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2011 (6) TMI 498 - HC - Income TaxSpecial auditor u/s 142(2A) - Block assessment - undisclosed income - can a block assessment be made on the report of the auditor appointed u/s 142(2A) ? - whether an appointment of an auditor u/s 142(2A) invalidate a block assessment completed under section 158BC? - Held that:- Appointment of an auditor u/s 142(2A) does not invalidate a block assessment completed u/s 158BC. Nothing in this section bars the AO to get audit of accounts seized by him in search proceedings. If the seized records disclose concealed income, the same obviously can be assessed in block assessment u/s 158BC r.w.s. 158BB. Hence, appointment of an auditor u/s 142(2A) is permissible for auditing the accounts seized from the assessee and such audit report and findings by the auditor could be relied on by the AO for making block assessment u/s 158BC. Also, after providing consent assessee cannot at a later stage object against the appointment of the auditor or reliance of the auditor's report in the assessment. In view of the consent given by the assessee for the appointment of an auditor by the Department,the assessee cannot at a later stage object against the appointment of the auditor or reliance of the auditor's report in the assessment. The challenge against the Tribunal's order on this ground cannot, therefore, be accepted. As neither the first appellate authority nor the Tribunal has considered the assessee's challenge against the estimation of undisclosed income assessed by the officer based on the auditor's report. Hence, assessee should be given one more opportunity to contest the assessment on quantum addition - Decided partly in favor of assessee for statistical purposes.
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