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Issues involved: The judgment deals with the issue of whether the assessment order was barred by limitation due to the time taken for completion of a special audit under section 142(2A) of the Income Tax Act.
Issue 1: Assessment barred by limitation The first issue raised was regarding the assessment order being barred by limitation. The special audit under section 142(2A) was ordered and completed within the extended time frame. The assessee contended that the assessment proceedings were time-barred as the special audit report was filed beyond the allowed time. The AO relied on a previous decision to reject the objection. The CIT(A) upheld the AO's decision, stating that the extension of time for the special audit was proper. Issue 1 Details: The assessee argued that the extension of time for furnishing the special audit report should have been based on an application from the assessee, as per the proviso to section 142(2C) of the Act. They cited previous tribunal decisions to support their contention. The Departmental Representative supported the CIT(A)'s decision, stating that the AO rightly applied the previous decision and the extension of time was necessary due to lack of cooperation from the assessee. Decision: Upon reviewing the provisions of section 142(2C) and relevant circulars, the Tribunal found that the AO could only extend the time for the special audit report based on an application from the assessee. Since no such application was made in this case, the extension granted by the AO was deemed invalid. The Tribunal held that the assessment order was indeed barred by limitation and consequently quashed the assessment. Conclusion: The appeal of the assessee was allowed based on the finding that the assessment was time-barred. As a result, the other issues raised by the assessee were not addressed in the judgment.
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