TaxTMI 
TaxTMI 
2010 (1) TMI 788
X X X X Extracts X X X X
X X X X Extracts X X X X
....t dated 18.12.2009 passed under Section 142(2A) of the Income Tax Act by which he has directed the petitioner to get its accounts audited for the financial years 2001-02 to 2007-08 relevant to the assessment years 2002-03 to 2008-09 by M/s Tandon Seth and Co., Kanpur, who have been nominated by the Commissioner of Income Tax (Central), Kanpur in this behalf. Learned counsel for the petitioner submitted that no reason whatsoever has been given in the impugned order. He submitted that for the aforesaid direction, it is imperative and obligatory on the part of the officer concerned to consider the reply and to assign reasons. In support of the contention, he relied the decision of the Apex Court in the case of Sahara India (Firm), Lu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 142(2A) has held as follows:- "6. A bare perusal of the provision of sub-section (2-A) of the Act would show that the opinion of the assessing officer that it is necessary to get the accounts of the assessee audited by an accountant has to be formed only by having regard to:- (i) the nature and complexity of the accounts of the assessee; and (ii) the interest of the Revenue. The word "and" signifies conjunction and not disjunction. In other words, the twin conditions of "nature and complexity of the accounts: and "the interest of the Revenue" are the prerequisites for exercise of power under Section 142(2-A) of the Act. Undoubtedly, the object behind enacting the said provision is to assist th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d provision cannot be had by the assessing officer merely to shift his responsibility of scrutinising the accounts of an assessee and pass on the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the assessing officer, casts a very heavy duty on the said high ranking authority to see to it that the requirement of the previous approval, envisaged in the section is not turned into an empty ritual. Needless to emphasise that before granting approval, the Chief Commissioner or the Commissioner, as the case may be, must have before him the material on the basis wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he decision given must be supported by reasons, so that the superior Court is assured that it is in accordance with law and is not a result of caprice, whim, fancy, or reached on the basis of policy or expediency. Absence of reasons vitiates the conclusions. (See M/s. Mahabir Prasad Santosh Kumar v. State of U.P., AIR 1970 SC 1302; M/s. Travancore Rayons Ltd. v. Union of India, AIR 1971 SC 862.) In the Travancore Rayons case the order passed by the Government of India ran as under:- "Government of India have carefully considered the points made by the applicants, but see no justification for interfering with the order under appeal." The order was struck down on the ground that reasons for rejecting the points in appeal h....