Special audit direction is sustainable where the Assessing Officer has objective material, jurisdiction, and Revenue-based necessity.

A special audit under section 142(2A) is valid when the Assessing Officer forms, on available objective material and with prior approval, the opinion that the accounts are complex and that audit is necessary in the interests of Revenue. Concurrent jurisdiction under section 120 can support the officer's authority where jurisdiction is not shown to be absent. An assessee cannot withhold account books and then challenge the direction on the ground that the records were not examined. The disclosed scale and complexity of the business may justify the audit direction, making the order sustainable.

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Issues: (i) Whether the impugned order directing special audit under section 142(2A) was invalid for want of jurisdiction in the officer who passed it; (ii) whether the order suffered from non-application of mind or absence of proper material on the question of complexity of accounts and the interests of Revenue.

Issue (i): Whether the impugned order directing special audit under section 142(2A) was invalid for want of jurisdiction in the officer who passed it.

Analysis: The statutory scheme treats the Assessing Officer as the authority empowered to direct a special audit, and section 120 permits concurrent exercise of jurisdiction by more than one assessing authority. On the facts, the officer who passed the order was not shown to be without jurisdiction, and the record indicated concurrent jurisdiction over the matters in question.

Conclusion: The jurisdictional objection failed and the order was not invalid on that ground.

Issue (ii): Whether the order suffered from non-application of mind or absence of proper material on the question of complexity of accounts and the interests of Revenue.

Analysis: Section 142(2A) requires the Assessing Officer to form an opinion, with previous approval, that the accounts are complex and that a special audit is necessary in the interests of Revenue. The Court held that such satisfaction could be based on the available objective material, and the assessee could not defeat assessment by withholding account books and then complain that they were not examined. The pleadings themselves disclosed a very large and complicated business structure, which supported the conclusion that a special audit was justified.

Conclusion: The special audit order was upheld as a valid exercise of power under section 142(2A).

Final Conclusion: The writ petitions were found to be without merit because the assessing authority had jurisdiction and the special audit direction was justified on the material available for assessment.

Ratio Decidendi: A special audit direction is valid where the Assessing Officer, on available objective material, forms the requisite opinion about complexity of accounts and Revenue interests, and an assessee cannot avoid such direction by failing to produce account books.

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