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Issues:
1. Imposition of penalty under section 271B of the IT Act, 1961 for failure to get accounts audited and file reports in accordance with section 44AB. 2. Interpretation of section 44AB and its applicability to the case. 3. Consideration of delay in appointing statutory auditors by the Registrar of Co-operative Department. 4. Analysis of relevant amendments in section 271B and their impact on penalty imposition. The judgment by the Appellate Tribunal ITAT Jaipur involved two appeals by the Revenue concerning the imposition of penalties under section 271B of the IT Act, 1961 for the assessment years 1985-86 and 1986-87. The CIT(A) had deleted the penalties, leading to the Revenue's appeal. The Departmental Representative argued that the penalties were warranted due to the assessee's failure to comply with the audit report requirements of section 44AB. The Tribunal noted that section 44AB mandates auditing of accounts for certain thresholds and exceptions for cases where audits are required by other laws. In this case, the assessee, a co-operative society, was subject to audit obligations under the Rajasthan Co-operative Societies Act, 1965, where the Registrar is responsible for audits. The delay in appointing auditors by the Registrar led to delayed audit reports, which the Tribunal considered as not deliberate non-compliance. The Tribunal highlighted the legislative intent behind section 44AB to deter tax avoidance and evasion. The amendments to section 271B were also discussed, emphasizing that penalties could not be imposed without reasonable cause, and in this case, the delay was beyond the assessee's control. Consequently, the Tribunal upheld the CIT(A)'s decision to delete the penalties for both assessment years, dismissing the Revenue's appeals.
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