PANNIVIZHA SERVICE CO-OP BANK LTD,PATHANAMTHITTA vs. THE ITO, KOLLAM

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ITA 184/COCH/2021Status: DisposedITAT Cochin15 March 2022AY 2012-133 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the penalty levied under Section 271B. The assessee, being a cooperative bank, is obligated to file its audit report within the stipulated time, and failure to do so warrants the penalty.

What were the facts?

The assessee, a Cooperative Bank, failed to file its audit report within the prescribed time for assessment years 2011-12 and 2012-13. Consequently, the Assessing Officer levied a penalty under Section 271B of the Income Tax Act, 1961.

What were the issues?

Whether the penalty under Section 271B is leviable for belated filing of the audit report by a cooperative bank.

Which sections of the Income-tax Act were involved?

Section 271B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri George Mathan, JM & Shri M. Balaganesh, AM

For Respondent: Smt. J.M. Jamuna Devi, Sr. D.R
Hearing: 15.03.2022Pronounced: 15.03.2022

These are appeals filed by the assessee against the order of the learned CIT(A), National Faceless Appeal Centre, Delhi in appeal No. CIT(A), Thiruvananthapuram/10138/2019-20 dated 23.09.2021 for assessment years 2011-12 & 2012-13 against confirmtion of penalty levied under Section 271B of the Income Tax Act, 1961.

2.

None appeared on behalf of the assessee. Smt. J.M. Jamuna Devi, Sr. D.R. represented Revenue.

3.

It was submitted by the learned D.R. that the assessee is a Cooperative Bank and it had not filed its return till the assessment year 2010-11. It was the submission that when the return was filed for AY 2011-12 audit report was belated and consequently penalty under Section 271B of the Act was levied by the AO. It was the submission that the assessee is duty bound to file its audit report within the prescribed time & 184/Coch/2021 2 M/s. Pannivizha Service Co-op. Bank Ltd. limit and the assessee having failed to do the same the penalty be confirmed.

4.

We have considered the rival contentions and also perused the ground of appeal and order of the learned CIT(A). A perusal of the reply to the show cause notice filed by the assessee shows that the assessee has categorically submitted that the assessee is primarily a cooperative credit society. The account finalization and audit is conducted by the Registrar of Cooperative Societies. The assessee only does preparation and disbursement of accounts. Creation of provisions and allocation of various reserves are after verification from the government department, which cause delay to finalization. Consequently the delay has happened on account of facts beyond the control of the assessee. This submission of the assessee has not been found to be false. Further, when the assessment was being completed the audit report was available with the Assessing Officer. In these circumstances we are of the view that the reasons submitted by the assessee is acceptable and consequently the penalty levied under Section 271B of the Act is liable to be deleted. Further, in view of the decision of the Hon'ble Madras High Court in the case of CIT vs. A.N. Arunachalam 208 ITR 481, as the audit report was available at the time of assessment, on this ground also penalty is liable to be cancelled and we do so.

5.

In the result, the appeals filed by the assessee are allowed.

Dictated and pronounced in the open Court on 15th March, 2022.

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