Facts of the case : The assessee, a co-operative society has filed a belated return of income (The due date applicable to assessee for filing Return of Income along with Tax Audit Report was 30.09.2014) without production of Audit report under section 44AB of the Income Tax Act. The assessing officer has imposed penalty under section 271B for failure to furnish a tax audit report.
Relevant facts : As per the assessee, being a co-operative society, audit is to be done as per the provisions of Kerala Co-operative Societies Act, 1969 and there is no specific power provided for the appointment of an auditor or getting the accounts audited in time. Hence, the assesse contended that there is not default on the end of the society for delay in completion of audit or non- production of Audit Report as per prescribed time limit.
The reason provided by co-operative society is not a reasonable and sufficient ground for non –submission of the audit report along with Form 3CA read with Rule 6G(1) OF Income Tax Rules in the view of the Tribunal.
Relevant extract of Rule 6G(1) as under :
“ The report of audit of the accounts of a person required to be furnished under section 44AB shall, in the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited, be in Form No. 3CA”
Hence, by elaborating the extract of Rule 6G(1), Cochin Bench, Tribunal (ITAT) held that if a person is required under any other law to get his accounts audited, getting the account audited under that law before the specified date and furnished by that date, the report of such audit report would be constituted as sufficient compliance of section 44AB of the Act and in the present case, the assessee is required to get its accounts audited under Co-operative Societies Act.
Conclusion : Non-production of Audit Report in the prescribed format within the prescribed limit, while submitting the Return is a case of levying the penalty u/s 271B of the Income Tax Act due to non submission of reasonable and satisfactory explanation.