THE NAMAKKAL COOPERATIVE HOUSING SOCIETY LIMITED, NAMAKKAL V. ITO, WARD-1 NAMAKKAL, NAMAKKAL

ITA 2182/CHNY/2024

AI Insights

The case involves M/s. The Namakkal Co-op. Housing Society Ltd., which appealed against the penalty imposed by the Income Tax Officer (ITO), Ward-1, Namakkal, for the belated filing of the Tax Audit Report (TAR) for the Assessment Year 2016-17. The assessee argued that the delay was due to the late receipt of the statutory audit report from the State's Co-operative Department, which was necessary to file the TAR. The Commissioner of Income Tax (Appeals) upheld the penalty, leading to the appeal before the Tribunal. The Tribunal, referencing a similar case decided by the Hon'ble Madras High Court, found in favor of the assessee, noting that the delay was not a deliberate act and thus, the penalty was not justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 106939 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: Thanjavur Silk Handloom Weavers Co-op. Production & Sales Society Ltd. v. UoI [2003] 263 ITR 334 (Madras)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G. SARATHA
• Assessee Lawyers: S.SENTHIL KUMAR
• Keywords: Reasonable cause

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी जगदीश, लेखा सद क े सम\u0015 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2182/Chny/2024 िनधा\u000eरणवष\u000e/Assessment Year: 2016-17 M/s.The Namakkal Co-op. Housing Society Ltd., 47/82, First Floor, Salem Road, Namakkal-637 001. v. The ITO, Ward-1, Namakkal. [PAN: AADAT 1640 D] (अपीलाथ\u0015/Appellant) (\u0016\u0017यथ\u0015/Respondent) अपीलाथ\u0015 क\u001a ओर से/ Appellant by : Mr.S. Senthil Kumar, \u0016\u0017यथ\u0015 क\u001a ओर से /Respondent by : Mrs.G. Saratha, Addl.CIT सुनवाईक\u001aतारीख/Date of Hearing : 21.11.2024 घोषणाक\u001aतारीख /Date of Pronouncement : 08.01.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter in short \"the Ld.CIT(A)”), Delhi, dated 11.06.2024 for the Assessment Year (hereinafter in short \"AY”) 2016-17. ITA No.2182/Chny/2024 (AY 2016-17) M/s.The Namakkal Co-op. Housing Society Ltd. :: 2 :: 2. At the outset, the Ld. Counsel for the assessee submitted that there is a delay of ‘9’ days in filing of this appeal and stated the reasons which prevented it from filing the appeal within the due-date. After hearing the Ld.AR and taking note of the reasons stated for delay in filing of appeal, we find that there is reasonable cause for delay in filing of appeal; so we are inclined to condone the delay of ‘9’ days and proceed to adjudicate the appeal on merits. 3. The main grievance of the assessee is against the action of the Ld.CIT(A) confirming the penalty u/s.271B of the Income Tax Act, 1961 (hereinafter in short \"the Act”) [belated filing of Audit Report]. 4. The brief facts are that the assessee is registered under the Tamil Nadu Cooperative Societies Act, which filed its return of income (RoI) on 23.03.2018 admitting ‘Nil’ income and claimed deduction u/s.80P of the Act to the tune of Rs.49,14,211/- which was accepted by the AO by passing assessment order on 28.12.2018. However, he levied penalty of Rs.1.50 lakhs u/s.271B of the Act for belated filing of Tax Audit Report (TAR). 5. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) and brought to his notice that the accounts of the assessee society had to be statutorily audited by the Co-operative Department of the State Government and since, there was delayed in getting the ibid statutory ITA No.2182/Chny/2024 (AY 2016-17) M/s.The Namakkal Co-op. Housing Society Ltd. :: 3 :: report, the assessee couldn’t file the Tax Audit Report within the due date before the Income Tax Authorities. However, the Ld.CIT(A) didn’t agree and confirmed the penalty imposed by the AO. 6. Aggrieved, the assessee is before us and cited the decision of the Hon’ble Madras High Court in the case of Thanjavur Silk Handloom Weavers Co-op. Production & Sales Society Ltd. v. UoI, reported in [2003] 263 ITR 334 (Madras), wherein according to Ld AR on identical facts, Hon’ble Madras High Court has cancelled the penalty. It would be gainful to reproduce the operating portion of the ibid High Court order, which is as under: 35. In the light of the said pronouncement of the apex court, on the facts of the case, the discretion exercised by the third respondent and as affirmed by the second respondent is an arbitrary exercise of power and it is not a just or reasonable exercise of power. Taking into consideration the object of the provision, the status of the petitioner being a co-operative society, it is being controlled by the authorities under the Tamil Nadu Co-operative Societies Act and it has to satisfy the requirements stipulated under the said Act, in the absence of any deliberate or willful omission on the part of the society, and taking into consideration the past conduct as well as the past treatment of such delay, as if it was taking for granted on either side, the levy of penalty is not a reasonable exercise of power by the third respondent as affirmed by the second respondent. Had the second respondent considered the matter in the light of the above, or at least given direction in the future to be complied with, while dropping penalty, the approach would have been different. It is true there is no escape for the society but to file its audit report within time. But by mere failure alone, levy of penalty is not warranted nor justified. 7. We note that the Hon’ble High Court in similar case has deleted the penalty levied u/s.271B of the Act for belated filing of Tax Audit Report (TAR). Since no change in facts or law could be point out by the Ld DR, ITA No.2182/Chny/2024 (AY 2016-17) M/s.The Namakkal Co-op. Housing Society Ltd. :: 4 :: respectfully following the decision of the Hon’ble Madras High Court in the case of Thanjavur Silk Handloom Weavers Co-op. Production & Sales Society Ltd. (supra), we find that since there was delay in getting the statutory report from the State Government, the assessee could file TAR belatedly on 20.03.2017; and hence it cannot be said to a deliberate act on the part of assessee to belatedly file the TAR. Therefore we are of the view that, there was reasonable cause for non-levy of penalty and direct deletion of penalty. 8. In the result, appeal filed by the assessee is allowed. Order pronounced on the 08th day of January, 2025, in Chennai. Sd/- Sd/- (जगदीश) (JAGADISH) लेखा सद /ACCOUNTANT MEMBER (एबी टी. वक ) (ABY T. VARKEY) \u0001याियक सद\bय/JUDICIAL MEMBER चे ई/Chennai, !दनांक/Dated: 08th January, 2025. TLN, Sr.PS आदेश क\u001a \u0016ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ\u0010/Appellant 2. \u0011\u0012थ\u0010/Respondent 3. आयकरआयु\u0018/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u0011ितिनिध/DR 5. गाड फाईल/GF "