TMI Blog2018 (1) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... itation for passing the assessment order was expiring on 31/03/2016. The hot-haste, the casual and cavalier attitude of the Respondent Assessing Authority in which he is invoking a serious provision of the Act against an assessee which is a Government Undertaking engaged in a public purpose of Industrial Development and being exempt from Income Tax under the KIADB Act itself, are very telling facts, in the perspective of which, invoking of these provisions of Section 142 (2-A) of the Act in this manner was absolutely not called for. This Court is, therefore, of the opinion that the impugned orders under Section 142(2-A) of the Act cannot be sustained. While quashing the two orders under Section 142 (2-A) of the Act for the Assessment Years 2013-14 and 2014-15, this Court would however give one more opportunity to the Respondent Assessing Authority to reconsider the matter in the light of the aforesaid at its own level and consider the objections and written submissions filed by the petitioner assessee Board in the correct perspective and pass fresh orders. - WRIT PETITION No.1863/2017 C/W WRIT PETITION No.25223/2016 (T-IT) WRIT PETITION No.1863/2017 - - - Dated:- 2-1-2018 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions to be furnished and considered by the said Assessing Authority, he passed the impugned order under Section 142 (2-A) of the Act, directing Special Audit vide impugned order Annexure A on 28/03/2016, itself. 5. He also urged before the Court that the Respondent Authority has merely referred and relied upon the Audit objections and Audit Paras given by the Comptroller and Auditor General of India (C AG) for the said period to which the assessee Board had given its due reply and explanations to the said Comptroller and Auditor General of India and it was for their consideration and there was no independent application of mind and formation of reasonable belief by the Assessing Authority himself to direct such Special Audit under the Income Tax Act in the case of the petitioner assessee Board, which is exempt from payment of Income Tax under the provisions of Section 11 of the Act. 6. Similar are the facts in the connected Writ Petition No.1863/2017 for the Assessment Year 2014- 15 and the learned counsel for the petitioner assessee Board submitted that though on the date of giving of Notice, the limitation was not expiring, as the Notice was given on 08/11/2016 and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State and being a Government of Karnataka undertaking, the reasons available for directing Special Audit under Section 142(2A) of the Act, may not be available to the respondent-Income Tax Department. In this case, as the petitioner KIADB has already undertaken the process of two audits by independent auditors, Comptroller and Auditor General and Chartered Accounts and therefore, the contention raised by the learned counsel for the petitioner has considerable force. The case also unnecessarily drags in the public bodies like KIADB into litigation against Revenue Departments and to say the least, it is unfortunate and least justified litigation burdening the dockets of the Court. Such litigation is generally caused by the irresponsible acts of the Revenue officials, who, in order to shirk their own responsibilities, issue aforesaid kinds of notices and orders like the one impugned in the present case. 5. The matter would therefore require further consideration by this Court. Let the notices be issued to the respondents. A copy of the writ petition along with Annexures may be served upon them and also upon Mr.E.I.Sanmathi, learned standing counsel for Income Tax Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm of Income Tax and it is not expected to be mere paper exercise or a repetitive audit exercise. Therefore, the special circumstances must exist to direct the Special Audit under Section 142 (2-A) of the Act and such special circumstances or the special reasons must be discussed in detail in the order under Section 142(2-A) of the Act itself. 13. From the facts narrated above, it prima facie appears that the Assessing Authority has not only directed the Special Audit in the case of the petitioner assessee Board rather mechanically, but at the fag-end of the limitation period, perhaps just to buy more time to pass the assessment orders in the case of the assessee Board, which admittedly for the period in question enjoyed the exemption from Income Tax under Section 11 of the Act. 14. It is not in dispute before this Court that the Assessee has already produced the two Audit Reports, one by the Comptroller and Auditor General of India and another by a Chartered Accountant who is also an independent Auditor. The reasons recorded and communicated to the assessee for such Special Audit prima facie indicate that the Assessing Authority has merely quoted the observations and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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