Direction for Special Audit (Audit by department) - Section 142(2A) to (2D)

Special audit direction requires departmental audit or inventory valuation with prescribed reporting, remuneration rules, and compliance consequences.

Section 142(2A) allows the Assessing Officer to direct a special audit by an accountant or inventory valuation by a Cost Accountant based on complexity, volume, doubts as to correctness or specialised business activity; prior approval of the Commissioner and an opportunity of being heard are required. Expenses are to be determined by senior commissioners under prescribed guidelines and, for directions after specified dates, are payable by the Central Government; Rule 14B prescribes panels, hourly remuneration bands, time sheeting and oversight. Reports must be furnished within AO specified time (subject to a statutory maximum) and failure to comply invites assessment, penalties and prosecution.