PUDUPAPADI SEVICE CO-OPERATIVE BANK LTD,KOZHIKODE V. ITO, WARD 2(3), KOZHIKODE

ITA 1156/COCH/2024

AI Insights

The case involves Puduppadi Service Co-operative Bank Limited appealing against the penalty levied under section 271B of the Income Tax Act by the AO for not getting their accounts audited in time, as their turnover exceeded the prescribed limit under section 44AB. The CIT(A) upheld the AO's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal noted the absence of specific details regarding the audit date by the prescribed authority and restored the matter to the AO for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361073 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: PCIT v. Peroorkada Service Co-operative Bank Ltd. (2022) 442 ITR 141 (Ker)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: RAGHUNATHAN P
• Keywords: Opportunity of being heard

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.1156/Coch/2024 : Asst.Year 2017-2018 ITA No.1157/Coch/2024 : Asst.Year 2022-2023 Puduppadi Service Co-operative Bank Limited No.F-1830 Nooramthode, Kodencheri Kozhikode – 673 586 PAN : AACAP4392H. v. The Income Tax Officer Ward 2 (3) Kozhikode. (Appellant) (Respondent) Appellant by : Sri.Raghunathan P, Advocate Respondent by : Smt.Leena Lal, Sr.AR Date of Hearing : 19.05.2025. Date of Pronouncement : 20.05.2025 O R D E R Per Prakash Chand Yadav, JM : Both these appeals of the assessee are arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 29th October, 2024, and relates to the assessment years 2017- 2018 and 2022-2023. 2. In both these cases, the assessee has aggrieved by the order of the AO levying penalty u/s.271B of the Act. 3. The brief facts as coming out of the orders of the authorities below are that the assessee is a primary agricultural credit society, filed its return of income for the ITA Nos.1156-1157/Coch/2024. Puduppadi SCB Limited. 2 assessment year 2017-2018 on 06.11.2017 after claiming deduction u/s.80P of the Act. During the course of assessment proceedings, the AO observed that the turnover of the assessee exceeds the limit prescribed u/s.44AB of the Act. The AO further observed that the assessee has failed to get audit of its accounts and hence liable for penalty u/s.271B of the Act. 4. Aggrieved with the order of the AO, the assessee filed an appeal before the ld.CIT(A) and assailed the order of the AO levying penalty u/s.271B of the Act. However, the ld.CIT(A) could not find any force in the arguments of the assessee and affirmed the order of the AO. 5. Aggrieved with the order of the CIT(A), the assessee has come up in appeal before us and argued that since there was procedural delay vis-à-vis audit of account carried out by the Registrar in terms of provisions of sec.64 of the Kerala Co- operative Societies Act, the assessee could not be able to get the audit of its account in time and hence there was sufficient cause for delay. 6. The learned DR relied upon the orders of the authorities below. 7. We have heard the rival submissions and perused the material available on record. The learned Counsel for the assessee when asked by the Bench about the specific date on which the prescribed authority has finalized the audit of the assessee society, the learned Counsel for the assessee could ITA Nos.1156-1157/Coch/2024. Puduppadi SCB Limited. 3 not be able to give any reply. However, it is settled position of law that if there is a bonafide reason/ sufficient cause for belated audit of accounts, then penalty u/s.271B of the Act cannot be levied. Reference can be made in the judgment of the Hon’ble jurisdictional High Court in the case of PCIT v. Peroorkada Service Co-operative Bank Ltd. (2022) 442 ITR 141 (Ker). However, in this case, certain facts such as date of audit by the prescribed authority are not clear. Therefore, we restore this matter to the file of the AO with a direction to see the exact date of the audit conducted by the authority as per the provisions of section 64 of the Kerala State Co-operative Societies Act. Needless to say, the AO shall afford meaningful opportunity of being heard to the assessee before passing any order. 8. Our observation made in the above order would mutatis mutandis applied to the ITA No.1157/Coch/2024 for assessment year 2022-2023. 9. In the result, the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on this 20th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 20th May, 2025. Devadas G* ITA Nos.1156-1157/Coch/2024. Puduppadi SCB Limited. 4 Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "