Special Audit Ordered for Income Tax Assessment Years 2008-2014

The court ordered a special audit under Section 142(2A) of the Income Tax Act for assessment years 2008-2009 to 2013-2014. The modified terms of reference for the audit were accepted by both parties, with a sequential approach starting from 2008-2009 to prevent disputes over limitation periods. The court emphasized avoiding duplication of efforts and unnecessary examinations, allowing for clarification based on previous orders. Unresolved issues can be brought to the court through an application, and the pending advance pricing agreement proceedings remain unaffected. The writ petitions were disposed of without costs, concluding the legal proceedings.

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Issues:
Special audit under Section 142(2A) of the Income Tax Act, 1961 for assessment years 2008-2009 to 2013-2014.

Analysis:
The judgment addresses the modified terms of reference for the special audit, which have been accepted by both parties and are to be considered a part of the order. The special audit is set to begin on April 1, 2018, starting with the assessment year 2008-2009 and progressing to subsequent years in order. This sequential approach is intended to prevent disputes over limitation periods, with interim orders staying the special audit and assessment proceedings for the following years until the audit for the immediate preceding year is completed.

The court justifies this direction by highlighting the complexities and resource-intensive nature of conducting simultaneous audits for all years. It emphasizes the need to avoid duplication of efforts and unnecessary examinations of issues already resolved in earlier years. The assessing officer and the special auditor are tasked with determining which issues require examination in each year, allowing the petitioner to seek clarification based on previous audit or assessment orders.

Additionally, the judgment clarifies that any unresolved issues can be brought to the court through an application in the present writ petitions. It also specifies that the consent order does not impact the pending advance pricing agreement proceedings. Ultimately, the writ petitions are disposed of without any costs being awarded, concluding the legal proceedings related to the special audit under consideration.

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