of the Act in the facts and circumstances of the case.
The Assessee is a Co-operative Society. The Tax Audit report as required by the provisions of section 44AB of the Act was filed by it along with its return of income for the year under consideration on 16-12-2010 as against the specified date of 30-09-2010. The Assessing Officer, therefore, initiated penalty proceedings under section 271B of the Act. In reply to the show-cause notice issued during the course of said proceedings, it was explained that the Assessee was ignorant about Income tax law and Rules therewith and not aware that penalty would be attracted for non-submission of TAR 1 [Tax Audit Report] and urged to drop the penalty proceedings initiated u/s. 271B of the Act. This explanation of the assessee was not found acceptable by the Assessing Officer. The A.O held that the assessee-society could have appointed the Tax Auditor and could have got the tax audit done independently much before the specified date 30-09-2010 and the delay in appointment of statutory auditors under the Cooperative Act had no relevance with Income tax law. He rejected the explanation of the assessee on its failure to obtain and furnish the tax audit report by the specified date. He, therefore, proceeded to impose the penalty of Rs.1,00,000/- u/s. 271B of the Act.
The penalty imposed by the Assessing officer under section 271B of the Act was challenged by the assessee in the appeal before the CIT(A). The Assessee contended that the statutory Auditors were appointed by the Cooperative Department of Govt. of West Bengal to conduct statutory audit and could complete their audit only on 30-08- 2010. It was submitted that the Assessee-society thereafter appointed Tax Auditor, who in turn submitted his audit report on 9- 11-2010, which was filed on 16-12-2010 along with the return of income for the year under consideration. It was contended that there was sufficient cause for the delay in filing the Tax Audit Report before the specified date on 30-09-2010 and failure to furnish the same within the due date is not intentional and was beyond its control. The CIT(A), however, did not find merit in the same and proceeded to confirm the penalty imposed by the Assessing Officer for the following reasons given in paragraph 3.4 of his impugned order:-
“3.4. In the present case the appellant has not been able to prove that there was a reasonable cause for failure. The explanation offered is not acceptable. In view of the above and taking into consideration the Court decision as cited above, it is held that the A.O, had correctly imposed the penalty.”
Aggrieved by the order of the CIT(A), the assessee has preferred this appeal before the Tribunal. The Ld.AR relied on the order dt: 28-02-2017 of ‘A’ Bench, Kolkata Tribunal in & 805/Kol/2014 in assessee’s own case for AYs 2008-09 & 2009-10 and submitted that under similar circumstances the penalty levied u/s. 271B was deleted by the I.T.A.T. He reiterated the arguments taken before the ld.CIT(A).
The Ld. DR submitted that during the course of hearing the AR of the assessee was asked to produce all correspondence made by the assessee with the Co-operative department to ensure that the audit is done within the specified date. However, the AR has been unable to provide any correspondence or other evidence to show that any effort was made by the assessee to ensure that the co-operative deptt. Appoints auditors in time and that the audit done by the specified date.
We heard rival submissions and perused the material available on record. As rightly pointed out by the ld. AR that this Tribunal decided the identical issue by holding that the delay caused in obtaining and filing the audit report was beyond the control of assessee. The relevant portion at para 9 of said order dt. 28-02- 2017 is reproduced herein below:-
9. In the present case also the assessee could not obtain and file the tax audit report as required u/s. 44AB of the Act due to delay in appointment of auditors by the co-operative department for statutory audit. The appointment is not in the control of the assessee. It is only then after that the assessee appoints tax auditor. The assessee filed the tax audit report immediately after obtaining the same from its Tax Auditor in Form No.3CA on 14-09-2009. We find that the issue on hand is similar to that case decided by order dated 03-06-2016 by the Coordinate Bench of this Tribunal passed in in the case of supra. Following the same, we are of the view that it is not a fit case to impose the penalty of Rs.1,00,000/- u/s. 271B of the Act. Therefore, we cancel the penalty imposed by the AO and confirmed by the CIT(A). Therefore, ground raised by the assessee is allowed.”
Following the same, we are of the view that it is not a fit case to impose the penalty of Rs.1,00,000/- u/s. 271B of the Act. Therefore, we cancel the penalty imposed by the AO and confirmed by the CIT(A). Therefore, ground raised by the assessee is allowed.
In the result, the appeal of the assessee in for A.Y 2010-11 is allowed.
ORDER PRONOUNCED IN OPEN COURT ON 13-09-2017