9911796707
TMI Blog2000 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on various dates by Shri M. C. Baurai, Deputy Commissioner, by means of which the petitioners were directed to get their accounts audited for the various assessment years mentioned in the impugned orders by the chartered accountant and furnish the report of such audit in the prescribed form duly signed and verified by the chartered accountant. In addition to the particulars prescribed in Form No. 6B read with rule 14A of the Income-tax Rules, 1962, the chartered accountant was asked to furnish the report on certain other points mentioned in the annexure enclosed as annexure A. The audit report under section 142(2A) of the Income-tax Act, 1961 ("the Act") should be furnished before the authority passing the order by April 30, 2000. The petitioners were to pay the audit fee which was tentatively determined. It was further provided in the impugned order that the amount in addition to other expenses incidental to audit was to be paid by the petitioners to the chartered accountants in accordance with law and procedure. Before dealing with the factual matrix as set out in the writ petition in short compass and the law on the subject, it would be relevant to glance over the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the account books which were never examined by the authority passing the impugned order. (d) Even after passing the impugned order, the account books which were produced by the petitioners show that the process of the examination of the account books has not yet been completed by the authority concerned. Mr. S.P. Gupta, the senior counsel appearing on behalf of the petitioners, laid emphasis on the facts that admittedly Mr. M.C. Baurai was the assessing authority, but as he went on leave and another officer, namely, Mr. M.K. Singhania had taken over, thus Mr. M.C. Baurai ceased to have any jurisdiction over that matter. Only Mr. Singhania, the Deputy Commissioner, could have passed an order purporting to be one under section 142(2A) but the impugned order was passed by Shri M.C. Baurai who had no jurisdiction to pass such an order. No doubt such an order purporting to be one under section 142(2A) could be passed by the assessing authority and the approval might be granted by the Commissioner or Chief Commissioner. The "Assessing Officer" as has been defined under section 2(7A) in the Act which means, "that the Assistant Commissioner or Deputy Commissioner or Assistant Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplementary counter-affidavit filed today, it was averred that Mr. Baurai ceased to have the jurisdiction of that area. Undoubtedly Mr. Baurai was the Deputy Commissioner. Mr. M.C. Baurai in his counter-affidavit filed in writ petition bearing No. 1291 of 2000 (MB) stated that he was posted as the Deputy Commissioner, Central Circle (IV) and holding jurisdiction of Central Circle-I, Lucknow, meaning thereby that he was having concurrent jurisdiction of Central Circle-I as well. The contention of Mr. S.P. Gupta, senior counsel, that he was not the actual Assessing Officer is misconceived inasmuch as both Mr. M.C. Baurai and Mr. Singhania have concurrent jurisdiction over the matter. The second phase of the argument of Mr. S.P. Gupta, appears to be, that it is one of the ingredients of section 142(2A) that the account books of an assessee should be complex in nature and an audit may be deemed necessary for the reason of the complexity of the account books of the assessee. In that regard reliance was placed on the pronouncement of the single judge of the Calcutta High Court in Peerless General Finance and Investment Co. Ltd. v. Deputy CIT [1999] 236 ITR 671. The facts of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut even the subjective satisfaction which may be arrived at by an authority, while passing an order, must be based on the basis of the objective materials from which the authority may arrive at his subjective satisfaction on the basis of objective materials while taking such an action. We need not delve into the question as to whether the Assessing Officer while passing an order under section 142(2A) may form a subjective satisfaction on the basis of the objective material or should arrive at a satisfaction in an objective manner, because it is not at all necessary at this stage. In the present case, we have to examine as to what would be the position, if the material on the basis of which the satisfaction may be arrived at is not produced by an assessee. In the present case, what transpires from the counter-affidavit, it appears to be, that the petitioners did not produce the account books which were asked for. It is evident from the impugned order itself and stated in the counter-affidavit that the impugned order was passed on the basis of the material which was available. The contention of Mr. S.P. Gupta, senior counsel, appears to be that the authority could not have reac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be drawn. The petitioner shall still have no objection if respondent No. 2 can draw a list of this kind from the account books of the petitioner. It was further averred in para. 27 of the writ petition that it was for the aforesaid reason that the auditors of the petitioner could not draw list of the depositors exceeding Rs. 20,000. As already submitted, drawing a list of this kind out of the deposits of more than 1,200 branches was, and is, an impossible task. In para. 32 of the writ petition again it was stated that the queries made by respondent No. 2 in three notices, referred to above, were such that the supply of the information sought by those queries could have taken several months. However, the petitioner complied with the queries with the fastest possible speed which could be attained having regard to the magnitude of the business of the petitioner. On the one hand, the petitioner states in Writ Petition No. 811 (MB) of 2000 that the petitioner had produced the books of account. On the other hand, he states that the respondents never examined and scrutinised the accounts books. The petitioner himself indicated the magnitude of his business by stating that the number o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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