TMI Blog2017 (5) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the special audit of the accounts of the petitioner's wife and family members - Held that:- It is an irrelevant consideration while considering the necessity of special audit in the case of the petitioner. The exercise of jurisdiction under section 142(2A) of the Act by the Assessing Officer has to be examined merely on the basis of the material available before him in respect of the assessee concerned while exercising jurisdiction to direct special audit. Nothing has been shown to us that on the basis of the material available before the Assessing Officer, the direction for special audit is perverse. Thus, this grievance is also not justified. Assessing Officer did not examine the books of account before ordering/directing the speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort in the prescribed form and can also seek such other particulars from the special auditor which he may require to complete the assessment. The terms of reference indicate that the examination which had to be done by the special audit was to examine the accounts keeping in view the supporting evidence. Thus, this grievance is also without any substance. The argument that, entire direction for special audit is without jurisdiction as the Assessing Officer has no jurisdiction to assess the petitioner under section 153A of the Act in respect of three of the assessment years concerned as the assessment for those years had been completed under section 143(3) of the Act. At this stage, this submission on the part of the petitioner is prematu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order dated March 10, 2016 directs the petitioner to subject its accounts to special audit for the assessment years 2008-09 to 2014-15. 2. The petitioner is a trader in shares dealing in capital and derivative segments. The petitioner has consequent to a search action of section 132 of the Act, filed its return of income under section 153A of the Act for the assessment years 2008-09 to 2013-14 and under section 139(1) for the assessment year 2014-15. The last date to complete the assessment under section 153A of the Act is March 31, 2016. The impugned order dated March 10, 2016, has admittedly been passed after issuing a notice and hearing the petitioner. 3. However, the grievance of the petitioner is that the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the special audit has been directed only to secure more time to pass an order of assessment is concerned, we find there is nothing in the Act which prohibits the Assessing Officer from ordering/directing the special audit after a particular date before the last date of framing an assessment. An Assessing Officer can direct a special audit as and when he does come to the conclusion that the accounts of the assessee are required to be specially audited for any one of the reasons set out in section 142(2A) of the Act. Thus, this grievance is not sustainable. 6. So far as the second grievance with regard to not directing the special audit of the accounts of the petitioner's wife and family members is concerned, we find that is an irrele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cie view directing a special audit stands belied by the fact that the show-cause notice dated July 25, 2016, issued to the petitioner, in fact, indicated the basis for directing special audit on the basis of the volume of the total trades executed by the petitioner, multiplicity of transactions in the accounts, including the nature and complexity of the accounts and doubts about the correctness of the accounts. Therefore, this grievance is also without substance. 8. The fourth grievance of the petitioner is that the terms of reference indicates that the special auditor has also been asked to prepare accounts and therefore bad in law, is unjustified. Section 142(2A) of the Act empowers the Assessing Officer while directing a special audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef Commissioner and hearing have undisputedly been complied with. Besides, the satisfaction recorded by the Assessing Officer before directing a special audit is his opinion on the basis of the facts before him and such opinion is not shown to be perverse. We are not a court of appeal to substitute the opinion of the Assessing Officer to exercise power under section 142(2A) of the Act by our opinion to the contrary. We find that the opinion reached by the Assessing Officer to direct special audit on the present facts is a reasonable and possible view. 11. In the above view, there is no merit in the challenge by the petitioner to the impugned direction dated March 10, 2016 of the Assessing Officer for special audit. 12. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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