UDUMBANNOOR SERVICE CO-OP BANK LTD,IDUKKI DIST vs. THE ITO WARD 2, THODUPUZHA

Coming to the assessee sole substantive grievance that both the ld. lower authorities have erred in law and on facts in levying s. 271B penalty, it is contended that this taxpayer’s books had already been audited by the competent authority, i.e. the Registrar of Cooperative Societies, Kerala. Learned counsel further submits that section 44AB, third provision itself envisages leverage to such a compliance of audit; which in turn, has been Udumbannoor SCB Limited. duly acknowledged in s. 271B as well. The assessee next takes us to the impugned penalty provisions, i.e. s. 271B wherein the corresponding audit is as required u/s. 44AB of the Act only. That being the case, learned counsel accordingly argues that once the assessee has satisfied the rigor of s. 44AB itself in the foregoing terms, then s. 271B penalty could not have been imposed in the facts and circumstances of the case.

The Revenue on the other hand strongly argues that s. 271B stipulates that tax audit report should be filed within the statutory limit provided in the Act, therefore, the impugned penalty deserves to be sustained.

We find no reason to accept the Revenue’s above stand. We have made it clear in the preceding paragraphs that s. 44AB forms the basis of the impugned penalty u/s. 271B of the Act, in case the assessee fails to comply with the rigor of the tax audit compliance. We reiterate that this assessee is a co-operative credit society wherein it already gets its accounts audited by the departmental auditor. We are of the considered view in these facts that the impugned penalty cannot be sustained as the assessee is a co- operative society duly audited under the provisions of the Stage government Act. The impugned penalty levied by both the lower authorities that it has not got it books audited u/s. 44AB is deleted therefore.

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