Tribunal upholds penalties for delayed audit reports under Income-tax Act

The Tribunal confirmed penalties under section 271B of the Income-tax Act for assessment years 2012-2013 and 2017-2018 against a co-operative society. The assessee's argument of delayed audit reports due to receiving them late was rejected as inadequate. The Tribunal found no issue with the timing of penalty notices and dismissed the appeals, declining interference and dismissing stay petitions. The order was pronounced on June 12, 2023.

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Issues:
The judgment involves confirmation of penalty under section 271B of the Income-tax Act, 1961 for assessment years 2012-2013 and 2017-2018 against a co-operative society registered as a Primary Agricultural Credit Society (PACS) under the Kerala Co-operative Societies Act, 1969.

Details of the Judgment:

Background and Circumstances:
The assessments for both years denied the assessee the benefit of deduction u/s. 80P(2)(a)(i) following a decision by the Hon'ble jurisdictional High Court. The deduction u/s. 80P was restricted to income from providing credit to members for agricultural purposes. Penalty proceedings were initiated for non-compliance with sec. 44AB, and penalties were levied. The tax audit reports were furnished much beyond the specified dates, leading to the penalty proceedings.

Arguments and Findings:
The assessee argued that the delay in furnishing audit reports was due to receiving them from the Registrar of Co-operative Societies after the specified dates. However, the explanation was deemed inadequate as the reports were filed along with the return of income, not meeting the requirements of sec. 44AB. The Tribunal found the explanation untenable, citing precedents where similar pleas were rejected by the High Court. The argument that audit reports were available with the AO during assessments was dismissed as irrelevant to the non-furnishing of reports in time.

Validity of Penalty Notices:
An additional plea regarding the validity of the notice u/s. 271B for AY 2012-2013 was raised, questioning its timing. The Tribunal found no restriction on the timing of such notices and noted that the notices were issued within a reasonable time of concluding the assessment proceedings for both years.

Conclusion:
The Tribunal found the assessee's case without merit and declined interference, ultimately dismissing the appeals. The stay petitions were also dismissed as the appeals were decided. The order was pronounced on June 12, 2023, under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963.

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