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2020 (1) TMI 655 - HC - Income TaxSpecial audit u/s 142(2A) - scope of satisfaction recorded by the AO - reasonable opportunity provided to assessee or not? - HELD THAT:- We cannot hold that there is no application of mind on the part of the respondent No.1 for issuing the impugned directions. In our opinion, the satisfaction recorded by the AO is in consonance with the principles enunciated in Section 142(2A) of the Act. The doubts expressed by the AO are on the basis of the complexity of the accounts recorded upon objective considerations mentioned in the impugned order on each query. Though the petitioner has sought to explain all the queries so raised in the present petition, however, we feel that it is not in our jurisdiction to go into the accounts and the audit report and discuss the same. Respondent No.1 has applied his mind and the anomalies and discrepancies that have been pointed out in the impugned order, to our mind are sufficient to meet the test of judicial review while questioning the subjective satisfaction for appointment of special auditor. In our opinion, the aforesaid reasons are sufficient to sustain the action of the respondent to order a special audit in view of the limited and guarded scope of judicial review. AO has given several other opportunities to the petitioner by calling upon them to furnish their response along with documentary evidence. After issuing statutory notice dated 13.09.2019, another opportunity was given on 27.09.2019, when there was a change of the incumbent in office of the respondent No.1. Also, notices u/s 142(1) along with questionnaire were issued to the assessee on 02.08.2019, followed by a reminder on 26.08.2019. Despite aforesaid opportunities, the assessee was unable to answer the queries raised by the respondent to the satisfaction of the AO. In the impugned order, the AO has threadbare considered each response to the queries raised and concluded that the accounts of the petitioner are voluminous and complex. No substance in the petitioner’s submission that the action of respondent No.1 is mala fide or is an outcome of failure to pay the advance tax to the lacking of respondents’ authority. Such submissions are based on conjectures and surmises and in absence of any cogent material to support this assumption, we refuse to entertain such a plea. Equally, we find no merit in the submissions of the petitioner that the respondent No.1 has interpolated the record. The essential mandate of Section 142(2A) requires an opportunity of hearing, which in the present case has been met for the reasons discussed in detail hereinbefore. Petitioner does not dispute that notice dated 13.09.2019 was served upon the petitioner. Resultantly, it had an opportunity to put forth its case and objections for ordering special audit. Once this requirement is fulfilled and the petitioner tendered its reply thereto, the prerequisite under the Act was met. - Decided against assessee
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