Income Tax Appellate Tribunal - Kolkata
Tilari Samabay Krishi Unnayan Samity ... vs Acit, Cir-23, Hooghly, Hooghly on 10 August, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH : KOLKATA
[Before Hon'ble Shri M.Balaganesh, AM & Hon'ble Shri S.S.Viswanethra Ravi, JM]
I.T.A No. 1950/Kol/2017
Assessment Year : 2012-13
Tilari Samabay Krishi Unnayan Samity Ltd. -vs- ACIT, Circle-23, Hooghly
[PAN: AADAT 6994 J]
(Appellant) (Respondent)
For the Appellant : Shri Anil Kochar, Advocate
For the Respondent : Shri A. Bhattacharjee, Addl. CIT
Date of Hearing : 07.08.2018
Date of Pronouncement : 10.08.2018
ORDER
Per M.Balaganesh, AM
1. This appeal by the assessee arises out of the order of the Learned Commissioner of Income Tax(Appeals)-6, Kolkata [in short the ld CIT(A)] in Appeal No.138/CIT(A)- 6/Kol/2015-16 dated 12.06.2017 against the order passed by the ACIT, Circle-23, Hooghly [ in short the ld AO] under section 143(3) read with Section 143(3) of the Income Tax Act, 1961 (in short "the Act") dated 23.01.2015 for the Assessment Year 2012-13.
2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the levy of penalty u/s 271B of the Act in the sum of Rs. 77,478/-, in the facts and circumstances of the case.
2 ITA No.1950/Kol/2017Tilari Samabay Krishi Unnayan Samity Ltd.
A.Yr. 2012-13
3. The brief facts of this appeal is that the assessee is a co-operative society and had filed its return of income for the assessment year 2012-13 on 24.03.2014 electronically declaring nil income after claiming deduction u/s 80P(2) of the Act. The assessee claimed to have obtained the tax audit report from its tax auditor on 24.09.2012 but since the return of income was filed belatedly only on 24.03.2014, the tax audit report was also filed electronically along with return of income on 24.03.2014. It is not in dispute before us that the assessee has rendered services only to its members of the society and there is no dispute about the eligibility of claim of deduction u/s 80P(2) of the Act for the assessee society during the year under consideration. Since the tax audit report in Form no. 3CB and 3CD was filed belatedly by the assessee on 24.03.2014, the ld. AO proceeded to levy penalty u/s 271B of the Act. The assessee replied that it was under the bonafide belief that it was rendering services only to its members and that its entire income was eligible for deduction u/s 80P(2) of the Act, and hence there was no obligation on the part of the assessee to file any return of income even though the accounts of the assessee were duly audited by the independent tax auditor and report obtained thereon on 24.09.2012 itself. This explanation was not found satisfactory by the ld. AO and accordingly penalty u/s 271B was levied in the sum of Rs. 77,478/- being 0.5% of the gross receipts of the assessee. The ld. AO also held in his order that the claim of the assessee that the tax audit report was obtained from the tax auditor on 24.09.2012 does not appear to be correct because had it been obtained in time, there was no reason for the assessee to delay the filing of its return of income. The ld. AO also observed in his penalty order that the tax audit report was not obtained up to 31.03.2013 by the assessee. Based on these observations, he validated the levy of penalty u/s 271B of the Act. This action of the ld. AO was upheld by the ld. CIT(A). Aggrieved the assessee is in appeal before us.
4. We have heard rival submissions. We find that the ld. AR had placed on record the copy of the balance sheet of the assessee co-operative society as on 31.03.2012 which 2 3 ITA No.1950/Kol/2017 Tilari Samabay Krishi Unnayan Samity Ltd.
A.Yr. 2012-13 was duly signed by the Senior Audit Officer of Co-operative Societies Department on 30.01.2013. The ld. AR has stated that this is the first year of applicability of tax audit provisions for the assessee. The ld. AR also placed on record the copy of entire audited accounts for the year ended 31.03.2012 together with the tax audit report in Form No. 3CB and 3CD (enclosed in pages 10 to 21 of the paper book) and filed before the ld. AO before completion of the assessment proceedings on which fact, there is no dispute. The said audited accounts and the tax audit report was dated 24.09.2012 i.e. much before the due date of filing of return of income u/s 139(1) of the Act. We also find that the Senior Audit Officer of the Co-operative Societies Department had verified the audited accounts of the assessee as on 31.03.2012 and had endorsed the same by affixing his signature on 30.1.2013. This fact clearly goes to prove that the accounts were duly subjected to the tax audit and regular audit by the assessee society and much before 30.01.2013. Hence the observation of the ld. AO that the audited accounts were not prepared up to 31.3.2013 in his penalty order is factually incorrect. In any case, we find that the revenue had not brought any contrary material or evidences on record to prove that the assessee had not obtained the tax audit report from its tax auditor on 24.09.2012, whereas the same audited accounts were made available before the Senior Audit Officer of the Co-operative Societies Department for verification and the said Officer had also affixed signature in the said Balance Sheet on 30.01.2013. We have also gone through the balance sheet signed by the tax auditor and the balance sheet endorsed by the audit officer of the Co-operative Societies Department wherein, we find no discrepancy in the figures reflected thereon. In these facts and circumstances, it cannot be said that the tax audit report was not obtained by the assessee on 24.09.2012 to disregard the claim of the assessee. Hence, the levy of penalty u/s 271B of the Act does not survive.
5. We also find that the levy of penalty u/s 271B is subject to provisions of section 273B of the Act wherein the assessee on adducing reasonable cause for not filing audit 3 4 ITA No.1950/Kol/2017 Tilari Samabay Krishi Unnayan Samity Ltd.
A.Yr. 2012-13 report would be entitled for immunity from levy of penalty. In the instant case, the assessee's bonafide belief that it was not entitled to file its return of income and it had no taxable total income in view of its eligibility to claim deduction u/s 80P(2) of the Act stands out as a reasonable cause within the meaning of section 273B of the Act. Hence the assessee would be entitled for immunity from levy of penalty u/s 273B of the Act. Accordingly, grounds raised by the assessee are allowed.
6. In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 10.08.2018
Sd/- Sd/-
[S.S. Viswanethra Ravi] [ M.Balaganesh ]
Judicial Member Accountant Member
Dated : 10.08.2018
SB, Sr. PS
Copy of the order forwarded to:
1. Tilari Samabay Krishi Unnayan Samity ltd., C/o, S.L. Kochar, Advocate, 86, Canning Street, Kolkata-1.
2. ACIT, Circle-23, Hooghly, 54/1, Rafi Ahmed Kidwai Road, Kolkata-700016.
3..C.I.T.(A)- 4. C.I.T.- Kolkata.
5. CIT(DR), Kolkata Benches, Kolkata.
True copy By Order Senior Private Secretary Head of Office/D.D.O., ITAT, Kolkata Benches 4