2023 (4) TMI 1244 - AT - Income Tax

Penalty u/s 271B - default u/s 44AB - assessee has failed to get its accounts audited within the specified due date - what s reasonable cause of delay in terms of Section 273B? - HELD THAT - As the statutory auditor has provided the audit certificate and audit report only on 22.08.2015 and thereafter the tax audit was conducted completed and submitted. This being so we are of the view that the assessee has sufficient and reasonable cause for delay in submitting the audit report. Since the auditor was appointed by the Registrar of Cooperative Societies therefore there is no delay on the part of the assessee. Accordingly we are of the considered opinion that the penalty levied by the AO u/s.271B of the Act and confirmed by the ld. CIT(A) deserves to be deleted and we do so. Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Non-receipt of Notices by the Appellant.
2. Ex-parte Order by CIT(A), NFAC, Delhi.
3. Penalty Confirmation u/s 271B.

Summary:
1. Non-receipt of Notices by the Appellant:
The appellant claimed that functioning in a remote village led to non-receipt of notices from the CIT(A), NFAC, Delhi, resulting in the inability to attend proceedings.

2. Ex-parte Order by CIT(A), NFAC, Delhi:
The appellant argued that the CIT(A), NFAC, Delhi passed an ex-parte order without considering the explanations filed before the AO, as quoted in the penalty order.

3. Penalty Confirmation u/s 271B:
The CIT(A), NFAC, Delhi confirmed the penalty of Rs. 72,065/- levied by the AO u/s 271B for failing to get accounts audited within the specified due date. The appellant contended that the delay was due to the late appointment of the statutory auditor by the Registrar of Cooperative Societies, which was beyond their control, constituting a reasonable cause u/s 273B.

Comprehensive Details:
Non-receipt of Notices:
The appellant, operating from a remote village, did not receive the fixation notices from the CIT(A), NFAC, Delhi, leading to non-attendance at the proceedings.

Ex-parte Order:
The appellant criticized the ex-parte order by the CIT(A), NFAC, Delhi, for not considering the explanations provided to the AO, which were cited in the penalty order.

Penalty u/s 271B:
The appellant's failure to get accounts audited by the due date was attributed to the delayed appointment of the statutory auditor by the Registrar of Cooperative Societies. The audit was completed on 18.09.2015, beyond the specified due date of 30.11.2014. The appellant argued that this delay was beyond their control, invoking reasonable cause u/s 273B. The Tribunal considered similar precedents where delays due to auditor appointments by cooperative departments were deemed reasonable causes for not imposing penalties u/s 271B.

Tribunal's Decision:
The Tribunal, after reviewing the submissions and precedents, concluded that the delay in obtaining the audit report was due to reasons beyond the appellant's control. The statutory audit was completed only after the appointment of the auditor by the Registrar of Cooperative Societies. The Tribunal found the appellant's cause reasonable and directed the deletion of the penalty u/s 271B, thereby allowing the appeal.

Conclusion:
The appeal was allowed, and the penalty u/s 271B was deleted, recognizing the delay as a reasonable cause under Section 273B.