- (1.) Present appeal has been filed under Section 260A of the Income Tax Act, 1961 (here-in-after referred to as the ?Act?) against the judgment and order of Income Tax Appellate Tribunal dated 26.07.1999 passed in Income Tax Appeal No. 1023/Allahabad/1994 for the assessment year 1990-91.
(2.) Heard Sri D.D. Chopra, learned Counsel for the appellant and Sri Amit Shukla, learned Counsel for respondent.
(3.) The Assessee/Respondent (here-in-after referred to as the ?Assessee?) is a co-operative society. For the assessment year 1990-91, Assessee filed the return on 26.12.1990 showing the receipt of Rs. 26,35,99,400/- in the status of co-operative society. The Assessing Authority levied the penalty under Section 271B of the Act vide order dated 26.08.1993 on the ground that the assessee could not get its accounts audited within the stipulated period as required under Section 44AB of the Act. Being aggrieved by the penalty order, assessee filed appeal before Commissioner of Income Tax (Appeals). It was pleaded before the Commissioner of Income Tax (Appeals) that the assessee was a co-operative Society and its accounts were being audited under the Cooperative Societies Act (here-in-after referred to as the ?Society Act?.). It was argued that the income of the assessee was exempted to tax under Section 80P of the Society Act. It was further argued that the delay in finalisation of the audit by the auditors approved by the Registrar occurred on account of delay in the receipt of audit reports from the branches. Commissioner of Income Tax (Appeals) has not accepted the plea of the assessee and confirmed the penalty order. Being aggrieved by the order of Commissioner of Income Tax (Appeals), assessee further filed appeal before the Tribunal. Before the Tribunal, it was pleaded that the books of account were provided to the auditors on 14.08.1989 (in time) for the statutory audit but the audit was completed and report was provided on 31.03.1991 and, thus, the delay was caused on account in getting the accounts audited. Tribunal accepted the explanation of the assessee and held that since the assessee had handed over its books of account to the auditors well before the stipulated date, the delay was caused on he part of the auditors. The Tribunal held that the failure to get the accounts for the assessment year 1990-91 and 1991-92 audited before the specified date was beyond the control of assessee i.e. due to delay on the part of auditors, which was the reasonable cause. The Tribunal further held that the default was in the nature of technical and venial for which the rigours of penal provision of Section 271B of the Act should not have been invoked and accordingly, set aside the penalty.;