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

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

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.

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.

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