9911796707
TMI Blog2000 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... hed 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 provisions of section 142(2A) which reads as under: "(2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue, is of the opinion that it is necessary to do so, he may, with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below subsection (2) of section 288, nominated by the Chief Commissioner or Commissioner in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act." In that regard section 120 of the Act is also relevant which deals with the jurisdiction of the income-tax authority which provides as under: "120. Jurisdiction of income-tax authorities. - (1) Income-tax authorities shall e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase 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 case were that by an order dated March 20, 1998, the Assessing Officer being the Deputy Commissioner, Special Range-13, directed the petitioner to get the accounts audited in respect of points enumerated therein and furnish the report of the said special audit within a period of 150 days from March 18, 1998. It appears that prior thereto the proposal dated March 16, 1998 for special audit under section 142(2A), in the case of that petitioner was neither placed before the Chief Commissioner, the Chief Commissioner without granting any approval merely nominated Shri G. P. Agarwal, FCA, for the purpose of special audit on March 16, 1998. The single judge was perfectly justified by holding that before an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 reached a conclusion that the account books were of such a complex nature where an audit by a chartered accountant was necessary without looking into the account books. Assuming that the account books were not produced by the petitioners, it was contended, then the income-tax authorities could have imposed a penalty or initiated criminal proceedings against the petitioners. If this argument is accepted, then it would mean that the assessment of a particular year should wait, till a person who refuses to perform his obligation to produce his account books, is punished under the provisions of the Act. We are definitely of the view that such a fallacious argument would frustrate the assessment for purposes of paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner 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 of depositors exceeded Rs. 2 crores, it may be two and a half crores. There were more than 1,200 branches wherein the deposit had been made. It was not humanly and physically possible to scan the entire list of the depositors only to select such depositors whose deposits were in excess of Rs. 20,000. The petitioners admit that preparation of a list was an impossible task and wanted the income-tax authorities to draw the list if the same could be drawn from the account books of the petitioner. Whether the aforesaid averments made in the writ petition itself do not disclose the complexity of the accounts? At any rate it was a matter of satisfaction of the authorities concerned. The Assessing Officer has arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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