आयकर अपीलीय अिधकरण ”सी” (cid:586)ायपीठ चे(cid:580)ई म(cid:336)।

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCHES “C” :: CHENNAI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.3943/CHNY/2025 िनधाªरण वषª / Assessment Year: 2015-16 The Nasiyanur Primary Vs The Income Tax Officer, Agricultural Co-op Credit Society Ward-2(1), Erode.

Ltd, 22/26, Thingalur Road, Nasiyanur, Erode – 638107.

PAN: AABAT2887J Appellant/ Assessee Respondent / Revenue Assessee by A.Vijayalakshmi –CA(Virtually)

Revenue by Ms. R Anitha – Addl.CIT Date of hearing 18/02/2026 Date of pronouncement 7/04/2026 आदेश/ ORDER PER INTURI RAMA RAO, AM :

This appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], Delhi dated 10.10.2025 passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16.

2. The Assessee raised the following grounds of appeal :

“1. The AD and CIT(A) erred in law and on facts in confirming the penalty u/s 2718 without appreciating the fact that the delay in filing the audit report was due to circumstances beyond the control of the appellant, as the statutory audit was conducted by auditors appointed by the Government.

2. The AO and CIT(A) failed to consider that the audit report was submitted before the completion of the assessment proceedings, and hence, there was no loss to the Revenue nor was there any mala fide intention.

3. The appellant relies on the binding precedents of the Hon'ble ITAT, Chennai, which have held in identical cases that when tax audit reports are filed before assessment completion and the breach is only technical, penalty u/s 2718 should not be levied K1594 Perumanallur Primary Agricultural Co-op. Credit Society vs. ITO-

ITA No. 981/Chny/2023

4. The penalty levied for technical and venial breach of a procedural provision without any loss to the Revenue or mala fide conduct is not sustainable in law, as held in multiple judicial forums including CIT vs.

A.N. Arunachalam (208 ITR 481)

5. The appellant craves leave to add, amend, or withdraw any ground of appeal at any time before or during the hearing.

6. Prayer:

The appellant prays that the Hon'ble Tribunal may be pleased to delete the penalty levied u/s 2718 of the Income Tax Act, 1961.”

3. Briefly the facts of the case are that the appellant is a Co-operative Society duly incorporated under the provisions of The Tamilnadu Co- operative Society Act, 1983. It is formed with an object of providing credit facilities to member farmers. It is classified as a Primary Agricultural Credit Co-operative Society. The appellant not filed the Return of Income under the provisions of Section 139(1) of the Income Tax Act, 1961. However, based on the information that appellant made cash deposits of Rs.2,82,45,000/- during the previous relevant to Assessment Year 2015-16, the Assessing Officer(AO) formed an opinion that income got escaped assessment to tax. Accordingly, a notice u/s.148 was issued on 07.04.2022. In response to notice u/s.148 of the Act, the appellant filed Return of Income for A.Y.2015-16 on 05.05.2022 disclosing NIL income after claiming deduction u/s.80P of the Act. Against the said Return of Income, the assessment was completed by the Assessing Officer vide order dated 04.03.2024 passed u/s.147 r.w.s 144B of the Act accepting the returned income. Subsequently, the Assessing Officer initiated penalty proceedings u/s.271B of the Act for failure of the Assessee Co-operative Society to get the accounts audited and furnish the prescribed Audit Report u/s.44AB of the Act, within the due date prescribed, since the assessee had furnished the Audit Report only on 05.05.2022. Accordingly, a show cause notice was issued u/s.274 r.w.s 271B of the Act on 07.02.2023. In response to the show cause notice, appellant submitted that delay in furnishing the prescribed Audit Report u/s.44AB had occurred on account of the fact that the delay in appointment of Auditor under Tamiln