UTTARANCHAL WELFARE SOCIETY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Heard learned counsel for the parties and learned counsel for the Department.

(2.) The petitioner has prayed for a writ of certiorari quashing the appointment of respondent No. 4 as special auditor by the CIT, Ghaziabad, under Section 142(2A) of the IT Act.

(3.) We have gone through the averments in the writ petition. From a perusal of Annex. IX to the writ petition it appears that there are allegations of huge misappropriation of the society's funds directly or indirectly made by the assessee in favour of close relatives of the founder members of the society. Also fictitious expenses appear to have been claimed under the different heads of expenses debited in the income and expenditure account. The donations received by the assessee are also to be examined in the light of its proper utilisation for charitable purposes. The Addl. CIT, Range-2, Ghaziabad, was of the opinion that in the absence of the books of accounts, prima facie the income of property of the society is indirectly diversion of the funds for the benefit of persons referred to in Section 13(3) of the IT Act. The Addl. CIT, therefore, recommended that the AO may consider the case for special audit under Section 142(2A) of the IT Act keeping in view the suspicion that the funds of the society are being siphoned off by the members/trustees.