Penalty under section 271B levied after lapse of
30 months of completion of assessment--Whether Barred by limitation
TaxPub Creative Cell
Facts: AO levied
penalty under section 271B since assessee-society failed in complying with the
provision of section 44AB. Assessee submitted that it being a co-operative
society was required to be mandatorily audited by Registrar of Co-operative
Society and only after that the same could be subjected to tax audit under
section 44AB, and due to delay in completion of the audit by the Registrar of
Co-operative Society, there was delay in conduct of tax audit. On appeal,
CIT(A) observed that there was delay of more than 4 years 10 months in conduct
of the audit under section 44AB from the Government audit, which could not be
said to be reasonable. Accordingly, the CIT(A) upheld the levy of the penalty.
Assessee contended that there was no whisper of alleged default under section
271B in assessment order passed on 31-12-2011. Further, there was no notice
issued after completion of the assessment for the alleged default but suddenly
on 16-6-2014, the AO issued a show-cause notice under section 271B. Therefore,
the said penalty was liable to be deleted.
Held: It was not
disputed that there was no finding in assessment order for levy of penalty for
the alleged default under section 271B. Further, it was also not disputed that
after passing of the order on 31-12-2011, the alleged notice was only issued on
16-6-2014 that was after two and half years, which was very abnormal time to fasten
the liability on account alleged default after the assessment was completed. In
between there was no notice and even the assessment order was silent on the
levy of the alleged penalty. Therefore, as AO levied penalty under section 271B
after passage 30 months after completion of assessment; the penalty proceedings
were barred by limitation and consequently, the penalty levied under section
271B could not be sustained and was accordingly, deleted.
Case :
Jila Sahakari Kendriya Bank Maryadit v. ITO 2022 TaxPub(DT) 3944 (Rajkot-Trib) :
(2022) 099 ITR (Trib) 0156 (Rajkot)