TMI Blog2015 (6) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 11.03.2015 is hereby quashed with the liberty to the Assessing Officer to pass a fresh order in terms of the provisions of Section 142(2A) of the Act. - Misc. Bench No. - 3355 of 2015 - - - Dated:- 29-5-2015 - Hon'ble Shri Narayan Shukla And Hon'ble Rajan Roy,JJ. For the Petitioner : Abhinav Mehrotra, Atma Ram Verma For the Respondent : Manish Misra ORDER (Delivered by Hon'ble Shri Narayan Shukla,J.) Heard Mr. Abhinav Mehrotra, learned counsel for the petitioner as well as Mr. Siddharth Dhaon, learned counsel for the respondent nos. 1 and 2. The petitioner has assailed the order dated 11.03.2015 passed by the Income Tax Officer, Hardoi whereby the petitioner has been directed to get his accounts pertaining to assessment year 2012-13 audited under Secion 142(2A) of the Income Tax Act, 1961(the Act). Learned counsel for the petitioner has submitted that the direction for special audit has been made without examining the books of accounts of the assessee, which is in violation of principles of natural justice. It has been stated that the order impugned is illegal and beyond jurisdiction as it has been issued beyond period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplex. What is complex to one may be simple to another. It depends upon one's level of understanding or comprehension. Sometimes, what appears to be complex on the face of it, may not be really so if one tries to understand it carefully. Thus, before dubbing the accounts to be complex or difficult to understand, there has to be a genuine and honest attempt on the part of the Assessing Officer to understand accounts maintained by the assessee; appreciate the entries made therein and in the event of any doubt, seek explanation from the assessee. But opinion required to be formed by the Assessing Officer for exercise of power under the said provision must be based on objective criteria and not on the basis of subjective satisfaction. There is no gainsaying that recourse to the said provision cannot be had by the Assessing Officer merely to shift his responsibility of scrutinizing the accounts of an assessee and pass on the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the Assessing Officer, cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench of this Court has held as under: 27. In our opinion, it is not necessary for the Assessing Officer to give a show cause notice or give a hearing to the assessee before issuing the directions under Section 142(2A). In our opinion, the direction under Sub-section (2A) of Section 142 is purely administrative in nature and not quasi judicial. Moreover, in our opinion, such a direction does not have civil consequences. It does not affect the assessee's rights or liability. Hence, the decision of the Supreme Court in State of Orissa v. Dr. Binapani Dei AIR 1967 SC 1269, does not apply. No doubt an administrative order if it has civil consequences can only be passed after giving opportunity of hearing, but in our opinion a direction under Sub-section (2A) of Section 142 does not have civil consequences because it does not affect his rights and does not create any liability against the assessee. It is only the assessment order which will create a liability. The purpose of the direction under Sub-section (2A) of Section 142 is to ensure that a correct assessment order is passed so that the Revenue is not deprived of its dues. Hence, we do not agree with learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounts so audited unless the assessee has been given a reasonable opportunity of being heard. In Sahara India's case (supra), the Hon'ble Supreme Court has held that the opinion of the Assessing Officer to get the accounts of assessee audited by an Accountant has to be formed only by having regard to: (i) the nature and complexity of the accounts of the assessee; and (ii) the interests of the revenue. Thus, the twin conditions of nature and complexity of the accounts and the interests of the revenue are the prerequisites for exercise of power under Section 142 (2A) of the Act. It has been held that before dubbing the accounts to be complex or difficult to understand, there has to be a genuine and honest attempt on the part of the Assessing Officer to understand accounts maintained by the assessee; appreciate the entries made therein and in the event of any doubt, seek explanation from the assessee. The opinion the Assessing Officer requires based on objective criteria and not on the basis of subjective satisfaction. The Supreme Court has further observed that recourse to the said provision cannot be had by the Assessing Officer merely to shift his responsibil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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