JUDGMENT
Satish Kumar Mittal, J.
1. This order shall dispose of the Income-tax Appeals bearing Nos. 476, 477, 478, 479 and 480 of 2007, filed under Section 260A of the Income-tax 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 ITAT”), 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 Section 271B of the Act for violation of the provisions of Section 44AB.
3. For the disposal of these appeals, we are taking the facts from I.T.A. No. 476 of 2007.
4. In 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 fertilizer/pesticides, seeds, etc., to its members and also derives income from interest, etc. For the year 2004-05, the society filed a return under the Act declaring its income as nil after claiming exemption under Section 80P of the Act. The said return was accompanied by trading account, profit and loss account and balance-sheet which were not audited. As the total sale/gross receipts of the society were more than Rs. 40 lakhs, the society was required to get its accounts audited by the chartered accountant and furnish the same in the prescribed form duly signed and verified as per the provisions of Section 44AB of the Act before the stipulated date, i.e., October, 31, 2004. Since the society failed to get its accounts audited by a chartered accountant and furnish the report thereof by the stipulated date, i.e., October 31, 2004, as per the provisions of Section 44AB of the Act, a show-cause notice under Section 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.
5. It is pertinent to mention here that in the present case, the copy of the audit report in Forms Nos. 3CA and 3CD was submitted by the society with its reply dated September 15, 2005. Before the Assessing Officer, the society raised a contention that it has no 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.
6. The Assessing Officer did not accept the explanation given by the society and imposed a penalty of Rs. 24,362, on the society under Section 271B of the Act at 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 Section 44AB of the Act.
7. On appeal by the society, the aforesaid order passed by the Assessing Officer was upheld by the Commissioner of Income-tax (Appeals), Karnal. Aggrieved against the said order, the society filed an appeal before the Income-tax Appellate Tribunal. Vide the impugned order, the Income-tax Appellate Tribunal allowed the appeal of the society and set aside the order of the income-tax 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 Section 44AB of the Act, was sufficient, therefore, in view of the provisions of Section 273B of the Act, no penalty was imposable on the assessee. Against the said order, the instant appeals have been filed by the Revenue.
8. Learned Counsel for the appellants argued that the order passed by the Income-tax Appellate 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 furnish the same along with the audit report in the prescribed form as per the provisions of Section 44AB of the Act. Learned Counsel further submitted that the second proviso of Section 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 rightly not accepted by the Assessing Officer and affirmed as such by the Commissioner of Income-tax (Appeals), could not be said to be sufficient and the orders passed by these two authorities should not have been set aside by the Income-tax Appellate Tribunal.
9. After hearing learned Counsel for the appellants and going through the impugned order, we do not find any substance in the contentions raised by learned Counsel for the appellants. Section 44AB of the Act provides that every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. The Explanation added to this section further provides that for the purposes of this section, “accountant” shall have the same meaning as in the Explanation given below Sub-section (2) of Section 288; and “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the October 31, of the assessment year.
10. In the present case, the specified date is October 31, 2004. The Explanation added to Sub-section (2) of Section 288 of the Act provides that in this section, “accountant” means a chartered accountant within the meaning of the Chartered Accountants Act, 1949, and includes, in relation to any State, any person who by virtue of the provisions of Sub-section (2) of Section 226 of the Companies Act, 1956, is entitled to be appointed to act as an auditor of companies registered in that State. The second proviso to Section 44AB further provides that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section.
11. It is undisputed that the society is registered under the Societies Act and it acts under the control of the Registrar, Co-operative Societies. Under Section 77 of the Societies Act, the accounts of the co-operative society-shall be audited in such manner as the Registrar may specify from time to time. In the instant case, the society has given the explanation for not furnishing the required audit report within the stipulated time, as the auditor was not appointed by the Registrar by that time. The delay took place because the society had no control over the appointment of the auditors by the Registrar, Co-operative Societies. Admittedly, in this case, along with reply dated September 15, 2005, to the show-cause notice, a copy of the audit report by the Sub-Inspector (Audit) appointed by the Registrar, Cooperative Societies, along with tax audit report in Forms Nos. 3CA and 3CD, was submitted by the society. Though the said explanation was not accepted by the Assessing Officer and Commissioner of Income-tax (Appeals), but the Income-tax Appellate Tribunal found that the said explanation was satisfactory. In view of the provisions of Section 273B of the Act, no penalty should have been imposed on the person or the asses-see if he proves that there was a reasonable cause for delay in complying with the provisions under Section 271B of the Act. We do not find any illegality in the conclusion arrived at by the Income-tax Appellate Tribunal that the explanation given by the society is satisfactory. Once the explanation given by the assessee was found to be satisfactory, the benefit of Section 273B was available to the assessee. The said finding is a pure finding of fact based on the material available on the record which does not require any interference in these appeals. We are also not inclined to accept the contention of learned Counsel for the appellants that in the present case when the society could not get its accounts audited from the auditor appointed by the Registrar, then it could have got its accounts audited from the chartered accountant and submit the report within the specified time. The contention of the appellants that the society was having an alternative which it could have availed of to avoid the penalty for violation of the provisions of Section 44AB of the Act, cannot be accepted because, in our opinion, the society is required to act under the control of the Registrar, Co-operative societies, under the provisions of the Societies Act and it is bound to get its accounts audited only from the auditor appointed by the Registrar, Co-operative Societies. Therefore, it cannot be said that the society was having an alternative to get its accounts audited from the chartered accountant.
In view of the aforesaid discussion, we do not find any illegality in the impugned order passed by the Income-tax Appellate Tribunal.
12. No substantial question of law is arising in these appeals.
Dismissed.