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2014 (5) TMI 855 - HC - Income TaxValidity of direction of special audit – Failure to produce books of accounts - Held that:- At various stages of the assessment for AY 2011-12, sufficient opportunities were granted to the assessee to produce the tax audit report u/s 44AB of the Act and besides it, the books of account, bills and vouchers as well as the annual audit report for justifying the claim u/s 80-IB(10) of the Act - Once after the grant of a reasonable opportunity to the assessee as required by law, the AO has indicated the material on the basis on which he has come to the conclusion that a special audit was necessary, it would not be open to the Court to test the sufficiency of the grounds - the Court would be justified in interfering in a case where there has been a breach of the procedural requirement of complying with the principles of natural justice or where there is absolutely no material whatsoever to sustain the conclusion that the grounds which have been relied upon do exist. The CIT (Central), Kanpur, as well as the AO have furnished cogent reasons for holding that the grounds which are stipulated in Section 142(2A) of the Act have been duly established - the assessee had failed to produce the books of account, that does not leave the AO with a recourse to Section 145A of the Act as the only available means to determine the income of the assessee for the purposes of an assessment - the requirement contained in Section 142(2A) of the Act about the specialized nature of the business activity of the assessee is broad enough to comprehend the facts - The assessee consistently obstructed the assessment proceedings by refusing to produce relevant information which was in its possession ostensibly because there was a dispute in the Management before the Company Law Board - The AO was justified in holding that the interest of the revenue had to be protected by ordering a special audit – thus, there was no reason to interfere in the order – Decided against Assessee.
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