Special audit directions and judicial review: belated writ challenge failed where material supported the tax officer's satisfaction.

A writ challenge to a special audit direction under section 142(2A) was treated as highly belated because it was filed only days before the audit report deadline, and the audit report had already been submitted, rendering the petition infructuous. On the merits, the record showed material supporting the Assessing Officer's satisfaction about the nature and complexity of the accounts and the interests of the Revenue. The court stated that judicial review does not extend to a minute reappraisal of the sufficiency of that material, and rejected the challenge for want of application of mind. A separate hearing objection was noted only prima facie and not independently decided.

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Issues: (i) Whether the writ petition challenging the direction for special audit was liable to be rejected for delay and because the controversy had become infructuous; (ii) Whether the impugned direction under section 142(2A) of the Income-tax Act, 1961 was unsupported by material or issued without application of mind.

Issue (i): Whether the writ petition challenging the direction for special audit was liable to be rejected for delay and because the controversy had become infructuous.

Analysis: The petition was filed when only a few days remained for submission of the audit report, though the direction had been served much earlier. In view of the statutory time limit under section 142(2C), the challenge was treated as highly belated. The Court also noted that the audit report had already been sent, rendering the petition infructuous.

Conclusion: The petition was liable to be rejected on the grounds of delay and infructuousness.

Issue (ii): Whether the impugned direction under section 142(2A) of the Income-tax Act, 1961 was unsupported by material or issued without application of mind.

Analysis: On the original records, the Court found that the Assessing Officer had sufficient material to form satisfaction regarding the nature and complexity of the accounts and the interests of the Revenue. The scope of judicial review was held not to extend to a minute reappraisal of the material to test the sufficiency of the authority's opinion. The separate contention regarding prior hearing was noted only prima facie and was not separately adjudicated.

Conclusion: The challenge to the special audit direction on the ground of absence of application of mind was rejected.

Final Conclusion: The writ petition challenging the special audit direction failed and was dismissed on preliminary grounds, with no interference made with the impugned order.

Ratio Decidendi: A writ challenge to a special audit direction may be rejected where it is delayed and rendered infructuous, and the authority's satisfaction under section 142(2A) will not be interfered with in judicial review if supported by material relating to the nature and complexity of the accounts.

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