2018 (11) TMI 268 - HC - Income Tax

Appointment of Special Auditor under Section 142(2A) - Held that - There is no complex issue involved in this matter. But, the Assessing Officer, only to drag on the proceedings, has passed the impugned order, appointing Special Auditor. Hence, he prays for allowing the present writ petition. No where, the Assessing Officer was directed to entrust the work with Special Auditor. Moreover, in the impugned order also, there is no whisper as to the complexity involved in the adjudication of the present case. As Special Government Pleader appearing for the official respondents fairly submitted that the impugned order may be quashed and the matter may be remanded for fresh consideration, the order impugned dated 21.03.2013 is set aside and the matter is remitted back to the file of the first respondent for fresh consideration. The first respondent is directed to afford an opportunity of personal hearing to the petitioner and thereafter, pass appropriate orders,

Summary

Issues:
1. Appointment of Special Auditor under Section 142(2A) of the Income Tax Act, 1961.
2. Reopening of assessment and deposit issue of &8377; 56,34,828.
3. Impugned order appointing Special Auditor without complexity in the matter.
4. Request for quashing the impugned order and remanding for fresh consideration.

Analysis:
1. The writ petition challenged the appointment of a Special Auditor under Section 142(2A) of the Income Tax Act, 1961, by the first respondent. The petitioner, an assessee, had filed returns for the assessment year 2005-06, and after a series of events including a notice under Section 148 and a revised assessment order, the matter was taken up by the Tribunal. The Tribunal remanded the issue of deposit of &8377; 56,34,828 to the Assessing Officer for verification and fresh adjudication. However, the Assessing Officer appointed a Special Auditor without any direction to do so, leading to the challenge in the writ petition.

2. The petitioner's counsel argued that there was no complexity in the matter, and the appointment of a Special Auditor was an attempt to unnecessarily prolong the proceedings. The Tribunal's order did not direct the appointment of a Special Auditor, and there was no mention of complexity in the impugned order. The Special Government Pleader representing the official respondents agreed that the impugned order should be quashed and the matter remanded for fresh consideration.

3. The High Court, after considering the submissions, set aside the impugned order dated 21.03.2013 and remitted the matter back to the first respondent for fresh consideration. The first respondent was directed to provide the petitioner with a personal hearing and then pass appropriate orders in line with the Tribunal's directive on the deposit issue. The Court mandated that the entire process should be completed within four weeks from the date of receiving the order. The writ petition was allowed with no costs, and connected miscellaneous petitions were closed.

This detailed analysis of the judgment highlights the issues surrounding the appointment of a Special Auditor, the reopening of assessment, and the subsequent remand for fresh consideration, emphasizing the importance of following due process and legal directives in such matters.