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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: Shri S.S Viswanethra Ravi
This appeal filed by the assessee is directed against the order CIT(A)- XXXVI, Kolkata dated 12-8-2013 for the assessment year 2009-10, whereby he confirmed the penalty of Rs. 52,920/- imposed by the Assessing Officer u/s. 271B of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
The assessee in the present case is a Cooperative 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 30.03.2010 as against the specified date of 30.09.2009. The Assessing Officer, therefore, initiated penalty proceedings under section 271B of the Act and in reply to the show-cause notice issued during the course of said proceedings, the assessee- 1 M/s. Tarakeshwar Thana Samabay Krishi Bipanan Samity Ltd society explained that the Senior Auditor appointed by the Cooperative Department to conduct statutory audit could complete their audit only on 29- 01-2010. It was submitted that the assessee-society thereafter appointed Tax Auditor, who in turn submitted his audit report on 27-03-2010, which was filed on 30-03-2010 along with the return of income for the year under consideration. It was contended that the failure to furnish the Tax Audit Report before the specified date of 30-09-2009, therefore, was for sufficient cause and a request was made 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. According to him, the assessee-society could have appointed the Tax Auditor and could have got the tax audit done independently much before the specified date 30-09-2009 and the delay in statutory audit under the Cooperative Act had no relevance with its failure to obtain and furnish the tax audit report by the specified date. He, therefore, rejected the explanation of the assessee and proceeded to impose the penalty of Rs.52,920/- u/s. 271B of the Act.
The penalty imposed by the Assessing officer under section 271B was challenged by the assessee in the appeal before the CIT(A) and the submission made before the Assessing officer was reiterated on behalf of the assessee before the CIT(A) in support of its case. 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 5.1 of his impugned order:- “5.1 However in the present case, there is no evidence of any effort at all to get the account audited and to ensure timely filing of return. Even after obtaining the Audit report in January, the return has been filed towards end of March. As per clause (a) of Section 44AB, the assessee was obliged to get its account audited by an accountant. Under Section 271B of the Act, the failure to accounts audited or furnish the report as required u/s.44AB, attracts 2 M/s. Tarakeshwar Thana Samabay Krishi Bipanan Samity Ltd
penalty. But penalty is not imposable u/s. 273B, if the assessee is able to show that there was a reasonable cause for such failure. The onus is on the assessee to prove that there was a reasonable cause for such failure.”
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. 03-06-2016 of ‘C ‘Bench, Kolkata Tribunal in ITA No. 2396/Kol/201.
The Ld. DR submitted that during the course of hearing the A/R of the assessee was asked to produce all correspondence made by the assessee with the Co-operative department to ensure that the audit is one with the specified date. However, the A/R has been unable to provide any correspondence or other evidence to show that any effort was made by the assessee to ensure that the audit was done by the specified date. IT has merely been stated that no correspondence as to appointment of auditor is needed or done. Further, while the audit by co-operative department was done on 29-01-2010, the Form no. 3CB & 3CD was obtained from a Chartered Accountant on 27-07-2010, after about two months delay.
We have heard the rival submissions and perused the material available on record. As rightly pointed out by the ld. AR, that this Tribunal decided the same issue in favour of the assessee by holding that the delay caused in obtaining and filing the audit report was beyond the control of assessee. The relevant portion para 4 of said order dated 03-06-2016 in the case of supra is reproduced herein below for the sake of clarity:- 4. We have heard both the sides and also perused the relevant material available on record. As submitted on behalf of the assessee before the authorities below as well as before us, its failure to obtain 3 M/s. Tarakeshwar Thana Samabay Krishi Bipanan Samity Ltd
and furnish the tax audit report by the specified date of 30.09.2009 as per the requirement of section 44AB was due to delay in completion of statutory audit by the auditors appointed by the Cooperative Department. Since the statutory auditor under the Cooperative Act was to be appointed by the Cooperative Department and such appointment as well as conduct and completion of audit by the statutory auditor was beyond the control of the assessee, we find merit in the contention of the Id. counsel of the assessee that the delay in completion of statutory audit, which caused the failure of the assessee to obtain and furnish the tax audit report under section 4AB, was due to the reasons beyond the control of the assessee and the same constituted the sufficient cause for its failure to comply with the requirement of section 44AB. Moreover, the tax audit report obtaining belatedly was filed by the assessee along with its return of income for the year under consideration on 05.01.2010 and the same, therefore, was available to the Assessing Officer while making the assessment of the assessee for the year under consideration. The default on the part of the assessee in obtaining and furnishing the tax audit report by the specified date thus was technical or venial in nature. Having regard to all these facts and circumstances of the case, we are of the view that it is not a fit case to impose penalty under section 271B and cancelling the penalty so imposed by the Assessing Officer and confirmed by the ld. CIT(Appeals), we allow this appeal of the assessee.”
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 completion of statutory audit by the auditors appointed by the Cooperative Department. The assessee filed the tax audit report immediately after getting /and obtaining the same from M/s. Ghosal & Ghosal in Form No.3CA on 30-03-2010. We find that the issue on hand is similar to that latest order dated 03-06-2016 by the 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.52,920/- u/s. 271B of the Act. Therefore, we cancel the penalty impose by the AO and confirmed by the CIT(A). The ground raised
by the assessee is allowed. -C-JM 4. M/s. Tarakeshwar Thana Samabay Krishi Bipanan Samity Ltd In the result, the appeal of the assessee is allowed. 8. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 10 /06 /2016
Sd/- Sd/- Waseem Ahmed, S.S Viswanethra Ravi, Accountant Member J Judicial Member
Date 10/06 /2016 Copy of the order forwarded to: 1.. The Appellant/Assessee : M/s. Tarekeshwar Thana Samabay Krishi Bipanan Samity Ltd C/o V.N Purohit & Co, Chartered Accountants, Diamond Chambers, Unit-III, 4th Floor, Suit No.4G, 4 Chowringhee Lane, Kolkata-700 016.
2 The Respondent/Department: The Asstt. Commissioner of Income Tax Circle-I, Aaykar Bhawan, G.T Road, Khadinamore, P.O Chinsurah, Dist:Hooghly PIN 712101.
3 /The CIT,