Taxpublishers.in - InterestingDecision/IDDT_006.htm - Tax Publishers Your Tax Solution Hub

Share via Whatsapp 270 Views


Tax Publishers 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)

Tax Publishers

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)