TaxTMI 
TaxTMI 
2000 (8) TMI 248
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.... return for the block period on 30th Aug., 1997, showing undisclosed income for the block period on 30th Aug., 1997, showing undisclosed income for the block period at Nil. Looking to the nature of business and complexity of the accounts, the assessee was ordered to get its accounts audited under s. 142(2A) on31st Oct., 1997. The AO noted that under s. 158BE the time-limit available for completing the block assessment was upto29th April, 1998, and the audit report was received in the late hours of27th April, 1998. Considering the voluminous report and the availability of only one day at the disposal of the AO. The AO completed the assessment without confronting the assessee with the report and worked out the undisclosed income accordingly. ....
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....l, 1998, and not27th April, 1998. It was pointed out that the assessee as well as M/s D.M. Gears (P) Ltd. simultaneously approached the AO for the extension of time as the audit report under s. 142(2A) was also required to be obtained in the case of M/s D.M. Gears (P) Ltd., and other concerns of the assessee group by the same auditor. It was further pointed out that along with the letter of the assessee dt. 16th March, 1998, for extension of time for furnishing the audit report under s. 142(2A), M/s D.M. Gears (P) Ltd. also moved application on the same date and for both the concerns time was extended upto 25th April, 1998, and it was duly noted by the auditor, which was apparent from the copy of the letter dt.25th April, 1998. Since the au....
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....hich the assessee was required to furnish the report shall be excluded. It thus boils down that the time for getting the accounts audited is to be excluded while computing the limitation period. Since the last search warrant was executed on 22nd Sept., 1996, the last date for completing the assessment expired on 31st Oct., 1997, on which date the assessee was directed to get its accounts audited under s. 142(2A) and submit report by 31st Jan., 1998. After some extensions, the AO extended the time for submission of audit report upto 25th April, 1998, in the case of the assessee as well as the sister concern of the assessee, M/s D.M. Gears (P) Ltd., for which concern also the same auditor was appointed. A further extension upto 29th April, 19....
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....nce conditions as prescribed under s. 142(2A) were not satisfied and the AO without application of mind and without pointing out any complexity in the accounts referred the matter to the CIT for appointment of auditor under s. 142(2A), the resulting block assessment order should be annulled. 8. As against this the learned Departmental Representative contended that the assessee had no basis to say that the AO had not confirmed his opinion as regards complexity of accounts and other conditions of s. 142(2A). He pointed out that the AO complied with all the requirements before approaching the CIT for approval. He placed before us a copy of the letter dt.22nd Oct., 1997, written by the AO to the CIT pointing out the complexity of accounts an....
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....e despatch of cotton to various branches and other relevant factors were complicated and required special audit. The Hon'ble Allahabad High Court in that case held that the direction issued by the CIT for the special audit of the assessee's accounts under s. 142(2A) was valid. The facts of the present case are more or less like the one prevailing in the case of Swadeshi Cotton Mills Co. Ltd. wherein also the direction for special audit of accounts under s. 142(2A) was held to be valid. This case relied upon by the learned counsel is rather in favour of the Revenue. 11. The next authority relied upon by the learned counsel for the assessee is the case of Jai Prakash Singh vs. CIT. In this case the Gauhati High Court dealt with the assessm....