GHAZIABAD DEVELOPMENT AUTHORITY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The present petition is by an Authority constituted under the U.P. Urban Planning and Development Act, 1973.

(2.) The assessment year involved in the present case is the assessment year 2003-04 (Finance year 2002-2003). Prior to 1.4.2002, the entire income of the Petitioner was exempted from the purview of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') by virtue of Section 10(20A) of the Act. 2003-2004 is the first assessment year when the Petitioner is made liable to tax under the Act. The Petitioner filed its return of income for the assessment year 2003-04 on 1.12.2003 showing a loss. After taking the case in scrutiny, a notice under Section 143(2) of the Act was issued on 14.10.2004. The Petitioner complied with the said notice and appeared on various dates before the Assessing Authority through its Chartered Accountant and filed various replies supported with various voluminous documents and records to the queries made by the Assessing Authority. The period for making the assessment was due to expire on 31.3.2006.

(3.) By a communication of 10.3.2006, an order came to be passed under Section 142(2A) of the Act by Respondent No. 3. appointing M/s Bansal Gupta & Associates, Chartered Accountants as Special Auditor with the prior approval of the CIT, Ghaziabad. No notice was issued to the Petitioner while directing the special audit by M/s Bansal Gupta & Associates. The Petitioner complied with the said notice and appeared on various dates before the Assessing Authority through its Chartered Accountant. It may be necessary to mention that order dated 10.3.2006 was received by the Petitioner on 21.3.2006. The Petitioner through its Chartered Accountant on 29.6.2006 requested an extension of further ten days for submitting the report. The Respondent No. 3 extended the time for M/s Bansal Gupta & Associates to furnish their report by a further period of 30 days, i.e. up to 6.8.2006 instead of 10 days as requested. On 7.8.2006, the Respondent No. 3 once again suo-motu extended time of M/s Bansal Gupta & Associates to furnish audit report by a further period of 20 days, though no such request or application was made by the Petitioner. It appears that a further extension of 10 days was given on 25.8.2006. M/s Bansal Gupta & Associates the Special Auditors had furnished the audit report on 4.9.2006. The Petitioner, it appears has preferred an appeal against the aforesaid order, which is pending before the ITAT, New Delhi. The impugned assessment order was passed on 31.10.2006. This was considering the proviso to explanation 1 of Section 153, which provides that where immediately after the exclusion of the aforesaid time, the period of limitation available to the Assessing Officer for making an order of assessment is less than 60 days, the remaining period is extended to 60 days. The proviso to Sub-section (2C) of Section 142 empowers the Assessing Officer to extend the period of the special auditor subject to maximum 180 from the date on which the direction of Sub-section (2A) is received by the Assessee.