Shri Kangvi Vibhag Bandhkam Adivasi Majoor Shahkari Mandli Ltd, v. The Income tax Officer,Wrd-2,, Valsad

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AT SURAT CAMP AHMEDABAD BEFORE SHRI T.K. SHARMA JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.1476/AHD/2008 ASSESSMENT YEAR: 2005-06 DATE OF HEARING:24.5.10 DRAFTED:25.5.10 KANGVI VIBHAG BANDHKAMR KARMARI ADIVASI MAJOOR SAAAHKARI MANDLI LTD. AT: VILLAGE KANGVI TAL. DHARAMPUR DIST. VALSAD PAN NO.AAAAK4719R V/S . INCOME TAX OFFICER WARD-2 VALSAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI RAJESH UPADHYAY AR RESPONDENT BY:- SMT. JYOTI LAXIMI SR-DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER:- THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF LD. CIT(APPEALS)-VALSAD WHEREIN HE CONFIRMED THE PENALTY U/S.271B LEVIED AT RS.30 337/-. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD. THE PENALTY HAS BEEN IMPOSED ON THE GROUND THAT THE ASSESSEE HAS NOT GOT ITS ACCOUNT AUDITED AS REQUIRED U/S.44AB OF THE ACT. ACCORDING TO ASSESSING OFFICER ASSESSE E IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE ASSESSEE IS CARRYING ON BUSINESS O F CONSTRUCTION WORK AND ITS TURNOVER EXCEEDED RS. 40 LAKHS BEING AT RS.60 76 362/-. THE ASSESSEE DID NOT GET ITS ACCOUNT AUDITED IN TIME. HOWEVER AUDIT REPORT WAS FILED ON 31-07- 2007. ACCORDINGLY HAVING NOT BEEN SATISFIED WITH THE EXPLANATION ASSESSING OFFICER LE VIED THE PENALTY OF RS.30 30 337/-. ITA NO.1476/AHD/2008 A.Y. 2005-06 KVBKAMSM. LTD. V. ITO WD-2 VLS PAGE 2 3. LD. CIT(APPEALS) CONFIRMED THE PENALTY ON THE GR OUND THAT NO REASONABLE CAUSE FOR NON-FILING OF AUDIT REPORT IS FURNISHED. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIALS ON RECORD. LD. AR SUBMITTED THAT ASSESSEE CONSIDERED THAT ITS INCOME IS EXEMPT BY VIRTUE OF SEC.80P(2)(VI) AND ALSO U/S.10(27) OF THE ACT THEREFORE IT NEED NOT FI LE THE RETURN OF INCOME. ACCORDINGLY HE DELAYED THE AUDITING OF ACCOUNTS. IT IS A REASONAB LE CAUSE THEREFORE NO PENALTY SHOULD BE LEVIED. 5. ON THE OTHER HAND LD. SR-DR RELIED ON THE ORDER S OF THE AUTHORITIES BELOW. 6. INCOME OF THE ASSESSEE IS EXEMPT U/S.80P(2)(VI). AS IT IS A CO-OPERATIVE SOCIETY. IT DELAYED THE AUDITING OF ACCOUNTS. THIS CONSTITUTED REASONABLE CAUSE. IT IS NOT A CASE WHERE ACCOUNTS WERE NOT GOT AUDITED AT ALL BUT A CASE A D ELAYED AUDITING. SINCE THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT ITS INCOME IS NOT LIABL E TO TAX AND ACCORDINGLY ACCOUNT WAS DONE BELATEDLY. THIS A REASONABLE CAUSE AND HENCE WE DEL ETE THE PENALTY. 7. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 28/05/2010 SD/- SD/- (T.K.SHARMA) (D.C.AGRAWAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD DATED : 28/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VLS 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD