Delay in Statutory Audit is a Reasonable Cause for late filing of Tax Audit Report: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Jaipur has held that the delay in the completion of the statutory audit can be a reasonable cause for delay in filing of the tax audit report.

Coming to the facts of the case, the C&AG has appointed the statutory auditor of the assessee company on 02.09.2014 and after confirmation of remuneration and other terms of appointment by the Board of Directors, the statutory auditors have given their acceptance on 22.09.2014. The statutory audit was thereafter undertaken and the statutory auditors have given their audit report on 15.01.2015 and thereafter the tax auditor completed the tax audit on 28.09.2015.

The Tribunal found that the facts of the present case are parimateria to the facts in case of the M/s RRVUNL Vs. ACIT wherein the Co-ordinate Bench has held that where there is a delay in completion of statutory audit, there exist a reasonable cause for the delay in completion of tax audit and issuance of tax audit report.

“The ratio of the said decision equally applies in the instant case as the accounts of the assessee company are subject to statutory audit and once the statutory audit is completed, the tax audit can be initiated. Further, we find that under similar fact pattern, there was delay in completion of tax audit for the previous AY 2013-14 and the penalty proceedings so initiated u/s 271B were dropped by the Assessing officer himself. In light of the same, the penalty so levied under section 271B is hereby directed to be deleted,” the Tribunal said.