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TMI Blog2023 (4) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... obtaining the audit report. Since the auditor was appointed by the Registrar of Cooperative Societies on 17.10.2014, therefore, there is no delay on the part of the assessee. Accordingly, we are of the considered opinion that the penalty levied by the AO u/s.271B of the Act and confirmed by the ld. CIT(A) deserves to be deleted and we do so. Thus, appeal of the assessee is allowed. - SHRI RAVISH SOOD, JM SHRI ARUN KHODPIA, AM For the Assessee : Shri G.S.Agrawal, CA For the Revenue : Shri Piyush Tripathi, Sr. DR ORDER Per Arun Khodpia, AM : The assessee has filed this appeal against the order passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 12.12.2021 for the assessment year 2014-2015, on the following grounds:- 1. That the Appellant is functioning in a remote small village at Sakri. 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. 2. Without prejudice, That the Ld. CIT (Appeals), NFAC, Delhi erred in passing Order ex-parte. He further erred in not considering the explanation as filed before learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kendrapara Credit Co-operative Society Ltd., ITA No.87/CTK/2021, order dated 07.06.2022, wherein it is held as under :- 8. We have considered the rival submissions. A perusal of the facts as recorded by the AO shows that the delay in submitting the audit report was on account of delay in obtaining audit report from the statutory auditors. It is fairly admitted that the statutory auditors is appointed by the Registrar of Co-operative Societies and not by the assessee. This being so, we are of the view that the assessee has sufficient and reasonable cause for delay in obtaining the audit report. It is also an admitted fact that the audit report was available before the AO, when the assessment was done. This being so, we are of the view that it is a fit case for deletion of penalty u/s.271B of the Act. Consequently, the penalty levied by the AO U/S.271B of the Act and confirmed by the ld CIT(A) stands deleted. ii) M/s TPD 101 Uthangarai Mil Producers Co-operative Society Ltd., ITA No.152/Chny/2021, order dated 29.06.2022, wherein it is held as under :- 7. We have heard both the parties and perused the materials available on record and gone through the orders of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cause as provided u/s.271B of the Act, and thus, the AO is erred in levying penalty u/s.271B of the Act. Hence, we direct the AO to delete penalty levied u/s.271B of Act. iii) Arambagh Co-op Agricultural Marketing Society Ltd., ITA No.804 8056/Kol/2014, order dated 28.02.2017, wherein the Tribunal has held as under :- 8. We heard rival submissions and perused the material available on record. As rightly pointed out by the ld. AR that this Tribunal decided the identical issue by holding that the delay caused in obtaining and filing the audit report was beyond the control of assessee. The relevant portion para no-4 of said order dated 03- 06-2016 in the case of supra is reproduced herein below for useful reading: 4. We have heard both the sides and also perused the relevant material available on record. As submitted on behalf of the assessee before the authorities below as well as before us, its failure to obtain and furnish the tax audit report by the specified date of 30.09.2009 as per the requirement of section 44AB was due to delay in completion of statutory audit by the auditors appointed by the Cooperative Department. Since the statutory auditor under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has held as under :- 5. I have given careful thought to the rival submissions advanced before me. There is no dispute that assessee is a cooperative society and its activities are governed by Gujarat Cooperative Societies Act, 1960. The accounts of the assessee are required to be audited by a special auditor appointed by the Registrar of Cooperative Societies. It is well known that Government auditors audit accounts of such cooperative societies. They carry out audit as per the statutory requirements and the assessee can have no control or authority over such auditors. It is settled law that penalty is to be imposed for defiance of law or for not carrying out a statutory obligation. It cannot be imposed on the assessee for nonperformance of duties by public agencies like Government auditors. The assessee right from beginning contended that delay is attributable to late auditing done by the statutory auditors. For the act of statutory auditor, the assessee cannot be held to be responsible under a provision like section 271B. It has been a settled law since the decision of Hindustan Steel Ltd. v. State Of Orissa . [1972] 83 ITR 26 (SC) that the levy of penalty is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 271B was imposed on assessee - Tribunal granted relief to assessee under section 273B holding that assessee established that appointment of auditor was not within his domain and, it was also not within his domain to have auditor to be appointed by Registrar or such person as appointed by State Government, to complete audit within specified date - Whether on fact there was no scope of interference with this appeal - Held, yes [Para 2] [In favour of assessee] vii) Hindustan Steel Ltd., [1972] 83 ITR 26 (SC), wherein the Hon ble Supreme Court has held as under :- Section 270 of the Income-tax Act, 1961 - Penalty - General - Penalty is not to be imposed if there is no conscious breach of law An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or guilty of conduct, contumacious or dishonest, or acted in conscious disregard to its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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