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TMI Blog2024 (6) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... as sought from and granted by the Pr. CIT only. AO has not extended the said time limit suo-moto. The ld. CIT (A) has also examined, the assessee s own case for AY 201213 wherein vide order dated 21.09.2020 in Appeal No. CIT(A), Delhi -7/10162/2019-20 on identical facts circumstances, it was held that the order of the AO as void ab-initio since due procedure as mandated under the provisions of Sec. 142(2A) Sec. 142(2C) has not been followed. The order of the AO and the procedure adopted for getting the special audit done u/s 142(2A) of the Act suffers from multiple infirmities. Accordingly, order of the Assessing Officer is held to be void ab-initio and the order of the ld. CIT (A) is hereby affirmed. - Sh. Kul Bharat, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For the Assessee : Sh. S. S. Nagar, CA For the Revenue : Ms. Sapna Bhatia, CIT-DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 11.08.2023. 2. Following grounds have been raised by the Revenue: i. Whether on the facts and in law, Ld. CIT (A) has erred in coming to a conclusion that orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) r.w.s. 144C of the Act on 24.08.2018 assessing the total income of the assessee at Rs. 208,31,63,890/-. 5. Core issue adjudicated by the ld. CIT (A) was, Whether the Pr. CIT has exceeded his jurisdiction in granting approval for the extension of the time limit for conducting special audit or not? 6. Before the ld. CIT(A), the ld. AR of the assessee contended that the Pr. CIT has exceeded his jurisdiction in granting approval for the extension of the time limit for conducting special audit. In support of his contention, the ld. AR has relied upon the decision of the jurisdictional ITAT in the case of ACIT vs. Soul Space Projects Ltd. in ITA No. 193/Del/2015, order dated 03.06.2020 as well as on the decision in the case of the Hon ble Delhi High Court in the case of CIT vs. SPL s Siddhartha Ltd. [(2012) 345 ITR 223 (Del.)]. 7. The provisions of Section 142(2A) which reads as under: If at any stage of the proceedings before him, the [Assessing] Officer, having regard to [the nature and complexity of the accounts, volume of the accounts, doubts about t correctness of the accounts, multiplicity of transactions in the accounts or specialized nature of business activity of the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 142(2C) of the Act as has been reproduced above. 10. After going through the arguments mentioned as above, the ld. CIT (A) held that the powers and the jurisdiction of the various authorities to implement the Income Tax Act stands clearly defined in the statute. The Hon ble Apex Court in the case of Anirudh Sinhji Karan Sinhji Jadeja vs. State of Gujarat [1995] 5 SSC 302 has held that if a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether. 11. The Hon ble jurisdictional High Court of Delhi in the case of CIT vs. SPL'S Siddhartha Ltd. [2012] 17 taxmann.com 138 (Delhi) again reiterated the above and held as under: 7. Section 116 of the Act also defines the Income Tax Authorities as different and distinct Authorities. Such different and distinct authorities have to exercise their powers in accordance with law as per the powers given to them in specified circumstances. If powers conferred on a particular authority are arrogated by other authority witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by the Assessing officer, with the previous approval of Chief Commissioner or Commissioner. In this case, there is no dispute that these directions have been given. Thus, the legislature clearly intended that initial direction shall be with the approval and after examination of the subject matter by the higher after prior approval of CIT, Central - II, New Delhi. Thereafter, proviso below Sec. 142 (2C) provides for the procedure for giving extension for completing the special audit task. It clearly provides that the Assessing Officer shall extend the said time period if the conditions as mentioned in the said proviso stands satisfied. Thus, while initial direction is to be given with the approval of CCIT / CIT, however, for extension, it is only the Assessing Officer who has to take a decision for extension. It is to be specifically pointed out that in Sec. 142 (2A) law mandates the prior approval of CCIT/ CIT, while in the proviso below Sec. 142 (2C), while to grant extension, the sole power is vested with the Assessing Officer. The statute u/s 142(2A) provides for special audit with the previous approval of the CIT is intended with an objective that the subject matter stands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 234A or section 234B. Further to mention, while levy of the penalty u/s 271AAB is the power of the Assessing Officer, the provisions u/s 274(2) mandates that the prior approval of the JCIT is required before levy of such penalty. Thus, we find that the statute has accorded implementation of the various provisions to specified authorities which cannot be interchanged. 20. A power which has been given to a specified authority has to be discharged only by him. Substitution of that officer/authority by any other officer, may be of higher rank, cannot validate the said order/ action. The extension could have been valid only if it had been given by the Assessing Officer after due application of mind and after examining the existence of circumstances as provided in proviso below Sec. 142 (2C), since, it has to be given only by competent authority. In this case, the extension has not been given by the Assessing Officer but by the CIT, Central-II and the Assessing Officer has only conveyed the approval, therefore, we hold that the extension given by the CIT, Central-II is beyond the powers vested as per the statute and accordingly the assessment completed after the due date is held to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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