ITAT deletes penalty on reasonable and sufficient grounds

ITAT deletes penalty on reasonable and sufficient grounds

"We are of the view that the Assessee has sufficient and reasonable cause for delay in obtaining the audit report"

The Cuttack Bench of the Income Tax Appellate Tribunal waived the penalty of the Assessee on account of sufficient and reasonable cause for delay in obtaining the audit report.

The primary reason for the present appeal was the unjustified decision of the CIT(A), National Faceless Appeal Centre (NFAC) in confirming the penalty at Rs. 1,50,000/- by the Assessing Officer.

The Assessee submitted before the bench that there was a belated delay in receiving the audit report from the Statutory Authority, who were to do the audit report in accordance with the Co-operative Society Act. It was further submitted that such delay was beyond the control of the Assessee.

The two-member bench of George Mathan (Judicial Member) and Arun Khodpia (Accountant Member) observed that "A perusal of the facts as recorded by the AO shows that the delay in submitting the audit report was on account of delay in obtaining audit report from the statutory auditors. It is fairly admitted that the statutory auditors are appointed by the Registrar of Co-operative Societies and not by the assessee."

In response to the submissions made by the Assessee, the Department contended that the Assessee was non-cooperative and non-compliant with regard to the delay in audit accounts. It further contended that, if the Assessee had reasonable cause for such a delay he could have filed before the AO and ld CIT(A) and urged the bench to uphold the penalty as levied by the AO and confirmed by the ld CIT(A).

The bench allowed the appeal and deleted the penalty as levied by the AO.