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TMI Blog2013 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus discrepancies in maintaining the accounts have been pointed by the Comptroller & Auditor General of India. With regard to the satisfaction of the Assessing Authority, while referring the matter under Section 142 (2A) it is not only the books of accounts, but even by other documents which are available during the course of an assessment and at any stage subsequent thereto may become available to the Assessing Officer. Further, it is settled principle of law that while exercising its jurisdiction under Article 226 of the Constitution of India, the High Court does not sit as a Court of appeal and a patent illegality or lack of inherent jurisdiction in passing the impugned action/letter would be a limited ground for invoking the jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t books were duly accepted but while going through the account books as well as the reports of the Comptroller Auditor General of India and the Accountant General and the auditor's report submitted by Asija Associates, during the assessment proceedings for the Assessment Year 2010-11, the Assessment Officer noticed certain discrepancies which are complex in nature and not understandable and as such, the Assessing Authority after obtaining necessary approval from the competent authority, issued a show cause notice under Section 142 (2) (A) for appointment of a Special Auditor for examining the books of accounts to which reply was tendered, but the reply so tendered was not found satisfactory and as such, orders were passed for appointmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paid to various agencies, namely, Gupta Construction Works, Siddharth Enterprises, Lucky Construction, Arti Construction Co. and Alok Singh Bhadoria were only handmade vouchers, without supporting bills. He has drawn our attention towards the discrepancies pointed out by the Comptroller and Auditor General of India, which read as under:- "1. Balance Sheet - Reserves Surplus Rs.68.02 Crore Reference is invited to para no.3.3 of the CAG's Audit Report no.4 Commercial for the year ended 31 March 2010, Government of Uttar Pradesh. It was pointed out therein that during the year 2005-06 to 2007-08, the Company treated an amount of Rs.23.68 crore being interest on Government's funds as the Corporation's income in violation of Government O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebts pertaining to dues outstanding against U.P.Bhumi Sudhar Nigam Ltd. amounting Rs.41.52 lakh not acknowledged by the latter. This has also resulted in understatement of provision for doubtful debts and overstatement of profits for the year by corresponding amount." Mr.D.D. Chopra, learned Counsel further submits that the discrepancies pointed out by the Comptroller Auditor General of India find place in the Director's report. Even the auditors while auditing books reported as under:- "(c) Non-compliance of Accounting Standards Non compliance of Accounting Standards is as under AS-7 : Accounting For Construction Contracts (revised) The Corporation is not disclosing the following compliances although required as per the disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority before passing the impugned order for appointment of Special Auditor has made genuine attempt to understand the accounts so maintained. In the case of Delhi Development Authority and another versus Union of India and another (supra) relied upon by the petitioner's Counsel, the Apex Court while dealing with the provisions of Section 142 (2A) of the Income Tax Act has held that it is not open for the Assessing Authority for referring the matter to the Special Auditor, where legal issues are involved, as such, nature and character of land, payments received and the treatment of the payments receipts or expenditure in the books for the purpose of taxation. The special auditor cannot go into and examine the legal issue or question re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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