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TMI Blog2023 (8) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... .DR ORDER PER ARUN KHODPIA, ACCOUNTANT MEMBER: The assessee has filed this appeal against the order passed by the Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi, dated 29.11.2021, for the AY 2013-14, emerged on account of appeal against the penalty order u/s. 271 of the Income Tax Act, 1961 (in short the Act ) passed by the Assessing Officer (in short AO ) dated 02.05.2016. 2. The assessee has raised the following grounds of appeal: 1. That under facts and Jaw, the Ld. C1T (Appeals), NFAC, Delhi erred in passing Order ex-parte. He further erred in not considering the explanation mentioned in the penalty order of the Ld. Assessing Officer. The Appellant is functioning in a remote small village at Dhorra and is primary agriculture crop society. The Notices of fixation by the Ld. CIT (Appeals), NFAC, Delhi did not come to the knowledge of the Appellant, and therefore, proceeding could not be attended. Prayed to cancel penalty. - Rs. 62,370/- 2. That the Ld. CIT (Appeals), NFAC, Delhi erred in confirming the penalty levied u/s 271B by the Ld. Assessing Officer at Rs. 62,370/-. Prayed that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Chhattisgarh. The case of the assessee for the relevant assessment year was selected for scrutiny and order u/s. 143(3) was passed on 19.01.2016. During the course of scrutiny assessment proceedings, it was noticed that the assessee has failed to get its accounts audited within the specific due date i.e. 30.09.2013. Accordingly, provisions of sec. 44AB of the Act, were violated and penalty proceedings u/s. 271B of the Act, was initiated. Subsequently, order u/s. 271B of the Act, passed by the AO imposing penalty of Rs. 62,370/- on the assessee. Aggrieved by the penalty order of the AO, the assessee preferred an appeal before the Ld.CIT(A), NFAC. However, with no success, the appeal filed by the assessee was dismissed. Now, the assessee is before us with the grievance that explanations of the assessee were not considered by the Ld.CIT(A) and has passed an ex parte order. 5. At the inception, the Ld.AR submitted that the case of the assessee is squarely covered by the decision of the ITAT, Raipur Bench, Raipur, in the case of Gramin Sewa Sahakari Samiti Maryadit v. ITO-1(2), Raipur, in ITA No.22/RPR/2022 for the AY 2014-15, order dated 21.04.2023. The observations of the ITAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uditor and copy of Form No.3CA i.e. Auditor s Report u/s. 44AB of the Act, dated 21.11.2014 are extracted below for ready reference: FORM NO. 3CA [See rule 6G(1)(a)] Audit report under section 44AB of the Income-tax Act, 1961, in a case where the accounts of the business or profession of a person have been audited under any other law 1. I report that the statutory audit of M / s. M/S. AADIM JATI SEWA SAHAKARI SAMITI MARYADIT DULLA GROUND FLOOR, OPP. LAL GANGA, G.E.ROAD, RAIPUR (PAN) AABAA7987L was conducted by M/s The Registrar of Cooperative society in pursuance of the provisions of the The cooperative societies act Act, and I annex hereto a copy of Their audit report dated 06-Mar-2014 along with a copy each of - (a) the audited Profit and loss account for the period beginning from 01-Apr-2012 to ending on 31-MAR-2013 (b) the audited balance sheet as at 31-MAR-2013; and (c) documents declared by the said Act to be part of, or annexed to, the profit and loss account and balance sheet. 2. The statement of particulars required to be furnished under section 44AB is annexed herewith in Form No. 3CD. 3. In my opinion and to the best of my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in filing tax audit report. As per which, the audit of accounts of society done by the Dept. of Cooperative Audit, could not be completed on or before 31.10.2015 and said delay was not in the hands of the assessee. Therefore, there is a reasonable cause for not filing the tax audit report within prescribed time limit ad thus, penalty cannot be levied. We find merits in the submission of the assessee for the simple reason that non-filing of audit report within the due date is a venial technical breach without any mala fide intention on the part of the assessee. Because, completion of audit of books of accounts of the society is under the control of Dept. of Cooperative Audit and thus, unless the Dept. of Cooperative Audit completes audit, the assessee cannot file return of income along with tax audit report. Therefore, we are of the considered view that reasons given by the assessee for not filing tax audit report prescribed u/s. 44AB of the Act, is neither intention nor any mala fide intention, but it is venial technical breach and for this reason, penalty u/s. 271B of the Act, cannot be levied. This principle is supported by the decision of the Hon ble jurisdictional High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use for its failure to comply with the requirement of section 44AB. Moreover, the tax audit report obtaining belatedly was filed by the assessee along with its return of income for the year under consideration on 05.01.2010 and the same, therefore, was available to the Assessing Officer while making the assessment of the assessee for the year under consideration. The default on the part of the assessee in obtaining and furnishing the tax audit report by the specified date thus was technical or venial in nature. Having regard to all these facts and circumstances of the case, we are of the view that it is not a fit case to impose penalty under section 271B and cancelling the penalty so imposed by the Assessing Officer and confirmed by the ld. CIT(Appeals), we allow this appeal of the assessee. 9. In the present case also 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 ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the act and conduct of the assessee. Therefore, in my opinion, it is not a fit case for levy of penalty under section 271B of the IT Act. The penalty levied is held to be unjustified and is cancelled. In the light of above finding I deem it unnecessary to go into several other legal issues raised by the learned counsel for the assessee. The penalty imposed is cancelled. v) Mathana Model Co-op Credit Services Society Ltd., [2008] 299 ITR 70 (Punjab Haryana), wherein the Hon ble Punjab Haryana High Court held as under :- Section 271B, read with section 273B, of the Income-tax Act, 1961 - Penalty - For failure to get accounts audited - Assessment year 2004-05 - As assessee-co-operative society failed to get its accounts audited within stipulated date, a show-cause notice under section 271B was issued to it - Assessee submitted copy of audit report along with its reply stating that it being a co-operative society was required to get its accounts audited by auditor appointed by Registrar, Co-operative Societies and since auditor was not appointed by Registrar within stipulated time, audit report could not be submitted in time - Assessing Officer rejected assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was provided with sufficient opportunities to represent its case before the ld. CIT(A), but the assessee failed to furnish any evidence in support of its contention. Accordingly, the ld. CIT(A) has rightly confirmed the penalty levied by the AO, and, therefore, the appeal of the assessee deserves to be dismissed. 9. We have considered the rival contentions and perused the materials available on record and referred to the case laws, on which, reliance was placed by the Ld.AR. Before us, the Ld.AR of the assessee has filed a Paper Book containing documents relating to statutory audit, appointment of tax auditor and tax audit report of the assessee s society. On perusal of such evidence, which were extracted hereinabove, it is an admitted fact that the statutory audit of the assessee s society was completed on 06.03.2014, Tax auditor was appointed on 17.10.2014 and the tax audit in Form Nos.3CA 3CD were completed by the Tax Auditor on 21.11.2014. That, on receipt of Tax audit by the assessee s society on 21.11.2014 immediately after two days on 23.11.2014, the assessee has filed the Tax Audit Report with the departmental authorities on 23.11.2014. These facts are explain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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