Non-Production of Audit Report in Prescribed Format would attract Penalty: ITAT [Read Order]

Form 10B - Tax Audit Report

The Cochin bench of the Income Tax Appellate Tribunal (ITAT) has held that the non-production of the audit report in the prescribed format can be a reason to impose a penalty under Section 271B of the Income Tax Act, 1961.

The assessee filed a belated return without filing the audit report as required under section 44AB of the Act. The assessee was required to file the audit report within the stipulated time limit i.e. on 30/09/2014. Since there was no audit report, the Assessing Officer levied penalty under section 271B of the Act.

Before the Tribunal, the assessee claimed that it is a co-operative society and the audit of the Society is done as per the provisions of Kerala Co-operative Societies Act, 1969. It was claimed that the Society does not have any power in appointing an auditor under the said Act or getting his accounts audited in time. It was, therefore, submitted that the delay in completion of the audit was not because of any default on the part of the assessee Society.

On behalf of the department, it was contended that the assessee had not given any satisfactory explanation for non-submission of the audit report along with Form 3CA is required to be filed under Rule 6G(1) of the I.T. rules. The said rule provides that in the case of an assessee who carries on the business and is required under any other law to get his accounts audited, the report of such audit of accounts of the assessee is required to be furnished under section 44AB of the Act.

The Tribunal noted that as per proviso to section 44AB, if a person is required under any other law to get his accounts audited, getting the account audited under that law before the specified date and furnished by that date, the report of such audit report would be constituted as sufficient compliance of section 44AB of the Act. In the present case, the assessee is required to get its accounts audited under Co-operative Societies Act ad it has to file the return of income on 20/03/2015 as per the second proviso to section 44AB of the Act.

“As seen from the assessment order in para 3, the assessee furnished documents such as Annual Report of the Financial year 2013-14 depicting the audited financial statements, copy of receipts and distribution statement etc. The audit report by the accountant in the prescribed format was not produced before the Assessing Officer. In our opinion, non-production of the audit report in the prescribed format can be a reason for levying penalty u/s. 271B of the Act. Thus, this is a fit case for levying penalty u/s. 271B of the Act as the assessee has not given an explanation regarding the reasonable cause for not filing the audit report within the prescribed time limit. Accordingly, we confirm the penalty levied u/s. 271B of the Act,” the Tribunal said.

Subscribe Taxscan Premium to view the Judgment
taxscan-loader