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of <h1>Court upholds relief for co-op society in audit delay case under Income Tax Act</h1> <h3>COMMISSIONER OF INCOME TAX AND ANOTHER Versus M/s IQBALPUR COOPERATIVE CANE DEVELOPMENT UNION LTD</h3> COMMISSIONER OF INCOME TAX AND ANOTHER Versus M/s IQBALPUR COOPERATIVE CANE DEVELOPMENT UNION LTD - [2013] 356 ITR 343 Issues:1. Interpretation of Section 44AB of the Income Tax Act regarding audit requirements for co-operative societies.2. Imposition of penalty under Section 271B for delay in conducting audit and signing the audit report.3. Application of Section 273B of the Income Tax Act for granting relief based on reasonable cause for the delay.Analysis:1. The judgment revolves around the interpretation of Section 44AB of the Income Tax Act in relation to audit requirements for co-operative societies. The provision mandates that businesses with turnover exceeding one crore rupees must get their accounts audited by a specified date. In this case, the respondent co-operative society's turnover exceeded the threshold, necessitating an audit. However, the audit was not completed before the specified date, leading to penalty proceedings under Section 271B.2. The penalty under Section 271B was imposed on the respondent for the delay in conducting the audit and signing the audit report within the prescribed timeline. Despite losing before the Commissioner of Appeals, the respondent succeeded before the Tribunal. The Tribunal granted relief under Section 273B of the Income Tax Act, citing reasonable cause for the delay. It was argued that the respondent had no control over the appointment of the auditor, as it was the Registrar's responsibility, and thus, the delay was justified.3. The Tribunal's decision to provide relief under Section 273B was upheld by the High Court. The court found that the respondent had demonstrated a reasonable cause for the delay in completing the audit and signing the audit report. Since the appointment of the auditor was not within the respondent's control, and it was also not responsible for the auditor's timely completion as per the Income Tax Act, the court dismissed the appeal and upheld the relief granted by the Tribunal.In conclusion, the judgment clarifies the audit requirements for co-operative societies under the Income Tax Act, addresses the penalty for delayed audits under Section 271B, and highlights the application of Section 273B for granting relief based on reasonable cause for the delay in audit completion.
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