2007 (4) TMI 758 - HC - Income Tax

Summary

Issues involved: Challenge to order u/s 142(2A) of the Income Tax Act, 1961 for appointment of Special Auditor without giving reasonable opportunity to the assessee and without considering the reply filed by the assessee.

The petitioner challenged the order dated 18.12.2006 passed by the Dy. Commissioner of Income Tax (OSD) Range1, Ahmedabad u/s 142(2A) of the Income Tax Act, 1961. The petitioner contended that a show cause notice was issued on 12.12.2006 with a short deadline to file a reply by 15.12.2006. The assessee requested for an extension, which was granted until 18.12.2006. The reply was filed on 18.12.2006, and on the same day, the order for appointment of a Special Auditor was passed without considering the reply or providing a reasonable opportunity to be heard.

The petitioner argued that the order passed on 18.12.2006 did not reference the reply filed by the assessee, raising doubts about whether the order was made before the reply was submitted. The petitioner contended that the assessee was not given a fair chance to present their case before the order was issued. These contentions were not disputed by the counsel for the Revenue.

In light of the undisputed facts, the High Court set aside the order dated 18.12.2006 passed by the Dy. Commissioner of Income Tax (OSD) Range1, Ahmedabad. The Court granted liberty to the Dy. Commissioner to issue a fresh and reasoned order after considering the reply filed by the assessee and providing a reasonable opportunity for the assessee to be heard. The petition was disposed of with the aforementioned directions.