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TMI Blog2018 (9) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... ited to disallowance of claim of expenditure of Rs. 7.75 crore made by the Assessing Officer on the ground that it relates to prior period and was not incurred and does not relate to the period relevant to the assessment year 2005-2006. 3. Learned counsel for the Revenue relies on the reasoning given in the assessment order dated 15.12.2008 and the order of the Commissioner of Income Tax (Appeals) dated 30.6.2014, upholding the disallowance. He submits that the auditor appointed by the respondentassessee, not satisfied with the explanation given by the respondentassesssee, had notified that the expenditure was prior period expenditure. This note and reservation of the auditor was reliable and should be accepted. Stand and stance of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period expenditure. This qualification or note alone would not justify reversal of the factual finding recorded by the Tribunal. Auditor's opinion though relevant and material would not be final and conclusive even when against the assessee. Auditor's report in a way is a third party and an independent report that can be equated with an expert opinion. It may be accepted or rejected or partly accepted and partly rejected. It has to be considered with other material. It cannot be treated as final or binding on the Assessing Officer, or for that matter even on the assessee, except when mandated by a statutory provision, which requires an unqualified auditor's report or certification. In the absence of statutory provision it would not be righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuade the Income-tax Officer that there was no justification for the qualified opinion or that there were valid and compelling reasons for an assessee for his failure or omission to satisfy an auditor. We are sure that the concerned tax authorities will not approach the matter in a strictly technical manner so as to make a best judgment assessment and/or to levy penalty merely because there is a qualified report of an auditor. The authorities will adopt a judicial approach and consider all attendant circumstances including the fact that the non-corporate assessees were not required to maintain their financial records in the manner in which the corporate assessees maintain as required under the law in force for the time being and the author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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