Income Tax Appellate Tribunal (ITAT), Ahmedabad deleted penalty imposed as there was delay due to belated audit of accounts by Department of Cooperative Audit.
The assessee, M/s. T P D 101 Uthangarai Milk- Producers Co-operative Society Ltd. is a registered Cooperative Society under the Tamil Nadu Co-operative Societies Act, 1983. The assessee had filed its return of income for the AY 2015-16 on 05.03.2016 declaring income of Rs.NIL after claiming deduction u/s.80P(2) of Income Tax Act amounting to Rs.4,62,022/-. The assessment has been completed u/s.143(3) of the Act, dated 01.11.2017 and determined total income at Rs.7,18,943/-. Thereafter, the AO initiated penalty proceedings u/s.271B of the Act, for belated filing of tax audit report as prescribed u/s.44AB of the Act.
The assessee carried the matter before the first appellate authority, but could not succeed. The CIT(A) for the reasons stated in his appellate order dated 31.03.2021 sustained penalty levied by the AO on the ground that the reasons sought to be given for default was not backed by any evidence and thus, no reasonable cause within the meaning of Sec.273B of the Act, could be established.
The bench consisting of Mahavir Singh, Vice President and G Manjunatha, Accountant Member held that “although the assessee has filed tax audit report beyond the stipulated period, but such tax audit report was made available to the AO before he completes assessment proceedings. The assessee has given reasons for delay 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.”
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