JHARNESHWAR NAGRIK SAHAKARI BANK Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS writ petition has been filed by the petitioner co-operative bank as against the order (P-3), dt. 29th Jan. , 2004 passed by Asstt. CIT, in exercise of power under Section 142 (2a) of IT Act directing the petitioner to get the accounts audited by auditor/respondent No. 4. Petitioner has also prayed for quashment of order (P-5) dt. 25 thvfeb. , 2004 passed by respondent No. 2 refusing to withdraw the directions under Section 142 (2a ). A notice (P-2) dt. 6th Jan. , 2004 was issued under Section, 158bc by respondent No. 3 for furnishing a return for block period.

(2.) IT is averred in the petition that petitioner is a registered co-operative society and its income is fully exempt under Section 80p (2) (a) (i) of IT Act. On 21st Feb. , 2002 search operations were carried out at the premises of the petitioner-society in which 13 numbers of loose papers were seized. The limit of completion of assessment was two years. Period was to expire on 28th Feb. , 2004. Respondent No. 3 remained dormant for 22 months. Only at the fag end of the period of limitation on 6th Jan. , 2004 initiated assessment proceedings by issuance of notice under Section 158bc. On 29th Jan. , 2004 respondent No. 3 passed an order directing the petitioner to get the account audited by the auditor appointed by the Department. Such a direction can only be given after application of mind and examination of books of account. At no point of time account books have been examined, thus order is illegal.

(3.) IT is further averred that Section 158bc provides for extension of time for completion of assessment in cases when accounts have been referred for auditing under Section 132 of the Act. The entire exercise is undertaken by the respondent No. 3 just to get more time for completion of the assessment. Petitioner has approached the respondent No. 2, CIT. Application for direction under Section 142 (2a) has been dismissed summarily. Petitioner has further pointed out that cost of audit has to be borne by the petitioner. Accounts have been audited, reports have been filed. Return of the income-tax was filed at the relevant time. Thus, petitioner has been saddled with the unnecessary financial burden and time consuming exercise. Order is without any basis and lacks objectivity.