BATA INDIA LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Court: Petitioner-assessee has in the instant writ application questioned the order of approval passed by respondent No. 1 contained in his communication dated November 8, 2001 being annexure P-21 whereby special audit under section 142(2A) of the IT Act has been ordered and decision taken to appoint an auditor.

(2.) The case of the petitioner is that there is no warrant to order special audit in terms of section 142(2A). It is the case of the petitioners that an audit has been conducted under the provisions of section 44AB and such report in prescribed form - 3CD has been furnished along with statutory audit report under the Companies Act, 1956. The assessing authorities have not found any fault either with tax audit report (section 44AB) or the statutory audit report. It is, therefore, contended that there was no material whatsoever before the respondent authorities on the basis of which they could be satisfied that the nature of the company's accounts was such or that the company's accounts were complex so that having regard to the interest of the revenue, it was necessary to have a special audit under section 142(2A) conducted. The impugned order for special audit, it has been strenuously urged, has been made on extraneous, irrelevant and collateral considerations, without application of mind and without the existence or satisfaction of the conditions precedent or forming the requisite opinion.

(3.) It is further contended by Mr. R.N. Bajoria, learned senior counsel, assisted by Mr. J.P. Khaitan, Mr. C.M. Ghorawal and Mr. Sandeep Chowdhury, learned advocates for the petitioner that all information have been furnished to the assessing officer along with the return of tax and all requisitions under section 142(1) and 143(2) of the Act have been complied with. The assessing officer did not call for nor examine the books of account. At no point of time, it is contended by Mr. Bajoria that the assessing officer required the company to produce any of the books of account regularly maintained by it and as such the assessing officer or the approving authority (CIT) did not have any occasion to examine such books of account of the petitioner company. It is, therefore, urged that the respondents could not have formed any opinion as required under section 142(2A) of the Act.