SINGUR THANA LARGE SIZED PRIMARY AGRICULTURE CO-OP. MARKETING SOCIETY LTD.,KOLKATA vs. A.C.I.T CIR - 1,HOOGHLY, HOOGHLY

The assessee in the present case is a Cooperative Society. The Tax Audit Report as required by the provisions of section 44AB was filed by it ./2013 Assessment year: 2009-2010 Page 2 of 4 along with its return of income for the year under consideration on 05.01.2009 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-Society explained that the Senior Auditor appointed by the Cooperative Department to conduct statutory audit could complete their audit only on 26.10.2009. It was submitted that the assessee-Society thereafter appointed Tax Auditor, who in turn submitted his audit report on 15.12.2009, which was filed on 05.01.2010 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 under section 271B. 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 of 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.1,00,000/- under section 271B of the Act.

The penalty imposed by the Assessing Officer under section 271B was challenged by the assessee in the appeal before the ld. CIT(Appeals) and the submission made before the Assessing Officer was reiterated on behalf of the assessee before the ld. CIT(Appeals) in support of its case. The ld. CIT(Appeals), 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 no. 4.1 of his impugned order:- “4.1. The appellant’s submission and evidence available on record has been carefully considered. During the course of hearing, the A/R of the appellant was asked to produce all correspondence made by the appellant with the Cooperative Department to ensure that the audit is done with the specified date. However, the A/R has been unable to provide any ./2013 Assessment year: 2009-2010 Page 3 of 4

correspondence or other evidence to show that any effort was made by the appellant, 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 cooperative department was done on 26.10.2009, the Form No. 3CB & 3CD was obtained from a Chartered Accountant on 15.12.2009, after about two months delay”.

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 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 ld. 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 44AB, 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 ./2013 Assessment year: 2009-2010 Page 4 of 4 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 result, the appeal of the assessee is allowed. Order pronounced in the open Court on June 03, 2016.