No penalty for delay in audit report submission due to late appointment of Auditor by Registrar of Societies

Brief facts of the case are that the assessee filed the return of income on the basis of the provisional accounts audited by a Chartered Accountant but did not file the audited accounts. The AO, therefore, issued a notice u/s 271D for levy of penalty for non filing of the audit report. The assessee explained that the audit report could not be filed within the time as the delay took place because the appointment of the Auditors was to be made by the Registrar of the Societies and thus beyond the control of the assessee and that the assessee should not be penalized for non compliance of section 44AB of the Act under such circumstances. However, the AO was not convinced with the assessee’s explanation and levied the penalty. Aggrieved, the assessee preferred an appeal before the CIT (A), who confirmed the order of the AO and the assessee is in second appeal before us.11. Having regard to the rival contentions and the material on record, we find that the assessee being a Govt. organization and a Registered Society, has to abide by the rules framed under the Societies Act. As per the said Act, the Auditors have to be appointed by the Registrar of Societies and therefore, is beyond the control of the assessee. We are satisfied that the assessee was prevented by reasonable cause for not getting its accounts audited u/s 44AB of the Act within the prescribed time. Therefore, we set aside the penalty levied by the AO and confirmed by the CIT (A).