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TMI Blog2024 (12) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and 2012-13. The appeals involve common question of law and facts therefore are taken up together for hearing and disposal. As for convenience the facts of AY 2010-11 shall be referred. 2. The brief facts of the case are that the appellant is a Limited company, engaged in trading and manufacturing of Fast Moving Consumer Goods (FMCG). The appellant had filed its return of income on 15-10-2010 declaring total income at Rs. 28,57,69,730/-. Subsequently, a revised return was filed on 09-07-2011. The case of the appellant was selected for scrutiny assessment. During the course of assessment proceedings, ld. AO observed that as considerable details/evidences were not forthcoming and as the appellant was failing to file most of the details/evidences despite availing several opportunities, the AO having reasonable doubt about the correctness of accounts maintained by the appellant issued a show cause notice dated 13-03-2013 to the assessee to explain as to why special Audit u/s. 142(2A) of the Act, should not be conducted, keeping in view the nature and complexity of accounts. After- consideration of the submissions of the appellant and after obtaining approval from' the Ld. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither contemplated nor mandated under the statute. It is further submitted that the CIT has no role to play in terms of Section 142(2C) and has exceeded his jurisdiction in specifying the period in which the Audit Report has to be submitted. For both the proposition as mentioned above, the appellant has placed reliance on the decision of the jurisdictional ITAT in the case of ACIT -vs.- Soul Space Projects Ltd. - ITA No.193/Del/2015 (Order dated 03-06-2020). (iii) That in terms of proviso of Sec.142(2C), the extension of further time period of furnishing the Special Audit Report u/s 142(2A) can be done by the Assessing Officer suo-motu or on an application made in this behalf by the assessee. It was submitted that in the present case, the extension of time period for furnishing the Special Audit Report u/s 142(2A) has been provided by the Assessing Officer on an application made by the Special Auditor in this regard. It is submitted that the extension has not been granted in terms of provisions of Sec. 142(2C) and therefore the extension so granted is beyond jurisdiction and Is time barred. (iv) That in terms of proviso of Sec. 142(2C), the extension of further period by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering the further extension of time allowed for Special Audit by the Department vide letter dated 07/08.02.2019" "ii. Whether on the facts and in law, Ld.CIT(A) has erred in dealing with the approval for Special Audit given vide letter dated 28.03.2013 and order for Special Audit dated 30.03.2013 which has already been approved by the Hon'ble High Court in Writ Petition (Civil) 2591/2013." "iii. Whether on the facts and in law, Ld.CIT(A) has erred in finding fault with the merged order of the A.O. with the order of Hon'ble High Court ordered vide order dated 06.12.2018 in Writ Petition (Civil) 2591/2013" "iv. Whether on the facts and in law, Ld.CIT(A) has erred in coming to a conclusion that order for Special Audit u/s 142(2A) was passed just before the time barring period and hence it is simply a tool for extension of time whereas the action of the department was approved by the Hon'ble High Court as regards existence of pre-conditions for Special Audit involved in this case v. "Whether on the facts and in law, Ld.CIT(A) has erred in finding fault with satisfaction recorded by the Ld. CIT whereas it was imperative for the CIT to do so as per requirement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al ITAT decision in the case of Unitech Limited -vs.- Addl. CIT - ITA No. 5180 of 2013 to hold that directions for special audit at the fag end of assessment time barring, is fatal. 6.3 Ld. CIT(A) also held that in terms of Section 142(2A), of the Act, the satisfaction for reference to Special Audit has to be recorded by the AO and nobody else. In the present case, the satisfaction has been recorded by the AO and indirectly by the CIT as well and then approved by the CIT himself. Thus same was also considered to hold that order of special audit is illegal. 6.4 Further, Ld. CIT(A) considered that in terms of Section 142(2C) of the Act, every report under sub-section (2A) shall be furnished by the assessee to the Assessing Officer within such period as may be specified by the Assessing Officer. In the present case the original period of furnishing the audit report has been specified by the CIT. So, Ld. CIT(A) was of view that such a scenario is neither contemplated nor mandated under the statute. Ld. CIT(A) accordingly held that the period in which the Special Audit Report u/s 142(2A) needs to be submitted has to be to be specified by the Assessing Officer and not by the CIT. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Assessing Officer, is to "extend the period" or conveying the "approval of the CIT". While it may be an administrative phenomenon to intimate, inform the CIT about the fact of the special audit party appointed seeking extension, but statutorily that power is vested with the Assessing Officer. On going through the established judgment, it cannot be disputed that the statutory powers vested with one specified authority cannot be i exercised by another authority unless and until the statute provides for the same. And we find that. the extension has not been given by the Assessing Officer. The powers and the jurisdiction of the various authorities to implement the Income Tax Act stands clearly defined in the statute. For example, the power to approve, the accounts audited u/s 142(2A) lies with CIT/PCIT/CCIT or PCCIT. The powers u/s 144A are to be exercised by the Joint Commissioner or Additional Commissioner. The powers u/s 251 are specific to the Commissioner (Appeals). Similarly, the powers u/s 263 and 264 are to be exercised by the PCIT/CIT. Further, in exercise of the powers conferred under clause (a) of sub-section (2) of section 119 of Income-tax Act, 1961, Central Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) that in terms of proviso of Sec.142(2C), the extension of further time period of furnishing the Special Audit Report u/s 142(2A) can be done by the Assessing Officer suo-motu or on an application made in this behalf by the assessee. However, in the present case the extension of time period for furnishing the Special Audit Report u/s 142(2A) has been provided by the Assessing Officer on an application made by the Special Auditor in this regard. The extension has not been granted in terms of provisions of Sec. 142(2C) and therefore the extension so granted is beyond jurisdiction and is time barred. We are of considered view that there is no error in the findings of ld. CIT(A) that the statute demands that the extension can be granted either by the AO suo-moto or on an application made in this behalf by the assessee. Admittedly, in the present case, the AO has granted extension for conducting Special Audit vide his letter dated 27-03-2019 addressed to the Special Auditor, M/s Sanjay Satpal & Associates. Such an action by the AO is certainly in disregard of the provisions of proviso to Section 142(2C) of the Act, and CIT(A) has committed no error in holding that this extens ..... X X X X Extracts X X X X X X X X Extracts X X X X
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