1992 (8) TMI 137

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..... partmental Representative Shri S.K. Kundra contended that assessee having committed a default in not obtaining the audit report in accordance with the provisions of s. 44AB and not having filed the copy of the audited accounts along with the return, penalty under s. 271B was warranted. According to the learned Departmental Representative, CIT(A) was not justified in taking into account the delay in appointing the statutory auditors by the Registrar of Co-operative Department for deleting the penalty. 3. We have received written submissions on behalf of the assessee. On consideration of the rival contentions we are satisfied that the decision of the CIT(A) is in order. Sec. 44AB was incorporated by the Finance Act of 1984 w.e.f. 1st April, .....

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..... ccounts of every co-operative society at least once in each year." It is evident from the aforesaid provision that the Registrar is under the obligation to audit or to cause the audit done. It is not disputed that there was a delay by the Registrar of Societies in appointing the statutory auditors in the case of the assessee. The auditors had been appointed as late as on 27th June, 1988 vide order No. F. 15. The audit reports in respect of asst. yrs. 1985-86 and 1986-87 have been obtained on 7th Nov., 1988 and copies furnished before the first appellate authority as well as before us. It is in the light of these circumstances that the CIT has come to the conclusion that the delay in getting the accounts audited in accordance with s. 44AB .....

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..... . 1st April, 1989. Before the aforesaid amendments the penalty under s. 271B was provided where the assessee had failed to furnish the report along with the return of income. However, w.e.f. 1st April, 1989 penalty has been provided for the default in not attaching the report along with the return also. This amendment being applicable w.e.f. 1st April, 1989 is not applicable in this case. Taking the laws it existed as on the 1st day of the respective assessment years into account, penalty under s. 271B could not be imposed unless assessee had failed to obtain the report without a reasonable cause. In this case, the reason for the delay in obtaining a report is the delay beyond the control of the assessee, i.e., the appointment of the audito .....

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