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TMI Blog2021 (11) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ts income was exempt u/s.80P(2) of the Act and its books accounts were subject to audit by Government Auditor. This explanation was not found to be false by the lower authorities. The lower authorities merely rejected the explanation and proceed with levy of penalty. There is nothing on record to doubt the explanation offered by the appellant society. Therefore, when the assessee entertained bona-fide belief that its account were not subject to audit u/s. 44AB, it would certainly constitute reasonable cause for not obtaining the audit report and, therefore, the question of imposing of the penalty u/s. 271B does not arise. Further, we find audit report under the provisions of Maharashtra Co-operative Society was obtained only 27th June, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and circumstances of the case and in law, it may please be held that there was reasonable cause for the appellant assessee for alleged violation of the provisions of Section 44AB of the I.T. Act 1961. In the circumstances, the impugned penalty levied by the learned Assessing Officer may please be deleted. 3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal. 5. Briefly, the facts of the case are as under:- The appellant is a cooperative society registered under the provisions of Maharashtra Co-operative Societies Act, 1960. The appellant society is engaged in the business of purchase and sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount audited u/s. 44AB of the Act, this would constitute a reasonable cause for not getting the books of account audited. Therefore, the penalty proceedings initiated u/s. 274 r.w.s. 271B of the Act should be dropped. However, rejecting the above explanation, the Assessing Officer imposed penalty of ₹ 1,23,800/- u/s. 271B of the Act vide order dated 29.06.2017. Even on appeal before the ld. CIT(A), the same was confirmed by the ld. CIT(A). 6. Being aggrieved, the appellant society is in appeal before us. 7. When the matter was called on none appeared on behalf of the assessee despite due service of notice. 8. On the other hand, ld. Sr. DR placed reliance on the orders of the lower authorities justifying levy of penalty u/s. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the audit report and, therefore, the question of imposing of the penalty u/s. 271B does not arise. Further, we find audit report under the provisions of Maharashtra Co-operative Society was obtained only 27th June, 2017 and, therefore, occasion for filing the tax audit report along with the return of income does not arise. In the circumstances, we find that the lower authorities was not justified in confirming the levy of penalty and accordingly we direct the Assessing Officer to delete the penalty levied u/s. 271B of the Act. 10. In the result, the appeal of the assessee in ITA No. 1543/PUN/2018 is allowed. ITA Nos. 1544, 1547, 1549, 1551 and 1553/PUN/2018 11. As mentioned earlier, the facts and issues involved in both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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