PWD IRRIGATION AND LSGD EMPLYEES COOPERATIVE SOCIETY LTD NO. T 638,TRIVANDRUM V. INCOME TAX OFFICER, WARD 2(1), TRIVANDRUM

ITA 847/COCH/2024

AI Insights

The case involves appeals by the PWD Irrigation LSGD Employees Co-op. Society Ltd. against the penalties levied by the Income Tax Officer for not furnishing audited financial statements within the due date as specified under section 44AB of the Income Tax Act, 1961. The penalties were confirmed by the National Faceless Appeal Centre, Delhi, which led to the society appealing to the Income Tax Appellate Tribunal. The society argued that the delay was due to the time taken to get the accounts audited under the Kerala Co-operative Societies Act. The Tribunal, referencing a similar case adjudicated by the Kerala High Court, found in favor of the society, leading to the deletion of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38573 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Chavakkad Service Co-op. Bank Ltd. [2024] 169 taxmann.com 45 (Kerala)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Keywords: Reasonable cause
• Section: 44AB; 271B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI KESHAV DUBEY, JM ITA Nos. 824 & 847/Coch/2024 Assessment Years: 2016-17 & 2017-18 PWD Irrigation LSGD Employees .......... Appellant Co-operative Society Ltd. Public Office Building, Vikas Bhavan Thiruvananthapuram 695033 [PAN: AADAP5163D] vs. The Income Tax Officer .......... Respondent Ward - 2(1), Thiruvananthapuram Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 17.02.2025 Date of Pronouncement: 18.03.2025 O R D E R Per: Inturi Rama Rao, AM These appeals filed by the assessee are directed against the orders of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 25.07.2024 & 07.08.2024 for Assessment Years (AYs) 2016-17 & 2017-18, respectively. 2. Since identical issues are involved in these appeals, those are heard together and disposed of vide this common order. For the sake of 2 ITA Nos. 824 & 847/Coch/2024 PWD Irrigation LSGD Employees Co-op. Society Ltd. convenience and clarity, the facts relevant to the appeal bearing ITA No. 824/Coch/2024 for AY 2016-17 are stated herein. The discussions and findings are equally applicable to the other appeal also. 3. The only issue raised by the assessee is that the learned CIT(A) erred in confirming the penalty levied by the Income Tax Officer, Ward- 2(1), Thiruvananthapuram (hereafter “the AO”) u/s 271B of the Income Tax Act, 1961 (the Act) amounting to Rs.1,50,000/-. 4. In the present case, the audited financial statements were not furnished by the assessee within the due date as specified u/s 44AB of the Act. Therefore, the AO levied penalty u/s 271B of the Act amounting to Rs. 1,50,000/- . 5. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 6. Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before us. 7. The learned A.R. before us submitted that the delay in getting the accounts audited under the Kerala co-operative Societies Act and consequently the tax audit report was furnished belatedly was on account of the delay in getting the accounts audited and obtaining the audit certificate under the Kerala Cooperative Societies Act. Thus, it was pleaded by the learned counsel for the assessee that there was sufficient cause for the delay in getting the account audited and consequently furnishing the audit report belatedly. As such the learned A.R. prayed for wavier of the penalty under the provisions of section 271B of the Act. 3 ITA Nos. 824 & 847/Coch/2024 PWD Irrigation LSGD Employees Co-op. Society Ltd. 8. On the other hand, the learned Sr. DR vehemently supported the orders of the authorities below. 9. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset, we note that the Hon'ble Jurisdictional High Court in the case of Chavakkad Service Co-op. Bank Ltd. [2024] 169 taxmann.com 45 (Kerala) has observed as under: - “Where assessee co-operative societies did not file audit report as mandated under section 44AB within time limit specified thereunder, however, audit reports were made available before Assessing Authority at time of finalization of assessments, since delay in obtaining audit reports from statutory auditors under Kerala Co-operative Societies Act and Rules could be seen as a reasonable cause for delayed submission of audit reports, no penalty under section 271B was to be imposed on assessee.” 10. The facts of the case on hand are identical as discussed above. Thus, respectfully following the same, we delete the penalty imposed by the Revenue. 11. In the result, appeals filed by the assessee are allowed. Order pronounced in the open court on 18th March, 2025. Sd/- Sd/- (KESHAV DUBEY) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 18th March, 2025 n.p. 4 ITA Nos. 824 & 847/Coch/2024 PWD Irrigation LSGD Employees Co-op. Society Ltd. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "