Arambagh Co-Operative Marketing Society Ltd., Kolkata V. ACIT, CIR-1, HOOGHLY, Hooghly

ITA 75/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1549 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 18-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V N PUROHIT; V N PUROHIT FCA LD
• Keywords: Reasonable cause
• Section: 44AB; 271B

Judgement Text

1 ITA NO. 75/KOL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JU DICIAL MEMBER I.T.A NO. 75/KOL /2016 A.Y: 2010- 11 ARAMBAGH CO-OP VS. ACIT, CIR-1, HOOGHLY MARKETING SOCIETY LTD. PAN: AABAA0801B [APPELLANT] [RESPONDENT] FOR THE APPELLANT : SHRI V.N PURO HIT, FCA, LD.AR FOR THE RESPONDENT : SHRI SALLONG YAD EN, ADDL.CIT, LD.SR.DR DATE OF HEARING : 07-09-2017 DATE OF PRONOUNCEMENT : 13-09-2017 ORDER SHRI S.S VISWANETHRA RAVI, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DT. 09-12-2015 PASSED BY CIT(A), 6, KOLKATA FOR THE A.Y 2010-11. 2. THE ONLY GROUND IS TO BE DECIDED IS AS TO WHETHE R THE CIT-A JUSTIFIED IN CONFIRMING THE PENALTY AS IMPOSED BY T HE AO U/SEC 271B OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CA SE. 3. THE ASSESSEE IS A CO-OPERATIVE SOCIETY. THE TAX AUDIT REPORT AS REQUIRED BY THE PROVISIONS OF SECTION 44AB OF TH E ACT WAS FILED BY IT ALONG WITH ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 16-12-2010 AS AGAINST THE SPECIFIED DATE OF 30-09-2 010. THE ASSESSING OFFICER, THEREFORE, INITIATED PENALTY PRO CEEDINGS UNDER SECTION 271B OF THE ACT. IN REPLY TO THE SHOW-CAUSE NOTICE ISSUED DURING THE COURSE OF SAID PROCEEDINGS, IT WAS EXPLA INED THAT THE ASSESSEE WAS IGNORANT ABOUT INCOME TAX LAW AND RULE S THEREWITH AND NOT AWARE THAT PENALTY WOULD BE ATTRACTED FOR NON-S UBMISSION OF TAR 2 ITA NO. 75/KOL/2016 [TAX AUDIT REPORT] AND URGED TO DROP THE PENALTY PR OCEEDINGS INITIATED U/S. 271B OF THE ACT. THIS EXPLANATION O F THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER. THE A.O HELD THAT THE ASSESSEE-SOCIETY COULD HAVE APPOINTED THE TAX AUDIT OR AND COULD HAVE GOT THE TAX AUDIT DONE INDEPENDENTLY MUCH BEFO RE THE SPECIFIED DATE 30-09-2010 AND THE DELAY IN APPOINTMENT OF STA TUTORY AUDITORS UNDER THE COOPERATIVE ACT HAD NO RELEVANCE WITH IN COME TAX LAW. HE REJECTED THE EXPLANATION OF THE ASSESSEE ON ITS FA ILURE TO OBTAIN AND FURNISH THE TAX AUDIT REPORT BY THE SPECIFIED DATE. HE, THEREFORE, PROCEEDED TO IMPOSE THE PENALTY OF RS.1,00,000/- U/ S. 271B OF THE ACT. 4. THE PENALTY IMPOSED BY THE ASSESSING OFFICER UND ER SECTION 271B OF THE ACT WAS CHALLENGED BY THE ASSESSEE IN T HE APPEAL BEFORE THE CIT(A). THE ASSESSEE CONTENDED THAT THE STATUTO RY AUDITORS WERE APPOINTED BY THE COOPERATIVE DEPARTMENT OF GOVT. OF WEST BENGAL TO CONDUCT STATUTORY AUDIT AND COULD COMPLETE THEIR AU DIT ONLY ON 30-08- 2010. IT WAS SUBMITTED THAT THE ASSESSEE-SOCIETY TH EREAFTER APPOINTED TAX AUDITOR, WHO IN TURN SUBMITTED HIS AU DIT REPORT ON 9- 11-2010, WHICH WAS FILED ON 16-12-2010 ALONG WITH T HE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IT WAS CO NTENDED THAT THERE WAS SUFFICIENT CAUSE FOR THE DELAY IN FILING THE TA X AUDIT REPORT BEFORE THE SPECIFIED DATE ON 30-09-2010 AND FAILURE TO FUR NISH THE SAME WITHIN THE DUE DATE IS NOT INTENTIONAL AND WAS BEY OND ITS CONTROL. THE CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SAME AND PROCEEDED TO CONFIRM THE PENALTY IMPOSED BY THE ASSESSING OFFICE R FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH 3.4 OF HIS IMPUGNED ORDE R:- 3.4. IN THE PRESENT CASE THE APPELLANT HAS NOT BEE N ABLE TO PROVE THAT THERE WAS A REASONABLE CAUSE FOR FAILURE. THE EXPLANATION OFFER ED IS NOT ACCEPTABLE. IN VIEW OF THE ABOVE AND TAKING INTO CONSIDERATION THE COURT DECIS ION AS CITED ABOVE, IT IS HELD THAT THE A.O, HAD CORRECTLY IMPOSED THE PENALTY. