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2017 (4) TMI 1457 - HC - Income TaxSpecial audit u/s 142(2A) - requirement for exercising the powers under Section 142(2A) - HELD THAT:- The object and purpose of special audit under Section 142(2A) of the IT Act and considering the object and purpose of amending section 142(2A) and looking to the multiplicity and complexity of transactions found from 40000 papers / material requisitioned from 42 gunny bags, it cannot be said that the impugned order is absolutely illegal and/or contrary to section 142(2A) of the IT Act. The impugned order has been passed on 15.12.2016 and the present petition has been filed on 20.02.2017. It is reported that there is a non-cooperation on the part of the petitioner again and even he has not cooperated the Special Auditor also. It is reported that on the basis of the material available, the Special Auditor has as such prepared a report. However, because of the pendency of the petition, no further steps are taken. In any case as observed hereinabove, there is no illegality committed by the AO in ordering the special audit under section 142(2A) of the IT Act. Whether Assessing Officer cannot direct special audit under Section 142(2A) of the IT Act before calling for the accounts from the petitioner in the assessment proceedings and without doubting the accounts and/or considering the complexity in the accounts - it is required to be noted that as per amended Section 142(2A) of the IT Act, apart from the nature and complexity of the accounts, etc., even in case of multiplicity of transactions or otherwise nature of the business activity of the assessee and in the interests of the Revenue, the Assessing Officer can pass an order for special audit, in exercise of powers under Section 142(2A). Therefore, while forming an opinion to get the accounts audited by Special Auditor; considering the specialized nature of business activities of the assessee, and/or while considering the multiplicity of transactions, there need not be any books of account before the Assessing Officer. In the present case, AO has thought it fit to get the account audited by the Special Auditor as requisitioned material are to the extent of 40,000 papers in 45 gunny bags, which were found during the search conducted of the premises of Asharam Bapu and others and the Trust. When large number of papers are required to be considered / verified visavis the assessee and other persons whose names figured in the requisitioned papers, and when considering section 142(2A) when the the Assessing Officer has thought it fit to exercise powers under Section 142(2A) of the IT Act, it cannot be said that the Assessing Officer has committed any error and/or illegality. Specific reasons are given so mentioned in the showcause notice as to why and for what purpose the special audit is required. Therefore, in the facts and circumstances of the case, it cannot be said that the Assessing Officer has committed any error and/or illegality in passing the impugned order of special audit, in exercise of powers under Section 142(2A) of the IT Act. With respect to other assessees who are alleged to be connected with Asharam Bapu and Narayan Sai Group, on the very ground order under Section 142(2A) of the IT Act has been passed by the concerned Assessing Officer and the petitions ULHAS SECURITIES PVT. LTD VERSUS DEPUTY COMMISSIONER OF INCOME TAX [2017 (3) TMI 113 - GUJARAT HIGH COURT] challenging the order of Special Audit under Section 142(2A) of the IT Act have been dismissed by this Court. No reason to interfere with the impugned order passed by the Assessing Officer ordering special audit under Section 142(2A) of the IT Act in exercise of powers under Article 226 of the Constitution of India.
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