TMI Blog2011 (7) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act ) for the following assessment years : Appeal No. Penalty Assessment year ITA No.166(LKW)/2011 Rs.25,928 2006-07 ITA No.167(LKW)/2011 Rs.30,614 2006-07 ITA No.168(LKW)/2011 Rs.46,660 2007-08 ITA No.169(LKW)/2011 Rs.28,825 2007-08 ITA No.170(LKW)/2011 Rs.24,309 2007-08 2.1 The ld.CIT(A) upheld the orders of the AO in imposing the above penalties under Section 271B of the Act and hence the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was reasonable cause for the said failure. Shri J.N.Shukla, learned Counsel for the assesses vehemently argued that the assesses were prevented by a reasonable cause from not complying with the provisions of Section 44AB of the Act. In this regard, Shri J.N.Shukla, learned Counsel for the assessees submitted that the assesses did not file the audit reports, which were required under Section 44AB of the Act as the assesses were under the presumption and bona fide belief that the total income of the assessees was 100% deductable under Section 80P of the Act and hence the assesses, in good faith, did not file the same. He further submitted that non-filing of the above-mentioned report is non-deliberated and unintentional and as suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in on similar set of facts, the Hon'ble High Court of Uttarakhand has confirmed the order of the Tribunal in cancelling the penalty levied under section 271B of the Act. In view of the above, Shri J.N.Shukla, learned Counsel for the assesses submitted that the impugned penalties may be cancelled. 5. Shri P.K.Bajaj, ld.Sr.D.R. argued that since the assesses admittedly failed to submit the audit report within the due date, as such, the action of the AO in imposing the penalties under Section 271B of the Act cannot be held to be illegal or otherwise. Shri P.K.Bajaj, ld.Sr.D.R. submitted that the impugned orders passed by the ld.CIT(A) may be upheld. 6. We have heard the rival submissions and have also perused the materials available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point out that there is no material on record to controvert the above contention of the assessees. In that view of the matter, it can safely be held that the assessees were prevented by a reasonable cause for the failure under Section 44AB of the Act. On this score alone, impugned penalties deserve to be cancelled. 6.1 Shri J.N.Shukla, learned Counsel for the assesses also cited a decision of the Hon'ble High Court of Uttarakhand in the case of CIT vs. Iqbalpur Co-operative Cane Development Union Ltd.(2009) 179 Taxman 27. In the said case, the assessee was a co-operative society and its income was deductable under Section 80P of the Act. The assessee was required under section 44AB of the Act to get its accounts audited, which it fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-submission of audit report under s. 44AB or not on or before due date. AO to Impose penalty under s. 271B of the Act for non-submission of audit report under s. 44AB or not on or before due date. 6. Considering all the facts and circumstances of the case, we are of the view that since there appears no Intention on the part of the assessee as found by the Tribunal to conceal the Income or to deprive the Government of revenue, as there Is no tax payable on the Income of the assessee, in view of the provisions of s. 8OP of IT Act, 1961, we are of the view that It was not necessary for the AO to Impose penalty under s. 271B of the Act. On going through the impugned order passed by the Tribunal, In the above circumstances, we do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was brought to our notice by the Department. In view of the above decision of the Hon'ble High Court of Uttarkhand in the case of Iqbalpur Co-operative Cane Development Union Ltd. (supra) also, no penalty under section 271B of the Act is leviable in the instant cases. 6.3 In view of the above, we hold that the assesses have proved that there was reasonable cause for not complying with the provisions of Section 44AB of the Act. In other words, the assesses were prevented by a reasonable cause for the failure envisaged in section 44AB of the Act. On second count also, no penalty under section 271B is leviable because the decision of the Hon'ble High Court of Uttarakhand in the case of Iqbalpur Co-operative Cane Development Union L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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