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2013 (6) TMI 276 - HC - Income TaxAppointment of special auditors u/s 142(2A) - Complexities - Assessment u/s 153A - period of limitation u/s 153B - extension due to appointment of auditor u/s 142(2A) - Search and seizure - Held that:- it is admitted that the limitation after its statutory curtailment to 21 months was going to expire on 31.12.2009. It is also admitted that if the powers under Section 142 (2A) are exercised, in accordance with law, the limitation would get extended under Explanation (ii) of Section 153B (1) (a), upto the period of completion of special audit and with 60 days for completing the assessment. Reason for delay - The petitioner had invoked the powers of the High Court under Art.226 of the Constitution of India in challenging the directions under Section 142 (2A) of the Act for special audit, on the ground that no reasons were given in the order. The petitioner relied on the principles of natural justice to challenge the order. The prescription of limitation by itself should not be permitted to confer an advantage on the petitioner responsible for such delay. Appointment of auditors u/s 142(2A) - Complexities of accounts - held that:- The principles on which accounts may be treated to be inaccurate or complex have been sufficiently explained in Sahara India [2008 (4) TMI 4 - Supreme Court] and do not require any reiteration. In the present case we are of the view that the petitioner companies are engaged in large scale tax evasion, and for that purpose it was adopting dubious methods in maintaining the accounts, which were examined and were found to be complex by the Assessing Officer. He made a genuine attempt to understand the method of calculation of the value of the flats, which were being changed frequently by the assessee and having failed to understand the manner and method in which accounts were maintained firstly required the petitioners to explain and having faced an uncooperative attitude directed special audit to be carried out by special auditor. We do not find any legal error in the order directing the petitioners to get their accounts audited by special audit or appointed by the Commissioner of Income Tax, for which the cost is now to be paid by the Central Government and thus the exercise would not cause any prejudice to the petitioners. No merit in submission of the petitioners that in such a case it was open to the A.O. to proceed with the best judgment assessment under Section 144 and that the submission of incomplete accounts or the refusal to disclose true and correct accounts cannot be a ground for special audit under Section 142 (2A) of the Act. The interim order was obtained by concealing relevant documents, which were indexed but were not annexed to the writ petition, and were sought to be introduced at the time of final hearing on the pretext of inadvertence. Shri Deepak Kapoor was present before the Assessing Officer on 19.11.2009 and had produced complete list of books of accounts and print outs of the books of accounts as maintained by the assessee on computer along with a letter. He did not mention about these dates either in the list of dates along with writ petition, or in the list of dates provided by him to the senior counsel at the time of hearing. Shri Deepak Kapoor is prima facie guilty of professional misconduct in misleading the Court. He also misled Mr. S.P. Gupta, a Senior Counsel of the Court, who was cautioned time and again to be more precise in his submissions. He seems to think that the time of the Court is at his mercy, and consumed almost eight hours in explaining the facts, which was full of inaccuracies and repetition. In the special facts and circumstances of the case, we impose exemplary costs of Rs.Two lacs on the petitioner in Writ Petition No.418 of 2010, and Rs.One lac in Writ Petition No.339 of 2010 to be deposited by the petitioners with the Registrar General of the Court within one month. - Decided against the assessee.
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