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2024 (3) TMI 430 - ITAT COCHINLevy of penalty u/s 271B - Delay in filing of Tax Audit report u/s. 44AB - delay was due to the late receipt of the audit report from the Joint Registrar (Kerala Co-operative Societies). - HELD THAT:- It needs to be appreciated that as against obtaining a tax audit report, or indeed a statutory audit report, as under the Companies Act, which are to be from independent auditors, who could be pursued in the matter, and are obliged by law to limit the number of auditees, a cooperative society under the Kerala Act is by law obliged to get it’s accounts audited only from the specified Authority thereunder, who is to conduct the annual audit of accounts of all such societies and, further, within the time limit prescribed under the Act. Once therefore the assessee has done all it could within it’s means in the facts and circumstance of it’s case, visiting it with penalty – which cannot be a result of a mechanical exercise, defeating the purpose and intent of s. 273B, would be unfair. In this view of the matter, we think that the assessee’s case qualifies for non-imposition of the impugned penalty. We may though clarify that we are not in agreement with the assessee that the default u/s. 44AB, which attracts penalty u/s. 271B, is a technical or venial breach of law, particularly where the audit reports are furnished during the course of the assessment proceedings, which plea the assessee also banks on with reference to some case law. This aspect stands considered in detail per several decisions by this Bench of the Tribunal. Besides, the decision in Peroorkada SCB Ltd. v. ITO [2020 (1) TMI 624 - KERALA HIGH COURT], binding on us, would allay all doubts in the matter. In the facts of that case, the assessee, who had furnished only the audit report from the Jt. Registrar, contended, on that basis, sufficient compliance of s. 44AB. The same did not find approval of the Hon’ble Court, which held that only furnishing both the reports, as mandated by the provision, would be in sufficient compliance of the law. To conclude, the assessee has been able to reasonably demonstrate existence of a reasonable cause for the two-month delay attending the compliance of the provisions of s. 44AB. The Revenue has, in our view, acted mechanically inasmuch as there is nothing to suggest that the assessee’s conduct is, as claimed, not bona fide. The impugned penalty is accordingly directed for deletion - Decided in favour of assessee.
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