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TMI Blog2011 (7) TMI 1248X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act, 1961 (In short "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 assessees are in appeals against the separate orders of the ld.CIT(A)-II, Lucknow dated 21.12.2010 before the Tribunal. 3. Briefly stated, the facts of the case are that the assesses are Cooperative Societies registered under the U.P.Co-operative Societies Registration Act and engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such no loss has been caused to the Revenue by such default under section 44AB of the Act. Shri J.N.Shukla, learned Counsel for the assessees also submitted that the assesses are semi- Government bodies and their Secretaries are also Government Officers and as such a Government Department and levy of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on record. Section 273B of the Act provides that penalty not to be imposed in certain cases. This Section further provides that notwithstanding anything contained in the provisions of Section 271B of the Act, no penalty shall be imposable on the person or assessee, as the case may be, for any failure referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncelled. 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 failed to get done within the time prescribed under the Act. When notices were issued to the assessee before the penalty is imposed, under Section 271B of the Act, the assessee pleaded that it was under the bona fide belief that it was not required to get the report submitted as the income of the assessee was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion 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 any sufficient reason to interfere with the satisfaction recorded by the Tribunal as to the finding of fact that the assessee had no intention to cause any loss to the Revenue and as such, the penalty was not necessarily required to be imposed by the AO. Agreeing with the view of the Tribunal, we hold that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Ltd. (supra) is squarely applicable to the facts of the present cases. 6.4 Viewed from any angle, we hold that no penalty under Section 271B of the Act is imposable in the instant cases. 6.5 In view of the above, we cancel the impugned penalties and consequently all the appeals succeed. 7. In the result, all the five ..... X X X X Extracts X X X X X X X X Extracts X X X X
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