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penalty under section 271B


Court :
HIGH COURT OF UTTARAKHAND

Brief :
Where the assessee was a co-operative society and its income was deductible under section 80P, it was not necessary for the AO to impose penalty under section 271B upon the assessee for non-submission of audit report under section 44AB on or before due date since there appeared no intention on the part of the assessee to conceal the income or to deprive the Government of revenue, as there was no tax payable on the income of the assessee, in view of the provisions of section 80P.

Citation :
CIT v. Iqbalpur Cooperative Cane Development Union Ltd. ITA No. 57 of 2007

5. Having heard learned counsel for the parties and after going through the papers on record, we find that it is admitted case that assessee is a co-operative society and its income was deductible under Section 80 P of Income Tax Act, 1961. No doubt, under the provisions of Section 44 A B of the Act, the assessee was required to get its account audited irrespective of the fact whether the income was deductible or not. The question before us is whether in such a case, there was justification on the part of the Assessing Officer to impose penalty under Section 271 B of the Act for non submission of audit report under Section 44 AB or not on or before due date. 6. Considering all the facts and circumstances of the case, we are of the view that since there appears no intention on the part of the assessee as found by the Income Tax Appellate Tribunal to conceal the income or to deprive the Government of revenue, as there is no tax payable on the income of the assessee, in view of the provisions of Section 80 P of Income Tax Act, 1961, we are of the view that it was not necessary for the Assessing Officer to impose penalty under Section 271 B of the Act. On going through the impugned order passed by the tribunal, in the above circumstances, we do not find any sufficient reason to interfere with the satisfaction recorded by the tribunal as to the finding of fact that the assessee had no intention to cause any loss to the Revenue and as such, the penalty was not necessarily required to be imposed by the Assessing Officer. Agreeing with the view of the tribunal, we hold that though an assessee is liable to penalty under Section 271 B of Income Tax Act, 1961, for failure to comply the provisions of Section 44 A B of the Act, but since in the present case, no tax was payable by the assessee/respondent in view of the provisions contained in Section 80 P of the Act, the tribunal has committed no error of law in setting aside the penalty imposed by the Assessing Officer. Accordingly, the question of law raised in the appeal stands answered and the appeal is dismissed.
 

CA Devanshi Gandhi (Ajani)
on 20 March 2009
Published in Income Tax
Views : 5376
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