Case Law Details
Gramin Sewa Sahakari Samiti Maryadit Vs ITO (ITAT Raipur)
ITAT Raipur held that cooperative society is entitled for claiming deduction u/s. 80P(2)(d) of the Income Tax Act in respect of dividend received on shares of cooperative banks.
Facts- The assessee is a Primary Agricultural Co-operative Society engaged in carrying out business of banking, paddy procurement, sale of fertilizers, seeds, manures, and pesticides and of control items under Public Distribution System. During the course of assessment proceedings, it was noticed that the assessee has failed to get its accounts audited within the specified due date i.e. 30.09.2012. Audit was done in the case on 23.02.2013. Thus, the AO observed that the assessee had committed default within the meaning of sec.44AB of the Act. Accordingly, penalty proceedings were initiated. Notice u/s.271B of the Act, was issued to show cause ‘as to why’ penalty should not be imposed. After considering the submissions, AO confirmed penalty of Rs. 1,50,000/- u/s. 271B. CIT(A) confirmed the same. Being aggrieved, the present appeal is filed.
The assessee society has claimed 100% deduction of income from all the activities claiming that it is covered by the provisions of sec.80P of the Act. The Ld.AO was not found satisfied with the explanations submitted by the assessee with respect to its entitlement to qualify for deduction u/s.80P of the Act, has made certain additions u/s.80P of the Act. CIT(A) granted partial relief. Being aggrieved, the present appeal is filed.
Conclusion- Held that order of penalty levied by the Ld.AO u/s.271B of the Act and confirmed by the Ld. CIT(A) is liable to be set aside with a direction to verify that the appointment of the statutory/tax auditor was done after the due date of completion of audit u/s 44AB of the Act, and if same is the case and audit was completed within a reasonable time of such appointment, then the penalty u/s 271B cannot be held as justified.
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