9911796707
TMI Blog2011 (6) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under section 158BC to which the assessee filed return declaring nil undisclosed income. The Assessing Officer noticed that the accounts were neither correct, complete nor written properly for him to find out the exact undisclosed income suppressed by the assessee. He, therefore, proceeded to appoint an auditor under section 142(2A) of the Act after getting prior approval from the Commissioner of Income-tax. When the proposal was communicated to the assessee, the assessee agreed with the officer by stating that the accounts are complex and has mistakes and, therefore, they have no objection in appointing an auditor under section 142(2A). In fact, in the reply sent to the officer, the assessee even requested the officer to authorise the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee submitted that block assessment has to be based on evidence and materials collected during search and so much so, the Assessing Officer cannot rely on the audit report prepared by the special auditor appointed under section 142(2A) of the Act. The learned standing counsel, on the other hand, submitted that the block assessment is not based on special auditor's report but based on accounts and materials seized during search conducted under section 132 of the Act and all what the officer has done is to seek the assistance of a special auditor to assess the undisclosed income revealed by books of account and other materials seized. 4. After hearing both sides and after going through the orders of the authorities below, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the relevant period was less than the income disclosed from the seized records and found out by the special auditor, then such income is certainly assessable as the undisclosed income based on the seized records. Therefore, what the special auditor appointed under section 142(2A) does is only to assist the Assessing Officer to find out the undisclosed income available from the seized records. So much so, in our view, the appointment of an auditor by the Department under section 142(2A) is permissible for auditing the accounts seized from the assessee and such audit report and findings by the auditor could be relied on by the Assessing Officer for making block assessment under section 158BC of the Act. 5. It is seen from the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot object against the auditor's report. We do not think any cross-examination is required to sustain the challenge against the findings of the auditor, if the same is otherwise tenable. Even though the assessee has not filed separate objection to the auditor's report, the counsel for the assessee submitted that the assessee filed serious objection before the officer for making assessment based on the report submitted by the auditor appointed under section 142(2A) of the Act. We find force in this contention because neither the first appellate authority nor the Tribunal has considered the assessee's challenge against the estimation of undisclosed income assessed by the officer based on the auditor's report. In our view, it was the duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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