TMI Blog2007 (9) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the block assessment order was barred by time. 2. not accepting the opening balance of Rs. 4,50,000 which had been received by the appellant in 1982 as compensation for vacating the tenanted premises. 3. without prejudice to Ground No. 2 above, confirming the addition of Rs. 1,90,000 in respect of opening balance, which had been invested prior to the commencement of the block period. 4. confirming the addition of Rs. 1,20,000 in respect of gifts received by the appellant from various relatives. 5. confirming the addition of Rs. 1,10,000 on account of alleged low withdrawals. 6. confirming the addition of an amount of Rs. 2,50,000 under section 41(1) of the Act. 7. confirming the action of the learned Assessing Officer that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was duly served on the assessee on May 7, 1999. The assessee went on asking for extension of period for completing his audit from M/s. Chokshi and Chokshi. By letter dated May 5, 1999, the assessee was asked to get the case audited within 60 days on receipt of that letter directing him to get his case audited under section 142(2A). Before the end of this stipulated period of 60 days, the assessee applied for extension of the period of audit by two months by his letter dated July 5, 1999, which was granted by this office letter dated July 5, 1999. The assessee again asked for a further extension of two months by his letter dated August 26, 1999, which was also granted on the same date. Thus, the period of audit was spread over a span of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D 188 (Mad) ; and (8) Peerless General Finance and Investment Co. Ltd. v. Deputy CIT [1999] 236 ITR 671 (Cal). The Commissioner of Income-tax (Appeals), however, did not accept the assessee s contention. He held that the Assessing Officer has offered sufficient opportunity to the assessee of being heard and considered all the evidences and materials found during the course of action under section 132. The assessment order, the Commissioner of Income-tax (Appeals) held, is not based on the appraisal report of the ADI. Appraisal report, the Commissioner of Income-tax (Appeals) held, is not essentially to be supplied to the assessee as it is a confidential document. He further held that the Assessing Officer applied his mind while invoking t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no legal sanctity. As such, the stand of the Assessing Officer that he got validly extended time to pass the order is incorrect. Learned counsel submitted, the Assessing Officer has not passed an order directing the audit under section 142(2A). He merely endorses the recommendation of the ADI. The ADI is not the competent authority to direct the audit. Particularly he brought our attention to the letter dated February 25, 1999, of the Assessing Officer addressed to the Commissioner of Income-tax, with regard to audit under section 142(2A). First he reproduced the material portion of the appraisal report in this letter, which reads as under : In fact, all the business activities are being undertaken without keeping any sort of record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income-tax (Appeals). The learned Departmental representative submitted that the Assessing Officer applied his mind and he has gone through the letter of the ADI. The Assessing Officer recommended the audit under section 142(2A) after applying his mind. Mere quoting of some portion of the letter of the ADI does not mean that the Assessing Officer had not applied his mind. In view of the above, the learned Departmental representative submitted, the contention of the assessee on this point is liable to be rejected. Considering the rival submissions, going through the decisions relied upon by the assessee and the relevant sections, we are of the view that the order of the Assessing Officer is beyond time as contemplated u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seek the previous approval of the Chief Commissioner of Income-tax or the Commissioner of Income-tax to get the accounts audited. In the instant case of the assessee it is clear that the initiation was done by the ADI. The Assessing Officer is merely endorsing the above letter. It is all the more clear from paragraph 3 of letter dated February 25, 1999, from the Assessing Officer to the Commissioner of Income-tax , which has been reproduced below : 3. It is, therefore, requested that the proposal of the ADI in the appraisal report mentioned hereinbefore for getting the accounts of the assessee audited under section 142(2A) of the Income-tax Act, 1961, may be approved and also a reputed firm of the Chartered Accountants may be assigned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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