TMI Blog2004 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuance of the aforesaid directions and notice. Heard learned counsel for the parties. The petitioner is a company registered under the Indian Companies Act. The petitioner established a vanaspati manufacturing unit at Varanasi. It maintains its account on mercantile basis. For the assessment year 1990-91, the petitioner filed a return under the Income-tax Act on December 31,1990, declaring a loss of Rs. 24,61,860. Notice under section 143(2) of the Act dated June 18, 1991, was served on the petitioner on June 21,1991. Thereafter also several notices dated July 15,1991, July 30,1991, November 7,1991, November 9,1992, etc., were issued to the petitioner asking for various details and making various queries. However, it is alleged in para.9 of the petition, that at no stage of the assessment proceedings, did respondent No.1 tell or indicate to the petitioner that the account books of the petitioner were of complex nature and he was finding it difficult to understand, appreciate or apprehend the entries in the account books. It is alleged in para.10 of the petition that during the assessment in question respondent No.1 examined the account books of the petitioner in detail and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich if required can easily be given either by the petitioner or on a bare perusal of the account books. It is alleged that none of the information sought is such that it cannot be obtained either from the petitioner or from looking into the account books. It is alleged in para.22 of the petition that the directions only say that respondent No.1 had examined the petitioner's return, profit and loss account, balance- sheet and other documents and also the account books/documents furnished by the petitioner in the course of the assessment proceedings. The direction further states that they have been issued having regard to the nature and complexity of the petitioner's accounts and also on the basis of material on which the assessment has been reopened. Similar direction under section 142(2A) of the Act has been given by respondent No.1 in respect of the assessment year 1991-92 (vide annexure 5 to the petition). It is alleged that this direction does not mention the basis on which this direction is given nor is it accompanied by any annexure. The narrative of this direction does not mention that it is founded on information on the basis of which the assessment has been reopened. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the manufacturers/dealers through whom the plant and machinery were purchased. The petitioner's claim that the plant and machinery were locally fabricated after procuring steel and other parts did not appear to be convincing considering the fact that the plant for manufacture of vanaspati required sophisticated machinery and there were not many manufacturers of vanaspati plants. Enquiries were pursued in this regard in the course of assessment for the assessment year 1991-92. It was, then found that the other fabricator, M/s. Bharat Fabricator, was also not traceable at the address furnished by the petitioner-company. The petitioner showed investment as on March 31,1990, of Rs. 35,78,717 claiming that the aforesaid plant and machinery have been fabricated through certain parties. However, these parties were not found at the addresses given by the petitioner and it could not be believed that the sophisticated plant and machinery for manufacture of vanaspati could have been fabricated on payment of Rs. 1,02,122. The Chief Director, Ministry of Food and Civil Supplies, Directorate of Vanaspati, Government of India, sent a report to the Director of Income-tax, New Delhi, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntries have been passed in a very complex manner. Details are given in para.11 of the counter affidavit. In para.12 of the counter affidavit it is stated that in the book entries out of 809 book entries for the assessment year 1991-92, 397 entries were made only on the last date on March 31,1991, and these adjustments have been made in a very complex manner. In para.14 it is stated that big factories are run by the Jhunjhunwala group. The family members are assessees but the details of returned income of the money are so meagre which clearly show that the investment appears to have been made from unaccounted source. In paras.15 to 22 of the counter affidavit it is stated that approval was sought for from the Commissioner of Income-tax (Central), Kanpur, by submitting a detailed proposal. The proposal mentioned in annexure CA4 gives full details about the complexity of the account and the interest of the Revenue. The Commissioner of Income-tax (Central), Kanpur, granted approval, vide para 22. From the facts of the case, we find no merit in this petition. It is evident from these facts that the petitioner's accounts are complex in nature and hence they require special audit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 142(2A). Detailed reasons have been given in annexure CA4 to the counter affidavit about the complexity of the accounts of the petitioner, the suppression of investment, etc. In Gurunanak Enterprises v. CIT [2003] 259 ITR 637, the Delhi High Court observed: "It is not within the province, of judicial review to minutely analyse the materials on which the opinion of the Assessing Officer is rested to find out whether the same is sufficient for the authority concerned to come to the conclusion that the accounts of the assessee need to be subjected to special audit. As noticed above, what is complex to one may be simple to another and, therefore, the issue has to be examined from the view point of the Assessing Officer concerned. The court is not expected to substitute its own understanding and comprehension of the accounts of an assessee. We also do not find any substance in the submission of learned counsel for the petitioners that merely because no special audit under the said provision had been directed in the past several years or that their accounts had already been subjected to statutory audit under section 44AB of the Act and the petitioners' assessments were completed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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