The Income Tax Appellate Tribunal (ITAT), Cuttak bench has held that the penalty under section 271B of the Income Tax Act, 1961 cannot be levied for delay in filing of audit report due to statutory auditors.
The assessee, Kendrapara Credit Co-operative Society Ltd, has contended that the audit report of the assessee was not submitted in time because same was received belatedly from the statutory auditors, who are to do the audit of the assessee as per the Co-operative Society Act. It was also argued that the delay in getting the report of audit done by the statutory auditors was beyond the control of the assessee.
After hearing rival contentions, the Tribunal bench comprising Shri George Mathan, Judicial Member and Shri Arun Khodpia, Accountant Member held that “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.”
Assessee was represented by Shri C.Parida.
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