COMMISSIONER OF INCOME TAX Vs. BAJRANG TEXTILES

JUDGEMENT

(1.) COMPLIANCE of the office objection is dispensed with. Office to register the appeal as regular appeal.

(2.) WE have heard learned Counsel for the appellant.

(3.) THE Tribunal after taking into consideration the record of proceedings and material on record has come to the conclusion that reference to the special audit under Section 142(2A) of the IT Act in the circumstances was not for the purpose for which the provision was enacted but merely for getting the extended period for completing assessment, which is not permissible under law. On the basis of this finding, the reference to the special audit was held to be illegal and consequently, the assessment order was held to be barred by time. There is no dispute about it that if the period reckoned for special audit which was directed to be conducted a day before the expiry of period of completing the block assessment, is not taken into account, the assessment order is clearly barred by time. The Tribunal found that merely because accounts and documents were voluminous, it is not taken to assume complexity so as to invoke the provisions of Section 142(2A) of the IT Act as a matter of course. The Tribunal also noticed that the AO has not merely referred the accounts to be audited under special audit by an auditor named by him, but he has directed the special auditor to prepare the books of account in the form of cash book, ledger, on the basis of documents/papers seized during the course of search as per his directions. The auditor was also required to prepare trading, P&L; a/c, which were recorded in the regular books of account and further to determine the undisclosed income of the block period.