TMI Blog2010 (2) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... esented for the assessee and Ms. Mona Mohanty Sr. DR represented for the revenue. 2. At the time of hearing, it was submitted by the Ld. A.R. that the issue in Ground no. 2 which was against the action of Ld. CIT(A) in rejecting the contention of the assessee that the assessment order passed by the A.O. was beyond the limitation period prescribed under the Act and was liable to be quashed goes to the root of the appeal. It was the submission that there was a search on the premises of the assessee on 07.10.2004 and consequently the last date the assessment u/s 153A was to be completed was on 31.12.2006. It was the submission that before the completion of the assessment on 12.12.2006 the A.O. had issued direction for a special audit u/s 142(2A). It was the submission that I.T.A. No. 3332-34,3585-87/Del/2008 the time given for filing the audit report was 90 days i.e. up to 12.03.2007. It was the further submission that the A.O. had extended the time limit for filing the special audit report suo moto on 3 occasions form 12.03.2007 to 20.04.2007 vide letter dated 07.03.2007, from 20.04.2007 to 20.05.2007 vide letter dated 17.04.2007 and again from 20.05.2007 to 05.06.2007 vide let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided that the Assessing Officer may, suo motu, or on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub-section (2A) is received by the assessee. The Provisions of Explanation (ii) to Section 153B read as follows: Explanation.--In computing the period of limitation for the purposes of this section,-- (i) x x x x x x x x x. (ii) the period commencing from the day on which the Assessing Officer directs the assessee to his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section; or (iii) x x x x x x x x x shall be excluded: The proviso to Exp.(ii) of Section 153B reads as follows: Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in clause (a) or clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n enacted as Act No. 18 of 2008. This circular explains the substance of the provisions of the Act relating to direct taxes. 27. Granting of power to the assessing officer to extend the time for completion of special audit under sub-section (2A) of section 142. 27.1 Sub-section (2A) to (2D) of section 142deal with the power of Assessing Officer to order a special audit. Such power is required to be exercised by the Assessing Officer having regard to I.T.A. No. 3332-34,3585-87/Del/2008 the nature and complexity of the accounts of the assessee and the interest of the revenue. 27.2 Sub-section (2C) of the said section specified the period within which the audit report is to be furnished. The provision to said sub-section empowers the Assessing Officer to extend this period of furnishing of audit report. Further, it is also provided that the aggregate of the originally fixed period and the period(s) so extended shall not exceed 180 days from the date of issuance of direction of special audit. Further, such extension can be made only when an application is made in this behalf by the assessee and there are good and sufficient reasons for such extension. 27.3 With a view to rational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audit fix the time limit with overall period of 180 days etc. and these provisions to be read together as complete code in these matters. In these circumstances, it cannot be held that the provisions of Section 142(2A) had a stand-alone position and was unfettered by section 142(2C). Further, a perusal of the proviso to Section 142(2C) shows that the A.O. did have the powers to extend the period by further period or periods as he thinks fit subject to the maximum limitation of a period of 180 days from the date on which the direction u/s I.T.A. No. 3332-34,3585-87/Del/2008 142(2A) was received by the assessee. On the facts of the present case, it is noticed that the assessee has not made any application for the extension of the period of special audit. Therefore extension which has been done vide letter dated 07.03.2007, 17.04.2007 and 17.05.2007 made on the request of the auditor could duly be taken as the suo motu action of the A.O. A perusal of the memorandum explaining the provisions of Finance bill 2008 as also the Circular No.01 dated 27.03.2008 which explains the amendment to the proviso to Section 142(2C) shows that the term suo motu, or had been inserted w.e.f. 01.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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