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TMI Blog2018 (9) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No.1, read with referral letters dated 17.11.2017, passed by the respondent No.1, show cause notice dated 30.11.2017 and the approval dated 22.12.2017 given by the respondent No.2 (Principal Commissioner of Income Tax Central Circle, Bhopal, Ministry of Finance, Deptt. of Revenue, wherein the proceedings for special audit under Section 142(2A) of the Income Tax, 1961 (hereinafter referred as 'the Act') have been ordered for and initiated against the petitioner for the Assessment Year 2010-11 to 2016-17. For the sake of convenience the facts are borrowed from W.P. No.7999/2018. 2. This order shall disposed of all the above thirteen writ petitions, as common questions of law arise there from, on somewhat similar facts for consideration of this court. 3. The petitioner is a member of various association of persons and is deriving profit / loss from these association of persons. The search and seizure operation under Section 132 of the Act was conducted in different premises of the Shivhare group on 07.01.2016, including the business premises of the petitioner and residential premises of its Directors. The case was subsequently centralized under Section 127 of the Act wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated 30.11.2017 and letter dated 11.12.2017. The petitioner replied to it vide its reply dated 11.12.2017 and prayed for time to file detail submissions. The proviso to Section 142(2A) mandates that the opportunity has to be given to the assessee. The respondent No.2 (Principal Commissioner of Income Tax Central Circle, Bhopal, granted two opportunities to the petitioner before making reference to the special auditor. 6. The Principal Commissioner of Income Tax vide letter dated 22.12.2017 communicated to Assessing Officer that due opportunity was granted to the petitioner on the issue and the approval for special audit is accorded after careful consideration of the facts. The Assessing Officer after receiving the approval gave direction to the petitioner to get his Accounts audited from the special auditor nominated by the Principal Commissioner of Income Tax Central, Bhopal in this behalf. 7. The petitioner is challenging the ordered action of the respondents No.1 and 2 and order for special audit passed by the respondent No.1 on 22.12.2017 on the ground that the Assessing Officer has failed to give any opportunity, much less of reasonable opportunity of hearing, to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below sub-section (2) of Section 288, nominated by the Principal Chief Commissioner or Chief Commissioner or Principal 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 such particulars as may be prescribed and such other particulars as the Assessing Officer may require : Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard. 10. The Apex Court in the case of Sahara India (Firm) V/s. CIT, Central - I (supra) in para 6 of its judgment has observed thus :- "6. A bare perusal of the provisions of sub-section (2A) of the Act would show that the opinion of the Assessing Officer that it is necessary to get the accounts of assessee audited by an Accountant has to be formed only by having regard to: (i) the nature and complexity of the accounts of the assessee; and (ii) the interests of the revenue. The word "and" signifies conjunction and not disjunction. In other words, the twin conditions of "nature and complexity of the accounts" and "the interests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial audit. It is well settled that the principle audi alteram partem can be excluded only when a statute contemplates a post decisional hearing amounting to a full review of the original order on merit, which, as explained above, is not the case here. 24. The upshot of the entire discussion is that the exercise of power under Section 142 (2A) of the Act leads to serious civil consequences and, therefore, even in the absence of express provision for affording an opportunity of pre-decisional hearing to an assessee and in the absence of any express provision in Section 142 (2A) barring the giving of reasonable opportunity to an assessee, the requirement of observance of principles of natural justice is to be read into the said provision. Accordingly, we reiterate the view expressed in Rajesh Kumar's case (supra). 14. As per Section 142(2A) of the Act the only requirement is that if in the opinion of the Assessing Officer the case is required to be audited by Special Auditor than the Assessing Officer must convey the opinion to the Principle Commissioner of Income Tax and after the approval is granted by the Principle Commissioner of Income Tax then Assessing Officer may iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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