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LD.A R RELIED ON THE 3 ITA NO. 75/KOL/2016 ORDER DT: 28-02-2017 OF A BENCH, KOLKATA TRIBUNAL IN ITA NOS. 804 & 805/KOL/2014 IN ASSESSEES OWN CASE FOR AYS 2008-09 & 2009-10 AND SUBMITTED THAT UNDER SIMILAR CIRCUMSTANCES THE PENA LTY LEVIED U/S. 271B WAS DELETED BY THE I.T.A.T. HE REITERATED THE ARGUMENTS TAKEN BEFORE THE LD.CIT(A). 6. THE LD. DR SUBMITTED THAT DURING THE COURSE OF H EARING THE AR OF THE ASSESSEE WAS ASKED TO PRODUCE ALL CORRESPOND ENCE MADE BY THE ASSESSEE WITH THE CO-OPERATIVE DEPARTMENT TO E NSURE THAT THE AUDIT IS DONE WITHIN THE SPECIFIED DATE. HOWEVER, T HE AR HAS BEEN UNABLE TO PROVIDE ANY CORRESPONDENCE OR OTHER EVIDE NCE TO SHOW THAT ANY EFFORT WAS MADE BY THE ASSESSEE TO ENSURE THAT THE CO-OPERATIVE DEPTT. APPOINTS AUDITORS IN TIME AND THAT THE AUDIT DONE BY THE SPECIFIED DATE. 7. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATER IAL AVAILABLE ON RECORD. AS RIGHTLY POINTED OUT BY THE LD. AR THA T THIS TRIBUNAL DECIDED THE IDENTICAL ISSUE BY HOLDING THAT THE DEL AY CAUSED IN OBTAINING AND FILING THE AUDIT REPORT WAS BEYOND TH E CONTROL OF ASSESSEE. THE RELEVANT PORTION AT PARA 9 OF SAID O RDER DT. 28-02- 2017 IS REPRODUCED HEREIN BELOW:- 9. IN THE PRESENT CASE ALSO THE ASSESSEE COULD NOT OBTAIN AND FILE THE TAX AUDIT REPORT AS REQUIRED U/S. 44AB OF THE ACT DUE TO DELA Y IN APPOINTMENT OF AUDITORS BY THE CO-OPERATIVE DEPARTMENT FOR STATUTORY AUDIT. THE AP POINTMENT IS NOT IN THE CONTROL OF THE ASSESSEE. IT IS ONLY THEN AFTER THAT THE ASSESSEE A PPOINTS TAX AUDITOR. THE ASSESSEE FILED THE TAX AUDIT REPORT IMMEDIATELY AFTER OBTAINING TH E SAME FROM ITS TAX AUDITOR IN FORM NO.3CA ON 14-09-2009. WE FIND THAT THE ISSUE ON HA ND IS SIMILAR TO THAT CASE DECIDED BY ORDER DATED 03-06-2016 BY THE COORDINATE BENCH OF THIS TRIBUNAL PASSED IN ITA NO.2396/KOL/2013 IN THE CASE OF SUPRA. FOLLOWING TH E SAME, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE TO IMPOSE THE PENALTY OF RS.1,00,000 /- U/S. 271B OF THE ACT. THEREFORE, WE CANCEL THE PENALTY IMPOSED BY THE AO AND CONFIRM ED BY THE CIT(A). THEREFORE, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. FOLLOWING THE SAME, WE ARE OF THE VIEW THAT IT I S NOT A FIT CASE TO IMPOSE THE PENALTY OF RS.1,00,000/- U/S. 271B OF THE ACT. THEREFORE, WE CANCEL THE PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE CIT(A). THEREFORE, GROUND RAISED BY THE ASSE SSEE IS ALLOWED. 4 ITA NO. 75/KOL/2016 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 75/KOL/2016 FOR A.Y 2010-11 IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 13-09-2017 DATE: 13 -09-2017 COPY OF THE ORDER FORWARDED TO:- 1. ARAMBAGH CO-OP AGRICULTURAL MARKETING SOCIETY LTD PO-ARAMBAGH, DIST-HOOGLY, WEST BENGAL-712601 PAN: AABAA0801B . APPELLANT 2. A.C.I.T CIRCLE-1, AYAKAR BHAVAN, KHADINAMORE, P.O. CHINSURAH , DIST-HOOGLY, WEST BENGAL-712101.. RESPONDENT 3. CIT-A-XXXVI 4. CIT,KOLKATA 5. DR 6. GUARD FILE TRUE COPY BY ORDER SR.PS/H.O.O ITAT KOLKATA SD/- P.M. JAGTAP ACCOUNTANT MEMBER SD/- S.S. VISWANETHRA RAVI J JUDICIAL MEMBER