Reasonable cause for delayed tax audit report filing can shield a co-operative society from penalty under section 271B.

Penalty under section 271B was stated to be inapplicable where the tax audit report was filed late because the statutory audit process under the Kerala Co-operative Societies Act and Rules was delayed. The note treats the facts as materially similar to binding jurisdictional precedent and applies section 273B, under which reasonable cause protects the assessee from penalty. On that basis, the delay in obtaining audit approval was regarded as sufficient cause and the penalty under section 271B was deleted in favour of the assessee.

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Issues: Whether penalty under section 271B of the Income-tax Act, 1961 was exigible where the tax audit report was furnished belatedly due to delay in obtaining audit approval under the Kerala Co-operative Societies Act and Rules, and whether such delay constituted reasonable cause under section 273B.

Analysis: The assessee's delay in furnishing the audit report was linked to the delay in completing the statutory audit process under the Kerala Co-operative Societies Act and Rules. The facts were treated as materially similar to the binding jurisdictional precedent where delayed submission of the audit report was held to be covered by reasonable cause, attracting the protection of section 273B and excluding penalty under section 271B.

Conclusion: The penalty under section 271B was deleted in favour of the assessee.

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