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2019 (9) TMI 734 - HC - Income TaxSpecial audit u/s 142(2A) - as per the AO the questionnaire was remain conclusively unanswered - contention of the Petitioner was that there was no complexity in the books of account which would warrant the Respondent No. 1 to direct special audit - denial of natural justice - HELD THAT:- on the basis of the reasons recorded in the impugned order, it cannot be said that there was no genuine attempt on the part of the Assessing Officer to understand the nature of his business, its method of accounting, or to understand the nuances of the books of accounts or documents. The impugned order clearly reflects the reasons for ordering a special audit. AO initially issued a notice under Section 142(1) on 03.08.2018 along with detailed questionnaire including the reason for selection of case for scrutiny under Section 143 (3). Thereafter, a fresh notice under Section 142 (1) was issued on 30.10.2018 along with pending and fresh queries. Since there was continued non compliance, a show cause notice in respect of specific queries raised therein was issued on 30.05.2019. Another notice dated 03.06.2019 in the form of corrigendum to show cause notice was issued, calling upon the Petitioner to produce the books of accounts. The questionnaire raised by the Assessing Officer was not specifically answered, and if the same had been satisfactorily answered, he would have found the same to be useful for verification of various claims made by the assessing companies in its return of income for the assessment year under consideration [AY 2016-17]. Petitioner was given sufficient opportunity of being heard. Thus, the contention of violation of principles of natural justice is also without merit. . Sections 142 (2A) (2D), 142 (3) and 142 (4) are the relevant provisions dealing with the considerations that are to be weighed while directing special audit. The Supreme Court has also laid down the guiding principles relating to conduct of special audit. In essence, the Supreme Court has underlined that the opinion required to be formed must be based on objective criteria, and not subjective satisfaction. On a reading of the impugned order, it is demonstrated that the Assessing Officer has examined the objections raised by the Petitioner and has exercised his jurisdiction objectively on due consideration of the records, documents and other material before him for ordering a special audit. There is no perversity or arbitrariness in the order of the Assessing Officer. On careful perusal of the afore-noted reasons spelt out in the impugned order, we are of the considered opinion that the Assessing Officer has carefully scrutinized the objections raised by the Petitioner and has fairly and objectively arrived at the conclusion that special audit is required - no infirmity in the order directing the special audit - Decided against assessee.
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