SATISH KUMAR MITTAL, J. - (1.) THIS order shall dispose of IT Appeals bearing Nos. 476, 477, 478, 479 and 480 of 2007 filed under s. 260A of the IT Act, 1961 (hereinafter referred to as 'the Act'), which are arising from the common order passed by the Income -tax Appellate Tribunal, Chandigarh (hereinafter referred to as 'the Tribunal), whereby the five appeals filed by different assessees, in which the common question of law was involved, were disposed of.
(2.) THE common issue involved in these appeals is relating to the penalty imposed under s. 271B of the Act for violation of the provisions of s. 44AB.
(3.) FOR the disposal of these appeals, we are taking the facts from IT Appeal No. 476 of 2007. In the present case, the respondent is a co -operative credit and service society (hereinafter referred to as 'the society') registered under the Haryana Co -operative Societies Act, 1984 (hereinafter referred to as 'the Societies Act') and it is being governed by the provisions of the Societies Act. The society derives income from supply of fertilizers/pesticides, seeds, etc. to its members and also derives income from interest etc. For the year 2004 -05, the society filed return under the Act declaring its income as nil after claiming exemption under s. 80P of the Act. The said return was accompanied by trading account, P&L a/c and balance sheet which were not audited. As the total sale/gross receipts of the society were more than Rs. 40 lacs, the society was required to get its account audited by the chartered accountant and furnish the same in the prescribed form duly signed and verified as per the provisions of s. 44AB of the Act before show cause notice under s. 271B of the Act was issued for imposition of penalty. The assessee replied to the notice stating that it being a co -operative society, was required to get its accounts audited by the auditor appointed by the Registrar, Co -operative Societies under the provisions of the Societies Act, and since the auditor was not appointed by the Registrar within the stipulated time, therefore, the audit report could not be submitted in time. It is pertinent to mention here that in the present case, the copy of the audit report in Form Nos. 3CA and 3CD was control over the appointment of auditor by the Registrar, Co -operative Societies, therefore, the requirement of submitting the audit report within the stipulated period could not be complied with. The AO did not accept the explanation given by the society and imposed a penalty of Rs. 24,362 on the society under s. 271B of the Act @ half per cent of the gross turnover for failure to get its accounts audited by the chartered accountant and furnish the same along with the audit report by the specified date as per the provisions of s. 44AB of the Act. On appeal by the society, the aforesaid order passed by the AO was upheld by the CIT(A), Karnal. Aggrieved against the said order, the society filed an appeal before the Tribunal. Vide impugned order, the Tribunal allowed the appeal of the society and set aside the order of the IT authorities while holding that the explanation given by the society explaining its cause of delay in filing the audit report in the prescribed form under s. 44AB of the Act, was sufficient. Therefore, in view of the provisions of s. 273B of the Act, no penalty was imposable on the assessee. Against the said order, the instant appeals have been filed by the Revenue. Learned counsel for the appellants argued that the order passed by the Tribunal cancelling the penalty is not justified in the facts and circumstances of the case and the explanation given by the society that it was required to get its accounts audited by the auditor appointed by the Registrar, Co -operative Societies under the provisions of the Societies Act, and since the auditor was not appointed by the Registrar within the stipulated time, therefore, the audit report could not be submitted in time, cannot be accepted as reasonable because if the auditor was not appointed by the Registrar, Co -operative Societies within the stipulated period, the society could have got its accounts audited by the chartered accountant before the specified date and furnished the same along with the audit report in the prescribed form as per the provisions of s. 44AB of the Act. Learned counsel further submitted that second proviso of s. 44AB of the Act provides an alternative to a person, who is required by or under any other law to get his accounts audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law along with a further report by a chartered accountant in the form prescribed. Therefore, the explanation given by the society, which was not rightly accepted by the AO and affirmed as such by the CIT(A), could not be said to be sufficient and the orders passed by these two authorities should not have been set aside by the Tribunal.;