2017 (3) TMI 101 - AT - Income Tax

Penalty U/S 271B - delay in filing the Tax Audit Report before the specified date - Held that - The assessee could not obtain and file the tax audit report as required u/s. 44AB of the Act due to delay in appointment of auditors by the co-operative department for statutory audit. This appointment is not in the control of the assessee. It is only then after that the assessee appoints tax auditor. The assessee filed the tax audit report immediately after obtaining the same from its Tax Auditor in Form No.3CA on 14-09-2009. Thus it is not a fit case to impose the penalty u/s. 271B of the Act. - Decided in favour of assessee.

Summary

Issues:
Confirmation of penalty under section 271B of the Income Tax Act, 1961 by CIT(A) for A.Ys 2008-09 and 2009-10.

Detailed Analysis:

*Issue 1: Confirmation of Penalty by CIT(A)*
The Assessee's appeals were against the penalty of ?1,00,000 each imposed by the Assessing Officer under section 271B of the Income Tax Act, 1961. The key issue was whether the CIT(A) was correct in confirming the penalty. The CIT(A) upheld the penalty citing that the appellant failed to prove a reasonable cause for the delay in filing the Tax Audit Report. The CIT(A) deemed the explanation provided by the Assessee unacceptable, leading to the confirmation of the penalty.

*Issue 2: Tribunal's Consideration*
The Tribunal considered the circumstances of the case where the Assessee, a Co-operative Society, faced delays in obtaining and filing the audit report due to factors beyond its control. The Tribunal referred to a similar case decided by a Coordinate Bench where the delay was attributed to the completion of statutory audit by auditors appointed by the Cooperative Department. The Tribunal found merit in the contention that the delay was due to reasons beyond the Assessee's control, constituting sufficient cause for the failure to comply with the statutory requirements.

*Issue 3: Decision of the Tribunal*
The Tribunal, based on the precedent and the facts of the case, concluded that it was not a suitable scenario to impose the penalty under section 271B. The Tribunal noted that the delay in filing the Tax Audit Report was technical or venial in nature, and the Assessee had filed the report promptly upon obtaining it from the Tax Auditor. Consequently, the Tribunal canceled the penalty imposed by the Assessing Officer and confirmed by the CIT(A) for both A.Ys 2008-09 and 2009-10.

*Final Decision:*
The Tribunal allowed the appeals of the Assessee for A.Ys 2008-09 and 2009-10, emphasizing that the delays in obtaining and filing the audit reports were beyond the Assessee's control, justifying the cancellation of the penalties imposed under section 271B of the Income Tax Act, 1961.