Appellant wins appeal due to delay in audit report, penalty deleted.

The Tribunal found in favor of the appellant, ruling that the delay in obtaining the audit report was due to factors beyond their control, specifically the late appointment of the statutory auditor by the Registrar of Cooperative Societies. As such, the penalty imposed under Section 271B by the AO and confirmed by the CIT(A) was deemed unjustified and ordered to be deleted. The appeal of the assessee was allowed, and the order was pronounced on 21/04/2023.

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Issues Involved:
1. Lack of knowledge of the Notices of fixation by the CIT(A), NFAC, Delhi.
2. Ex-parte order passed by CIT(A), NFAC, Delhi.
3. Confirmation of penalty levied under Section 271B by the AO.

Summary:

1. Lack of Knowledge of Notices:
The appellant argued that operating from a remote village, they were unaware of the Notices of fixation by the CIT(A), NFAC, Delhi, and thus could not attend the proceedings.

2. Ex-parte Order:
The appellant contended that the CIT(A), NFAC, Delhi erred in passing an ex-parte order without considering the explanations provided to the AO and quoted in the penalty order. The appellant emphasized that there was no delay on their part, and the delay in statutory audit was due to the late appointment of the statutory auditor by the Registrar of Cooperative Societies, which was beyond their control.

3. Confirmation of Penalty under Section 271B:
The AO found that the assessee society got its account audited under Section 44AB on 10.12.2014, after the due date of 30.09.2013, and levied a penalty of Rs. 1,09,440/- under Section 271B. The CIT(A) upheld this penalty, leading the appellant to appeal further.

Tribunal's Findings:
The Tribunal considered the appellant's submission that the delay was due to the late appointment of the statutory auditor by the Registrar of Cooperative Societies, which was beyond their control. The Tribunal noted that the statutory auditor was appointed on 17.10.2014, and the tax audit was completed subsequently. The Tribunal found that there was reasonable cause for the delay under Section 273B, and thus, the penalty should be deleted.

Case Laws Cited:
The Tribunal relied on several case laws, including:
- Kendrapara Credit Co-operative Society Ltd.
- M/s TPD 101 Uthangarai Mil Producers Co-operative Society Ltd.
- Arambagh Co-op Agricultural Marketing Society Ltd.
- Ahmedabad Co-operative Dept. Stores.
- Mathana Model Co-op Credit & Services Society Ltd.
- Iqbalpur Cooperative Cane Development Union Ltd.
- Hindustan Steel Ltd.

These cases supported the view that delays due to factors beyond the assessee's control, such as late appointment of statutory auditors by public agencies, constituted reasonable cause for not imposing penalties under Section 271B.

Conclusion:
The Tribunal concluded that the assessee had sufficient and reasonable cause for the delay in obtaining the audit report, and the penalty levied under Section 271B by the AO and confirmed by the CIT(A) should be deleted. The appeal of the assessee was allowed.

Order Pronounced:
The order was pronounced in the court on 21/04/2023.

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