Hatkangangle Shirol Taluka Apanganchi Aoudyogik Utpadak Sah. Sanstha Ltd., Kolhapur V. Income-tax Officer,

ITA 13/PUN/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8554 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 03-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS.13 TO 16/PN/2014 (ASSESSMENT YEARS : 2003-04 TO 2006-07) HATKANANGLE SHIROL TALUKA APANGANCHI AOUDYOGIK UTPADAK SAH. SANSTHA LTD., GALA NO.5, PRATIK PLAZA KOLHAPUR ROAD, ICHALKARANJI, DIST. KOLHAPUR. PAN : AAAAH0852N . APPELLANT VS. INCOME TAX OFFICER, WARD 1 (1), KOLHAPUR. . RESPONDENT ASSESSEE BY : MR. C. H. NANIWADEKAR DEPARTMENT BY : MR. RAJESH DAMOR DATE OF HEARING : 16-12-2014 DATE OF PRONOUNCEMENT : 29-12-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEALS RELATE TO THE SAME ASSESSEE A ND INVOLVE A COMMON ISSUE, THEREFORE, THE APPEALS HAVE BEEN CLUB BED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SA KE OF CONVENIENCE AND BREVITY. 2. ALL THE CAPTIONED APPEALS BY THE ASSESSEE ARE DI RECTED AGAINST A COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS), KOLHAPUR DATED 11.10.2013 WHICH, IN TURN, HAS ARISEN FROM RESPECTI VE ORDERS DATED 26.06.2009 PASSED BY THE ASSESSING OFFICER U/S 271B OF THE INC OME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEARS 2003- 04 TO 2006-07. 3. IN ALL THESE APPEALS, THE SOLITARY DISPUTE IS WI TH REGARD TO THE PENALTY LEVIED BY THE INCOME-TAX AUTHORITIES U/S 271B OF TH E ACT FOR DELAY IN FILING OF THE AUDIT REPORT PRESCRIBED IN SECTION 44AB OF THE ACT. ITA NOS.13 TO 16/PN/2014 4. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S A CO-OPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA CO-OPERATIVE SOCIE TIES ACT, 1960. THE SOCIETY IS INCORPORATED FOR THE WELFARE OF HANDICAP PED PERSONS, WHO ARE MEMBERS OF THE SOCIETY. THE SOCIETY HAS BEEN ALLOT TED A DEALERSHIP OF HINDUSTAN PETROLEUM CORPORATION AND CARRIES ON ITS ACTIVITIES ACCORDINGLY. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, ASSESSEE DID NOT FILE ANY RETURNS OF INCOME UNDER THE NORMAL PROVISIONS OF THE ACT BUT T HE RETURNS WERE FILED IN RESPONSE TO THE NOTICES ISSUED BY THE ASSESSING OFF ICER U/S 148 OF THE ACT. IN RESPONSE, ASSESSEE FILED RETURNS OF INCOME, WHICH W AS ACCOMPANIED BY THE RESPECTIVE AUDIT REPORTS U/S 44AB OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE AUDIT REPORTS U/S 44AB OF THE ACT WERE NOT FILED WITHIN THE PRESCRIBED PERIOD AND THEREFORE ASSESSEE WAS LIABLE FOR PENALT Y U/S 271B OF THE ACT. 5. IT WAS EXPLAINED BY THE ASSESSEE THAT THERE WAS A REASONABLE CAUSE FOR NOT COMPLYING WITH THE PRESCRIBED PERIOD OF FILING OF THE AUDIT REPORT U/S 44AB OF THE ACT. ONE OF THE POINTS RAISED BY THE ASSESS EE WAS THAT IT WAS A NON- PROFIT-MAKING ORGANIZATION AND WAS COMPRISING OF HA NDICAPPED PERSONS, WHO WERE NOT WELL-AWARE OF THE INCOME-TAX PROVISIONS. APART THEREFROM, IT WAS POINTED OUT THAT THE STATUTORY AUDIT OF THE SOCIETY WAS REQUIRED TO BE CARRIED OUT BY THE REGISTRAR OF CO-OPERATIVE SOCIETY IN TERMS O F THE MAHARASHTRA CO- OPERATIVE SOCIETIES ACT, 1960. IT WAS EXPLAINED TH AT NO SUCH AUDIT WAS CARRIED OUT INASMUCH AS THE DISTRICT DEPUTY REGISTRAR OF CO -OPERATIVE SOCIETIES DID NOT APPOINT ANY AUDITOR TO AUDIT THE ACCOUNTS OF THE AS SESSEE. AS THE AUDIT UNDER THE CO-OPERATIVE SOCIETIES ACT WAS NOT DONE, ASSESS EE WAS UNDER A BONAFIDE BELIEF THAT AUDIT UNDER THE PROVISIONS OF SECTION 4 4AB OF THE ACT ALSO COULD NOT BE DONE. THE AFORESAID BELIEF OF THE ASSESSEE HAS NOT BEEN FOUND TO BE A REASONABLE CAUSE BY THE LOWER AUTHORITIES SO AS TO MITIGATE THE RIGOROUS OF PENALTY U/S 271B OF THE ACT. ITA NOS.13 TO 16/PN/2014 6. