3148 KANAKKAMPALAYAM PRIMARY AGRICULTURUAL COOPERATIVE CREDIT SOCIETY,TIRUPUR V. THE INCOME TAX OFFICER, WARD 1(4) TIRUPUR, TIRUPUR

ITA 1187/CHNY/2025

AI Insights

The case involves the 3148 Kanakkampalayam Primary Agricultural Cooperative Credit Society, which appealed against a penalty imposed by the Income Tax Officer for failing to get their accounts audited within the statutory deadline as prescribed under section 44AB of the Income-tax Act, 1961. The assessee argued that the delay was due to the audit process and report issuance being dependent on the statutory Auditor appointed by the Tamil Nadu Co-operative Department. The Tribunal considered the circumstances and the precedent set in a similar case, ultimately deciding in favor of the assessee by cancelling the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669486 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Other Referred Cases: Kanakkampalayam PACCS vs. ITO (ITA No. 3148/Chny/2022)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR
• Assessee Lawyers: A. VIJAYALAKSHMI; C.A
• Keywords: Reasonable cause
• Section: 143(3)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘डी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0019ी यस यस िव ने रिव, \u0011ा ियक सद एवं \u0019ी जगदीश, लेखा सद क े सम( BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1187/Chny/2025 िनधा :रण वष: /Assessment Year: 2018-19 3148 Kanakkampalayam Primary Agricultural Cooperative Credit Society, Kanakkampalayam Post, Perumanallur Via., Tiruppur – 641 666. [PAN: AAAAZ 2945G] Vs. The Income Tax Officer, Ward-1(4), Tirupur. (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थG की ओर से/ Appellant by : Shri A. Vijayalakshmi, C.A IJथG की ओर से /Respondent by : Shri Vijay Kumar, JCIT सुनवा ई की ता रीख/Date of Hearing : 17.06.2025 घोषणा की ता रीख /Date of Pronouncement : 26.06.2025 आदेश / O R D E R PER JAGADISH, A.M: Aforesaid appeal filed by the assessee for Assessment Year (A.Y) 2018-19 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 27.02.2025 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s 143(3A) & 143(3B) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 18.03.2021. ITA No.1187/Chny/2025 3148 Kanakkampalaym PACCS :- 2 -: 2. The assessee is a co-operative society registered under Tamil Nadu Co-operative Societies Act and filed its return of income on 09.03.2019 declaring total income at Nil. During assessment proceedings, the A.O levied penalty u/s.271B of the Act for failure to get accounts audited within the time prescribed u/s. 44AB of the Act. On appeal, the Ld. CIT(A) rejected the explanation of the assessee holding that the delay in obtaining the statutory audit report could not be considered a reasonable cause, as the completion of the audit and the receipt of the statutory report were not beyond the control of the assessee. Consequently, the Ld. CIT(A) confirmed the penalty levied u/s. 271B of the Act. 3. Before us, the Ld. Authorized Representative (AR) of the assessee submitted that the statutory Auditor is appointed by the Tamil Nadu Co-operative Department, and the assessee has no authority to independently appoint an Auditor or expedite the process of obtaining the audit report. The Ld. A.R further stated that the statutory audit was conducted in October 2018, and after necessary approvals, the report was released by the Assistant Director of Co- operative Audit in February 2019. Upon receipt of the report, the ITA No.1187/Chny/2025 3148 Kanakkampalaym PACCS :- 3 -: assessee promptly filed the same. It was, therefore, submitted that there was a reasonable cause for the delay, and reliance was placed on the decision of the ITAT, Chennai in the case of Kanakkampalayam PACCS vs. ITO (ITA No. 3148/Chny/2022) dated 12.04.2023. 4. On the other hand, the Ld. Departmental Representative (DR), relied on the orders of lower authorities and submitted that penalty was rightly levied as the assessee failed to comply with statutory timelines 5. We have heard the rival submissions and perused the materials available on record. The A.O levied the penalty u/s. 271B of the Act for failure to get accounts audited within the time prescribed u/s. 44AB of the Act. However, assessee has offered explanation which appears bonafide, as the audit process and report issuance were dependent on the functioning and timeline of the statutory Auditor appointed by the Co-operative Department in which assessee had no control. Considering the facts and circumstances of the case, and in light of the decision of the coordinate bench, in the cases relied upon by the assessee, supra, we are of the considered view that there was ITA No.1187/Chny/2025 3148 Kanakkampalaym PACCS :- 4 -: reasonable cause for the delay in obtaining the audit report. Hence, the penalty levied u/s. 271B of the Act is hereby cancelled. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on 26th day of June, 2025 at Chennai. Sd/- Sd/- (यस यस िव ने रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 26th June, 2025. EDN/- आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "