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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Sanjay Arora & Shri Manomohan Das
O R D E R
Per Sanjay Arora, AM
The instant Appeals, by two different Assessees, are directed against confirmation of penalty under section 271B of the Income Tax Act, 1961 (‘the Act’) for Assessment Year (AY) 2012-13 vide separate orders dated 30.12.2021 & 23.01.2022 by the Commissioner of Income Tax (Appeals), NFAC [CIT(A)] vide
ITANos. 224 &303/Coch/ 2023 (AY 2012-13) SA Nos. 38 & 55/Coch/2023 Vellttanjoor SCB & Vatanapally SCB vs. ITO orders dated 06.03.2023 & 29.03.2023 respectively. The appeals raising the same issue, with identical facts, were heard in tandem, and which explains a joint order.
The assessee, a primary agricultural credit society (PACS) registered under the Kerala Co-operative Societies Act, 1969 (Kerala Act), explained the delay in the submission of the audit report u/s. 44AB of the Act, for which the impugned penalty has been levied, as on account of delayed receipt of audit certificate from the Joint Registrar of Co-operative Societies, i.e., on 31.5.2013, as against the due date of its filing u/s.44AB on 30.9.2012. The same did not find favour with the Revenue authorities, who levied penalty in the sum of Rs.1,04,310 and confirmed the same, relying on the decision in Peroorkkada Service Co-operative Bank Ltd. vs. ITO [2020] 424 ITR 422 (Ker). Aggrieved, the assessee is in second appeal.
Before us, the assessee’s case was that the decision in the case of Peroorkkada Service Co-operative Bank Ltd. (supra) was rendered in the fact situation of the audit report u/s.44AB having not been furnished, so that the furnishing the audit report under the Kerala Act was by itself not in sufficient compliance of s. 44AB of the Act.
We have heard the parties, and perused the material on record. 4.1 The only question before us is whether the assessee has been able to prove reasonable cause for the delayed submission of both the audit reports, i.e., in Form 3CD as well as that under the Kerala Act, as mandated by s. 44AB and, further, clarified in Peroorkkada SCB Ltd. (supra), holding that only the filing of both the audit reports could be regarded as due compliance of the provision. The same, as admitted by the learned counsel for the assessee, Shri Ramdas, was furnished only on 27.04.2019, i.e., at a delay of nearly 6 years after its receipt. Where, the Bench would question during hearing, to no answer, is the need to ascertain the reasons for the delayed furnishing of the audit reports when the same have admittedly been filed Page 2
ITANos. 224 &303/Coch/ 2023 (AY 2012-13) SA Nos. 38 & 55/Coch/2023 Vellttanjoor SCB & Vatanapally SCB vs. ITO years after their receipt? It is only on furnishing thereof that statutory obligation u/s.44AB of the Act is satisfied, and not merely on the assessee obtaining it, qua which the law stands amended by Finance Act, 1995 w.e.f. 01.07.1995.
4.2 Reasonableness is essentially a matter of fact, and which would therefore need to be established in each case. Further, true, there had been submission of only one of the two reports, as required by section 44AB, in Peroorkkada SCB Ltd. (supra). It is this that led the Hon'ble Court to state that there was no compliance or sufficient compliance of the provision, once again exhibiting, if that was necessary, that the statutory obligation cast by s.44AB of the Act is mandatory, and cannot be regarded as a mere formality, and it’s breach, by extension, technical or venial. The obligation is further independent of the filing the return of income and, thus, the ensuing assessment proceedings. Why, there may be no assessment proceedings in a particular case, as indeed is for most of the returns, and, therefore, the plea that the audit report was available at the time of assessment is without basis in law. The delay would thus need to be explained on the anvil of a reasonable cause for saving penalty u/s. 271B.
In view of the foregoing, we find no merit in assessee’s case.
The facts and circumstances of this case are same as that for the appeal in (of receipt of audit report from the Jt. Registrar and it’s filing) being 31/7/2013 and 15/5/2019 respectively. Our decision therein shall, accordingly, equally apply for this appeal as well.