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND R ELIED UPON THE FOLLOWING DECISIONS TO SAY THAT THE ASSESSEE HAD A REASONABLE GROUND FOR NOT COMPLYING WITH THE REQUIREMENTS OF FURNISHING THE AUDIT REPOR T U/S 44AB OF THE ACT WITHIN THE PRESCRIBED PERIOD :- 1. RAJASTHAN CO-OPERATIVE DAIRY FEDERATION LTD. VS . DCIT (2003) 259 ITR 126 (RAJ); 2. THANJAVUR SILK HANDLOOM WEAVERS CO-OP. PRODUCTIO N & SALES SOC. LTD. VS. UNION OF INDIA & ORS., (2003) 263 ITR 334 (MAD); 3. CIT VS. UP CO-OP. CANE UNION FEDERATION LTD., (2 005) 199 CTR 175 (ALL); 4. CIT VS. MATHANA MODEL CO-OP. CREDIT & SERVICE SO CIETY LTD., (2008) 299 ITR 70 (P&H); 5. CIT & ANOTHER VS. IQBALPUR CO-OP. CANE DEVELOPME NT UNION LTD., (2013) 356 ITR 343 (UTTARAKHAND); AND, 6. SOLAPUR ZILLA VINKAR SAHAKARI FEDERATION NIYAMIT VS. DCIT, (1999) 63 TTJ 482 (PUNE). 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE CASE OF THE REVENUE. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. ADMITTEDLY, IN THE PRESENT CASE, ASSESSEE IS A CO-OPERATIVE SOCIETY AN D ITS ACCOUNTS ARE STATUTORILY REQUIRED TO BE AUDITED BY THE AUDITOR A PPOINTED BY THE REGISTRAR, CO-OPERATIVE SOCIETY. IT IS ALSO AN ADMITTED POSIT ION THAT THE AUTHORITIES GOVERNING THE CO-OPERATIVE SOCIETIES ACT, 1960 DID NOT APPOINT SUCH AUDITOR IN THE CASE OF THE ASSESSEE EVEN AT THE TIME WHEN ASSE SSEE WAS CALLED UPON TO FILE ITS RETURNS OF INCOME BY THE ASSESSING OFFICER IN PURSUANCE TO NOTICES ISSUED U/S 147/148 OF THE ACT FOR THE CAPTIONED ASS ESSMENT YEARS. IN THIS BACKGROUND, ASSESSEE EXPLAINED THAT AT THE STAGE OF FILING THE RETURNS OF INCOME, ASSESSEE OBTAINED THE RESPECTIVE AUDIT REPO RTS U/S 44AB OF THE ACT AND FURNISHED THE SAME ALONG WITH RETURNS OF INCOME . THE DELAY IN AUDITING OF ITA NOS.13 TO 16/PN/2014 ACCOUNTS BY THE AUDITOR APPOINTED BY THE REGISTRAR, CO-OPERATIVE SOCIETY WAS CANVASSED AS A REASON FOR THE DELAY ON THE PLEA THA T THE AUDIT REPORT U/S 44AB OF THE ACT COULD ONLY BE OBTAINED AFTER APPOIN TING OF SUCH AUDITOR BY THE REGISTRAR, CO-OPERATIVE SOCIETY. IN OUR CONSIDERED OPINION, THE AFORESAID PLEA IS A BONAFIDE BELIEF, AND CAN BE ACCEPTED AS A REAS ONABLE CAUSE WHICH PREVENTED THE ASSESSEE FROM COMPLYING WITH THE REQU IREMENTS OF OBTAINING AND FURNISHING THE AUDIT REPORT U/S 44AB OF THE ACT WITHIN THE STIPULATED PERIOD. IN SIMILAR CIRCUMSTANCES, THE HONBLE RAJA STHAN HIGH COURT IN THE CASE OF RAJASTHAN CO-OPERATIVE DAIRY FEDERATION LTD . VS. DCIT, (2003) 259 ITR 126 (RAJ.) HAS ALSO FOUND IT FIT TO DELETE THE PENALTY LEVIED U/S 271B OF THE ACT. FOLLOWING THE RATIO OF THE DECISION OF THE HO NBLE RAJASTHAN HIGH COURT, THE PENALTY LEVIED BY THE LOWER AUTHORITIES U/S 271 B OF THE ACT IN THE CAPTIONED YEARS IS HEREBY DIRECTED TO BE DELETED. WE HOLD SO . 9. IN THE RESULT, ALL THE FOUR CAPTIONED APPEALS OF THE ASSESSEE ARE ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 29 TH DECEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE