Reasonable cause for delayed statutory audit excused late tax-audit reports, resulting in deletion of penalties

Reasonable cause arising from a delayed statutory audit under the Kerala co-operative societies law excused the belated furnishing of tax-audit reports. As the statutory audit certificate delay caused the tax-audit delay, and the audit reports were available to the assessing authority when assessments were finalised, the applicable jurisdictional precedent supported non-levy of penalty. The penalties imposed for both assessment years were deleted.

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Issues: Whether penalty for belated furnishing of the tax-audit report was leviable where the delay resulted from delayed statutory audit under the Kerala co-operative societies law.

Analysis: The delay in obtaining the statutory audit certificate caused the delayed tax audit. This constituted reasonable cause, and the audit reports were available to the assessing authority when assessments were finalised. The applicable jurisdictional precedent was followed.

Conclusion: Penalty was not leviable; the penalties imposed for both assessment years were deleted.

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