Wp/2499/2004 Of Claridges Investments And Finance Pvt. Ltd v. The Deputy Commissioner Of Income Tax

O.O.C.J. WRIT PETITION NO.2499 OF 2004 Claridges Investments & FinancePrivate Limited.. Petitioner v/s. The Deputy Commissioner of Income-tax4(1), Mumbai & ors... Respondents Mr.J.D.Mestry i/by M/s.RMG Law for petitioner. Mr. R.V.Desai, senior counsel with Ms.S.V.Bharuchai/by Mr.P.Kapur for respondents. CORAM: R.M.LODHA ANDJ.P.DEVADHAR, JJ. DATED:8thOctober, 2004 P.C. Heard. 2. The direction dated 10th March, 2004 issued bythe Deputy Commissioner of Income-tax-4(1), Mumbaiin exercise of the powers under section 142(2A) ofthe Income Tax Act, 1961 and the special audit report dated 6th August, 2004 pursuant thereto are under challenge in the said petition. 3. Though the diverse contentions were raised bythe learned counsel for the petitioner inchallenging the direction dated 10th March, 2004and the special audit report dated 6th August, 2004and he also cited the judgments of the Calcutta by its conduct has disentitled itself in invokingthe extraordinary jurisdiction under Article 226 ofthe Constitution of India and in view thereof, wedo not deem it necessary to consider the diversesubmissions made by the learned counsel for thepetitioner. Moreover the assessment has beencompleted by the assessing officer now. If thepetitioner has any grievance in respect of theassessment, it has to prosecute the statutoryremedy of appeal.5. The learned counsel for the petitionersubmitted that in the petition, constitutionalvalidity of sub-section (2A) of section 142 readwith sub-sections (2B), (2C) and (2D) have alsobeen challenged. It is not necessary to go intothis aspect for what we have observed above.Moreover, in our order passed in writ petitionNo.1314 of 2004 on 27th July, 2004 dealing with thecontention that the provisions contained in section142(2A) and (2D) are unconstitutional, we observedthus-"2. The learned senior Counsel contendedthat the provisions contained in section142(2A) are unconstitutional if the courtreads the said section giving unbridledpower to the assessing officer andapproval by the ChiefCommissioner/Commissioner of Income-tax anempty formality or accepts the contentionof revenue that section 142(2A) givesunbridled power to the assessing officer.In this regard he invited our attention to Commissioner of Income-Tax v. NagarjunaSteels Ltd., 171 ITR 663. The learnedsenior counsel also contended that section142(2D) being unreasonable is alsounconstitutional because if the assessingofficer needs assistance of the specialauditor the costs of the special auditorhave to be borne by the department and thecosts cannot be foisted on the assesseeand more so, when there is no cap on thecosts.3. Prima facie, we are not persuaded bythe submission of the learned seniorcounsel challenging the constitutionalvalidity of section 142(2A) and 142(2D).The reason being that section 142(2A)itself provides for protection against anyarbitrary and unjust exercise of power bythe assessing officer as it requiresprevious approval of the ChiefCommissioner or the Commissioner as thecase may be. There is no question ofCourt reading section 142(2A) givingunbridled power to the assessing officerand that the requirement of the approvalis empty formality. This is not thecontention of the revenue. Moreover, theconstitutional validity of a legislationcannot be permitted to be challenged onifs and buts. Heavy burden liens on theperson to establish that the legislationis unconstitutional. The reliance placedby the learned senior counsel onCommissioner of Income-Tax v. NagarjunaSteels Ltd., 171 ITR 663 is misplaced andthe contention unimpressive.4. Similarly prima facie, we do not findany unconstitutionality in sub-section(2D) of section 142. The objective ofappointing the special auditor undersection 142(2A) is to have objectiveconsideration of the matter by theassessing officer where the nature andcomplexity of the account of the assesseeand the interest of the revenue demand theassessee’s accounts to be audited by thespecial auditor. Obviously, for thatpurpose, the cost has to be borne by theassessee. There is nothing unreasonableabout it." 7. Writ petition does not deserve to be admitted and is dismissed in limine. (R.M.LODHA, J.) (J.P. DEVADHAR, J.)