M/S. MADHYA PRADESH AUDYOGIK KRNDRA VIKAS NIGAM (INDORE) LIMITED,INDORE vs. THE DCIT-3(1) RANGE-3, INDORE

Since, the issue involved in these appeals are common, these are heard analogously and are being disposed of by a common order.

We have heard the parties and perused the materials available on record.

The assessee has challenged the penalty to the tune of Rs.1,50,000/- levied under Section 271B of the Act. The assessee, a Government company, wherein appointment of Auditor in the case of the appellant was governed by 154, 497 & 498/Ind/2019 (M/s. Madhya Pradesh Audyogik Kendra Vikas Nigam & Anr.) - 3 - the provision of section 619(2) of the Companies Act, 1956 for the year under consideration. In short, the Auditor, in the case of the appellant was to be appointed by the Comptroller and Auditor-General of India. In this particular case for the year under consideration, the Auditor was appointed late and was entrusted with the work of completing the audit and furnishing the statutory audit report for the relevant financial year. The Auditor completed the audit and finalized their reports only on 19.12.2012 whereas the due date for furnishing of tax audit report in terms of provision of Section 44B of the Act for the year under consideration was 30.09.2012. As the finalization of the statutory audit was made only on 19.12.2012, tax audit report could not be filed within the prescribed date i.e. 30.09.2012 instead of the same could be filed only on 16.05.2013. The crux of the submission made by the assessee is this that the delay in completion of statutory audit constitutes a reasonable cause for the delay in completion and submission of tax audit report under section 44AB of the Act. Such delay is not attributable to the appellant since neither the appointment of the statutory auditor nor the completion of statutory audit was within the control and domain of the appellant. In that view of the matter the case made out by the appellant, when reasonable cause for delay in furnishing of tax audit report as per provision of Section 271B r.w.s. 273B of the Act has been established, we find substance in the argument as advanced by the Ld.AR that the levy of penalty under S.271B of the Act is not sustainable and requires to be deleted. In this regard, we have carefully considered the judgment passed by the Jaipur Bench in the case of M/s. Rajasthan Rajya Vidyut Utpadan Nigam Ltd. vs. ACIT ITA No.100/JP/2018 order dated 28.03.2018 as relied upon by the appellant, copy ITA Nos.153, 154, 497 & 498/Ind/2019 (M/s. Madhya Pradesh Audyogik Kendra Vikas Nigam & Anr.) - 4 - whereof also has been handed over to us. Upon perusal of the same, we find the following observation made by the said Bench on the identical issue is as follows:

In the instant case, we find that there is a reasonable cause for the delay in completion and submission of the tax audit report under section 44AB of the Act due to delay in appointment of statutory auditors and consequent delay in finalization of annual accounts for the earlier years. Following our aforesaid decision, the penalty levied under section 271B is hereby directed to be deleted.” In this particular case, the penalty was deleted on the ground that delay in appointment of Auditor and consequent delay in finalization of annual accounts cannot be attributable to the assessee. Under these circumstances, , 154, 497 & 498/Ind/2019 (M/s. Madhya Pradesh Audyogik Kendra Vikas Nigam & Anr.) - 5 - respectfully relying upon the judgment mentioned above, the impugned penalty, in our considered opinion, is not sustainable in the eye of law and thus, the same is hereby deleted.

In the result, assessee’s appeal is allowed.

The grounds of appeal as argued by the Ld. AR in 497 & 498/Ind/2019 are identical to that of the issue already been dealt with by us in A.Y. 2012-13 and in the absence of any changed circumstances the same shall apply mutatis mutandis. Hence, these grounds of appeal preferred by the assessee in ITA Nos.154, 497 & 498/Ind/2019 are allowed.

In the combined result, all captioned appeals of assessee are allowed.