Tribunal cancels penalty due to audit delay, citing reasonable cause.

The Tribunal allowed the appeal, canceling the penalty of Rs. 62,370/- imposed under section 271B. It found that the delay in obtaining the audit report, caused by the late appointment of the statutory auditor by the Registrar of Cooperative Societies, constituted a reasonable cause. The Tribunal determined that the delay was beyond the appellant's control, similar to a previous case, and therefore, the penalty was deleted.

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Issues Involved:
1. Ex-parte order by CIT (Appeals)
2. Penalty u/s 271B confirmation
3. Delay in filing appeal

Summary:

1. Ex-parte order by CIT (Appeals):
The appellant contended that the CIT (Appeals), NFAC, Delhi erred in passing an ex-parte order without considering the explanation mentioned in the penalty order by the AO. The appellant, a primary agricultural crop society located in a remote village, claimed that notices did not come to their knowledge, preventing attendance at the proceedings.

2. Penalty u/s 271B confirmation:
The CIT (Appeals) confirmed the penalty of Rs. 62,370/- levied u/s 271B by the AO. The appellant argued that the delay in obtaining the audit report was due to the statutory auditor not being appointed timely by the Registrar of Cooperative Society, which was beyond their control. They cited reasonable cause u/s 273B for the delay and requested the penalty be canceled.

3. Delay in filing appeal:
The appeal was time-barred by 24 days. The appellant explained that due to their remote location and lack of knowledge in taxation law, they were unaware of the order uploaded on the portal. The delay was attributed to the society's involvement in various activities and the less educated staff. The Tribunal found sufficient cause for the delay and condoned it, admitting the appeal for adjudication.

Judgment:
The Tribunal referenced the case of Gramin Sewa Sahakari Samiti Maryadit v. ITO-1(2), Raipur, where it was held that delay in obtaining the audit report due to the statutory auditor's late appointment by the Registrar of Cooperative Societies constituted a reasonable cause. The Tribunal noted that similar circumstances applied to the present case, where the statutory audit was completed after the due date, and the tax auditor was appointed late. The Tribunal concluded that the delay was beyond the appellant's control and that the penalty u/s 271B should be deleted. The appeal was allowed, and the penalty was canceled.

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