JUDGMENT
1. These two appeals are directed against the order dated November 24, 2000, passed by the Income-tax Appellate Tribunal, Jaipur. These appeals relate to the assessment years 1986-87 and 1988-89. The common issue involved in these appeals is with regard to penalty imposed under Section 271B of the Income-tax Act, 1961, and therefore, the appeals are being decided by this common order.
2. The appellant, Rajasthan Co-operative Dairy Federation Ltd., is a co-operative society governed by the provisions of the Rajasthan Co-operative Societies Act, 1965. As per the requirement of Section 44AB of the Income-tax Act, 1961, the assessee should get its accounts of the previous year audited by an auditor before the specified date. For the assessment year 1986-87, the specified date was June 30, 1986, and for the assessment year 1988-89, the specified date was June 30, 1988. Admittedly, the assessee had not got its accounts audited before the aforesaid specified dates, and therefore, the proceedings for imposing penalty under Section 271B were initiated by the Assessing Officer and he levied the penalty of Rs. 1 lakh for each year, i.e., 1986-87 and 1988-89.
3. In appeal before the Commissioner of Income-tax (Appeals), the assessee submitted that the power to appoint the auditor is with the Registrar, Cooperative Societies, under Section 68 of the Co-operative Societies Act, 1965, and unless the auditor is appointed by the Registrar, Co-operative Societies, it was not possible for the assessee to get its accounts audited and that had not been done by the Registrar, Co-operative Societies, in spite of repeated requests made by the assessee.
4. The assessee could not get its accounts audited before the specified dates and the explanation submitted by the assessee was accepted being a reasonable cause’ for delay in filing the audit report and the penalty imposed by the Assessing Officer had been cancelled by the Commissioner of Income-tax (Appeals).
5. In both these appeals, the Income-tax Appellate Tribunal, Jaipur, was of the view that since the auditor had not been appointed before the specified dates, as such, the accounts could not be got audited before the specified dates, even then the penalty levied by the Assessing Officer is justified.
6. In appeal before us, Mr. Jain, learned counsel for the appellant-assessee, submits that since the appointment of the auditor is in the hands of the Registrar, Co-operative Societies, under Section 68 of the Co-operative Societies Act, 1965, the assessee could not get its accounts audited without statutory audit done by the auditor appointed by the Registrar, Co-operative Societies. He drew our attention to page No. 42 of the paper book which relates to the order dated May 8, 1994, passed by the Registrar, Co-operative Societies, Jaipur, wherein it has been directed that no certificate with regard to tax audit shall
be issued unless the accounts are got audited by the auditor appointed by the Registrar, Co-operative Societies.
7. Mr. Jain also brought to our notice that in spite of the requests made by the assessee to the Registrar, Co-operative Societies, Jaipur, for appointment of the auditor before the specified dates the same had not been done by the Registrar and in the absence of appointment of the auditor, it was beyond the control of the assessee to get its accounts audited and the delay had been caused due to late appointment of the auditor. Therefore, penalty should not be levied upon the assessee under Section 271B of the Income-tax Act, 1961.
8. He further submits that the proviso to Section 44AB of the Income-tax Act, 1961, provides that if a statutory audit is got completed under any other relevant statute by the society, it shall be the sufficient compliance with the provisions of Section 44AB of the Act of 1961.
9. Mr. Singhi, learned counsel for the Revenue, submits that it is true, that the proviso to Section 44AB of the Income-tax Act, 1961, provides that if the accounts are got audited under any other law by the society that is sufficient compliance with the provisions of Section 44AB of the Income-tax Act, 1961, but, the audit should be completed before the specified date. In this case, the audit had not been completed before the specified date, therefore, this provision does not help the assessee in any way.
10. We agree with Mr. Singhi, learned counsel for the Revenue, that the provision requires that if the accounts are got audited under the relevant law before the specified dates that will be the sufficient compliance with the provisions of Section 44AB of the Income-tax Act, 1961. In the case in hand, the accounts are not got audited by the statutory auditor before the specified dates, therefore, this proviso does not in any way help the assessee.
11. But, at the same time, the assessee had reasonable cause for not getting the accounts audited before the specified dates, the penalty under Section 271B is not justified. The admitted facts in this case are that the assessee is a co-operative society and its accounts must be got audited by the auditor appointed by the Registrar, Co-operative Societies and, no other auditor can audit the accounts of the assessee. Mr. Jain, learned counsel for the assessee, has rightly brought to our notice the order of the Registrar, Co-operative Societies, Jaipur, dated May 8, 1994, wherein the Registrar, Co-operative Societies, has ordered that no certificate shall be issued with regard to tax audit unless the accounts are got audited by the auditors appointed by the Registrar, Co-operative Societies, Jaipur.
12. In the case in hand, the assessee had requested the Registrar, Co-operative Societies, Jaipur, on January 27, 1987, April 14, 1987 and May 11, 1987. In spite of the repeated requests made by the assessee to the Registrar, the Registrar had not appointed the auditor to audit the accounts of the assessee. In the absence of such appointment of the auditor, it was not possible for the asses-
see to get its accounts audited by any other auditor before the specified dates. Nowhere on the record, has any material been shown that the delay in auditing the accounts took place for any fault of the assessee. The assessee had taken due care and tried its level best to comply with the provisions of Section 44AB of the Income-tax Act, 1961. The assessee cannot be punished for the fault of the third party which is required under a statute.
13. The assessee was under the obligation to get its accounts audited by the auditor appointed by the Registrar, Co-operative Societies, Jaipur. When the auditor had not been appointed by the Registrar, Co-operative Societies, the assessee can only make request to the Registrar to appoint the auditor and repeated requests were made by the assessee. In spite of repeated requests made by the assessee to the Registrar, the auditor had not been appointed and the delay in auditing the accounts took place because the appointment of the auditor was not made by the Registrar and for that the assessee should not be punished. We are of the view that the Tribunal had committed an error in setting aside the order passed by the Commissioner of Income-tax (Appeals) by restoring the order passed by the Assessing Officer by which penalty was imposed under Section 271B of the Income-tax Act, 1961.
14. In the result, both the appeals are allowed and stand disposed of.