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TMI Blog2013 (7) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... al was legally correct in not taking into account the law as laid down by the Apex Court in the case of Rajesh Kumar vs. Dy. CIT reported in (2006) 287 ITR 91, while deciding the cross appeals preferred by the parties before it, in relation to the assessment order dated 09.11.2004? iii. Whether on a due and correct interpretation of the provisions of sub-section (3) of Section 145, the Tribunal was legally correct in upholding the rejection of accounts and in sustaining extra addition of Rs.5.0 lacs." iv. The Tribunal while interpreting Section 10 of Income Tax Act 1961 was wrong in recording finding that persons exempted under Section 10 of the Act are not required to computate its total income in accordance with the provisions of the Act, which may include the computation of depreciation on written down value and not in any other manner?" The brief facts of the case are that the assessee/appellant has been carrying on business of electronic goods, appliances and other commodities from last 40 years. The books of accounts are subjected to the tax audited as per section 44 AB of the Act. For the assessment year under consideration, the case of the assessee was picked up for scru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report under section 152 (2A) of the Act and submit a report within a period of 90 days. So, the accounts were audited by M/s. D. & Pathak Company, Chartered Accountant. After completing the audit, a report was submitted within a period of 90 days from the date of receipt of the direction. In the meantime, the limitation for completion of assessment as prescribed under section 153(1) (b) had already expired. So, the assessment order dated 09.11.2004 passed by the A.O. under section 143 (3) is time barred and the same is likely to be set aside. For this purpose, he relied on the decision dated 20.08.2010 passed by this Hon'ble Court in the case of his sister's concern namely - M/s Sadana Electric Company vs. Commissioner of Income Tax and another (ITA No.167 of 2008). For this purpose, he relied on the ratio laid down in the case of the Sahara India (Firm) vs CIT; (2008) 300 ITR 403 SC, where it was observed that an order under Section 142 (2A) of the Income Tax Act, 1961 directing the assessee to get the accounts audited by an accountant nominated in this behalf by the Chief Commissioner or the Commissioner and to furnish a report of such audit, does entail civil consequences. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries made therein and, in the event of doubt, seek explanation from the assessee. The opinion required to be formed by the Assessing officer for exercise of power under section 142 (2A) must be based on objective criteria and not on the basis of subjective satisfaction. Recourse to that provision cannot be had by the Assessing Officer merely to shift his responsibility of scrutinizing the accounts of an assessee and pass the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner, being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer casts a very heavy duty on the said high ranking authority to see that the requirement of previous approval is not turned into an empty ritual. Before granting approval, the Chief Commissioner or the Commissioner, as the case may be, must have before him material on the basis whereof an opinion in this behalf has been formed by the Assessing Officer. The approval must reflect the application of mind to the facts of the case. Rules of natural justice are not embodied rules. The expression "natural justice' is also not capable of a prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Appellate Tribunal, Lucknow Bench, Lucknow rejecting the appeal of the assessee-appellant against the order dated 23.8.05 passed by the Commissioner of Income Tax (Appeals)-I, Kanpur. Challenge has been made on the ground that the entire proceedings of assessment were totally without jurisdiction and authority, as the assessment orders were passed beyond the period of two years, as prescribed under Section 153(1)(a) of the Income Tax Act. The following substantial questions of law arise in the appeal: 'Whether on the facts and circumstances and legal aspects of the case the assessment order dated 26.10.2004 itself, passed without jurisdiction is a nullity, in view of the settled principles of law as well as statutory provision of the clause (a) of Sub Section (1) of Section 153 of Income Tax Act,1961?' The return of income for the assessment year 2001-02 under Section 139 was filed on 31.10.2001. It was processed under Section 143(1) on 26.12.01. The return was selected on 28.1.02 for scrutiny under Section 143(3) and the notice under Section 143(2) was issued, which was duly served on the assessee on 13.2.02. The assessment year 2001-02 came to an end on 31.3.04. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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