Nickunj Eximp Enterprises Pvt. Ltd.… v. Assistant Commissioner Of Income Taxrange 1(2) & Ors

bsb 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. WRIT PETITION NO. 2798 OF 2012 Nickunj Eximp Enterprises Pvt. Ltd.… Petitioner v/s Assistant Commissioner of Income TaxRange 1(2) & ors. … Respondents Mr.J.D. Mistry, Senior Advocate along with Mr.Jitendra Singh, Advocate for the petitioner. Mr.Suresh Kumar, Advocate for the respondents. CORAM: M.S. SANKLECHA & N.M.JAMDAR, JJ. DATED : 30 SEPTEMBER 2014 P.C.: At the request of the counsel, this petition is being disposed of at the stage of admission. 2.This petition challenges the order dated 22 February 2012 passed under Section 142 (2A) of the Income Tax Act, 1961 (the Act). By the impugned order, the Assessing Officer appointed a Special Auditor for the Assessment Year 2009-2010. 3.The petitioner had earlier filed Writ Petition (L) No.2720 of 2011 challenging the order dated 22 November 2011, directing a special audit bsb 2 of the petitioner's books of accounts under Section 142 (2A) of the Act. The petition bearing (L) No.2720 of 2011 was heard and disposed of along with other three petitions filed against the order dated 17 November 2011 directing the special audit for the Assessment Years 2005-2006, 2006-2007 and 2007-2008. This Court disposed of all the four petitions by an order dated 12 January 2012 by setting aside the order dated 17 November 2011 and 22 November 2011 appointing the Special Auditor and restored the matter to the Assessing Officer for fresh consideration. In the earlier proceedings before this Court leading to the order dated 12 January 2012, the respondent Revenue had filed affidavits in reply in respect of all four writ petitions relating to the Assessment Years 2005-2006, 2006-2007, 2007-2008 and 2009-2010. In these affidavits in reply filed for the Assessment Years 2005-2006, 2006-2007 and 2007-2008 the complexities in accounts were specifically mentioned making it necessary to subject the petitioner's books of accounts for those assessment years to the rigour of special audit. However, in respect of Assessment Year 2009-2010, although an affidavit in reply was filed by the respondent Revenue in Writ Petition (L) No.2720 of 2011, no mention of any complexities in the accounts for that year were indicated, even remotely. 4.The Assessing Officer thereafter has passed fresh orders dated 22 December 2012 in respect of all the assessment years i.e. 2005-2006, 2006-2007 and 2007-2008 while order dated 22 February 2012 for the Assessment Year 2009-2010 all of which were subsequent to the order dated 12 January 2012 directing reconsideration by the Assessing Officer the appointment of a Special Auditor under Section 142(2A) of the Act. The petitioner had challenged the fresh orders dated 22 December 2012 bsb 3 passed by the Assessing Officer appointing a Special Audit for the Assessment Years 2005-2006, 2006-2007 and 2007-2008 by filing Writ Petition Nos.1277 of 2012, 1278 of 2012 and 2867 of 2012. All the above three petitions were rejected by an order dated 26 August 2014. By the above order we inter-alia refused to interfere with the orders directing special audit for the Assessment Years 2005-2006, 2006-2007 and 2007-2008. This was inter-alia on the ground that, in the affidavit filed in the earlier proceedings leading to the order dated 12 January 2012, the Assessing Officer did indicate broadly the reasons i.e. particulars of complexities in the accounts of the petitioner for the Assessment Years 2005-2006, 2006-2007 and 2007-2008. Thus, the petitioner in those Assessment Years did have notice of the case to be met. 5.However, so far as the impugned order dated 22 February 2012 is concerned, as pointed out above, the affidavit in reply filed in the earlier Writ Petition (L) No.2720 of 2011 in respect of Assessment Year 2009-2010 did not indicate even remotely the reasons why the accounts of the petitioner were found complex for the year in question so as to warrant a special audit. In this case, non-furnishing of reasons to the petitioner would cause prejudice to the petitioner as there would be no occasion to explain what part of the accounts found complex, are in fact not complex. This leads to breach of principles of natural justice. Therefore, we set aside the impugned order dated 22 February 2012 appointing the Special Auditor to audit the petitioner's accounts for the Assessment Year 2009-2010. However, we make it clear that the Assessing Officer would consider afresh the need to appoint a Special Auditor for the Assessment Year 2009-2010 after indicating the reasons to the petitioner, why the special audit for the Assessment Year 2009-2010 is considered necessary. 6.We further make it clear that the bar of limitation will not operate from 4 April 2012 i.e. the date the petitioner filed this petition challenging the impugned order dated 22 February 2012 till the Assessing Officer passes a fresh order disposing of the notice seeking to appoint a Special Auditor under Section 142(2A) of the Act. Consequently, the assessment proceedings for the Assessment Year 2009-2010 will also continue to remain stayed till such time as the Assessing Officer disposes of the notice for appointment of the Special Auditor for the Assessment Year 2009-2010. The Assessing Officer is directed to dispose of the notice for appointment of a Special Auditor as expeditiously as possible preferably within a period of six weeks from today. 7.It is made clear that, in case the Assessing Officer directs an appointment of a Special Auditor, the same will not be given effect to for a period of two weeks from the date the direction is communicated to the petitioner. 8.The writ petition is disposed of with the above directions. (N.M.JAMDAR, J.) (M.S. SANKLECHA, J.)