AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (5) TMI 540
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....d from the impugned order, are that the Assessee had filed its returns for different assessment years. There was a search conducted by the Revenue on the Assessee on 7th October 2004. The last panchnama was drawn on 6th December 2004. A notice under Section 153A of the Income Tax Act (for short, "the Act") was issued upon the Assessee on 16th May, 2005. The assessee filed return in response to this notice. On 12th December 2006, the Assessing Officer ordered for conducting special audit as per the provisions of Section 142 (2A) of the Act and gave 90 days time i.e. up to 12th March 2007 to submit the report. The Auditor made a request to the Assessing Officer for seeking extension of time for completion of audit stating that the Assessee did not co-operate in the proceedings. Consequently, Assessing Officer extended the time from 12th March, 2007 to 20th April, 2007. The Assessing Officer again extended the time for completion of the special audit up to 20th May, 2007. The AO again, for the third time, extended the time for completion of special audit up to 5th June, 2007. The audit report under Section 142(2B) of the Act came to be submitted by the Auditor on 4th June, 2007. The A....
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....ommissioner] in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the [Assessing Officer] may require; [Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard.] [(2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or otherwise.] [(2C) Every report under sub-section (2A) shall be furnished by the assessee to the [Assessing Officer] within such period as may be specified by the [Assessing Officer]: Provided that the Assessing Officer may, Suo motu, or on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which th....
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....ast of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2005 or any subsequent financial year and during the course of the proceedings for the assessment or reassessment of total income, a reference under sub-section (1) of section 92CA- (i) was made before the 1st day of June, 2007 but an order under sub-section (3) of section 92CA has not been made before such date; or (ii) is made on or after the 1st day of June, 2007, the period of limitation for making the assessment or reassessment in case of such other person shall, notwithstanding anything contained in clause (ii) of the second proviso, be the period of thirty-three months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or twenty-one months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later.] Explanation.-In computing the pe....
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....n 142(2A) has been provided in the proviso to section 142(2C) by the Finance Act, 2008 with effect from 1st April, 2008 and the same being prospective in nature, the AO was not empowered to extend the time for audit report of his own. The learned counsel also placed reliance upon the Memorandum explaining the provisions of finance bill, 2008 and also the circular No.1 issued by CBDT dated 27th March, 2009. The said Memorandum and Circular shall be referred to a litter later. 7. This was not in dispute that the word „suo motu‟ came to be inserted by way of an amendment with effect from 1st April, 2008. However, it was contended by learned counsel for the Revenue that the Assessing Officer had the power to extend the time of audit report under Section 142(2C) of the Act since the word "and" appearing before the words "for any good and sufficient reasons" was to be read as „or‟. In other words, the submissions of the learned counsel was that the Assessing Officer suo motu had the power to direct the assessee to get audit report and also to extend the time for submission of audit report. Learned counsel relied upon cases of Jagjit Sugar Mills Co. Ltd.vs. CIT, 2....
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....quires. In Ishwar Singh Bindra v. State of U.P., it is observed: "And has generally a cumulative sense, requiring the fulfillment of all the conditions that it joins together and herein it is the antithesis of or. Sometimes, however, even in such a connection, it is, by force of a context, reads as or. Sometimes to carry out the intention of the legislature it is found necessary to read the conjunctions „or‟ and „and‟ one for the other." In Maxwell on the Interpretation of Statutes, 12th edition, at page 232, it is observed, "In ordinary usage, „and‟ is conjunctive and „or‟ disjunctive. But to carry out the intention of the legislature it may be necessary to read „and‟ in place of the conjunction „or‟ and vice versa." 11. In the case of CIT vs. Gangaram Chapolia (supra), it was held as under: "(ii) The conjunctive "and" in the second clause of section 271(1)(a) should be construed as "or". Therefore, even if the return of the assessee had been filed in the manner prescribed, as it was not filed within the time allowed under section 139(1), and as such one of the two conditions prescribed in section 271....
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....tory. But the intention of the legislature must be found out from the scheme of the Act. It is also equally well settled that when negative words are used, the courts will presume that the intention of the legislature was that the provisions should be mandatory in character." 15. With these principles of interpretation, we may note that the provisions as existing in sub section (2C) of the Act before 1st April, 2008 did not empower the Assessing Officer to suo motu extend the time for submission of audit report under sub section (2A). This is also clear from the fact that the Memorandum explaining the provisions of granting power to the Assessing Officer to extend time for completion of special audit under sub section (2A) of Section 142 mentions about the reasons in the said Memo which reads as under: "Granting of power to the Assessing Officer to extend the time for completion of special audit under sub-section (2A) of section 142 Sub-sections (2A) to (2D) of section 142 deal with power of Assessing Officer to order a special audit. Such power is required to be exercised by the Assessing Officer having regard to the nature and complexity of the accounts of the assessee and the ....
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....gregate of the originally fixed period and the period(s) so extended shall not exceed 180 days from the date of issuance of direction of specific audit. Further, such extension can be made only when an application is made in this behalf by the assessee and there are good and sufficient reasons for such extension. 27.3. With a view to rationalize the said proviso so as to also allow the Assessing Officer to extend this period of furnishing of audit report suo motu, the said proviso has been amended. Hence, while the Assessing Officer shall continue to have power to grant extension on an application made in this behalf by the assessee and when there are good and sufficient reasons for such extension, he can also grant such extension on his own. 27.4 Applicability - This amendment has been made applicable with effect from 1-4-2008. Hence, from this date and onwards, the Assessing Officer shall also have power to extend the period of furnishing of audit report suo motu". (Emphasis supplied) 17. The Memo explaining the provisions of Finance Bill, 2008 and also Circular No.1 dated 27th March, 2009 of CBDT as reproduced hereinabove would clearly bring out that sub section (2A) to (2D) ....