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2015 (10) TMI 258 - HC - Income TaxTransfer of jurisdiction to Assistant Commissioner of Income Tax challenged - urged as no notice or opportunity of hearing was given - validity of order of ACIT directing to conduct a special audit under Section 142(2A) of the Act - Held that:- This Court is of the opinion that the impugned order dated 23rd September, 2008 passed by the Commissioner of Income Tax-VIII, New Delhi transferring the case to the Assistant Commissioner of Income Tax, Meerut was patently illegal and in gross violation of the principles of natural justice. It was imperative for the authority to give notice and an opportunity of hearing to the petitioner before transferring the case under Section 127 of the Act, which in the instant case has not been done. Therefore, the impugned order dated 23rd September, 2008 as well as the corrigendum dated 26th October, 2009 issued by the Commissioner of Income Tax-VIII, New Delhi under Section 127 of the Act cannot be sustained. In the light of the aforesaid, all consequential proceedings initiated by the Assistant Commissioner of Income Tax, Meerut by issuance of notice dated 30th October, 2009 and the notice dated 7th December, 2009 and the consequential order dated 18th December, 2009 directing to conduct a special audit under Section 142(2A) of the Act being without jurisdiction also cannot be sustained. In our opinion, it is necessary and essential for the authority to give reasons indicating the complexity of the accounts and the need to get the accounts audited under Section 142(2A) of the Act. We also find that an identical order was issued to another assessee which order was quashed by this High Court on the ground that no reasons had been given. An order dated under Section 142(2A) of the Act entails civil consequences and, an order is required to be passed upon an application of mind and with due care. Complexity of the accounts can only be judged upon a perusal of the books of accounts and after inviting explanation from the assessee. If the books of accounts are not perused, the question of complexity cannot be judged. We are of the opinion that an order under Section 142(2A) cannot be passed on the basis of the seized material unless the assessee failed to produce books of accounts, which in the instant case has not happened, inasmuch as no hearing took place on 4th December, 2009 on the date when the petitioner was required to produce the books of accounts. For the reasons stated aforesaid, the order dated 23rd September, 2008 passed by the Commissioner of Income Tax, Delhi-VIII, New Delhi and the corrigendum issued by the said authority on 26th October, 2009 are quashed as a consequence thereof notices issued under Section 153A of the Act dated 30th October, 2009 issued by the Assistant Commissioner of Income Tax, Meerut as well as the notice dated 7th December, 2009 and the order dated 18th December, 2009 issued by the said authority under Section 142(2A) of the Act are quashed. - Decided in favour of assessee.
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