TaxTMI 
TaxTMI 
2014 (5) TMI 855
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....d under Section 143(2) of the Act on 28 September 2012. Another notice under Section 142(1) of the Act was issued on 26 September 2013, by which the assessee was called upon to furnish a copy of the audit report together with all underlying schedules and annexures besides, producing the books of account, bills and vouchers for verification. The assessee failed to comply with the requisition, following which a notice under Section 271(1)(b) of the Act was issued. On 6 November, 2013 a penalty of Rs.10,000 was imposed upon the assessee for non-compliance of the notice. A fresh notice was issued under Section 142(1) of the Act on 7 November 2013. Prosecution proceedings were initiated against the petitioner under Section 276D of the Act, inter alia, for wilfully withholding a copy of the audit report, books of account and other documents. 3. On 8 January 2014, summons were issued under Section 131 of the Act against the Directors of the Company requiring them to furnish the audit report for the AY 2011-12 together with the books of account, bills and vouchers for verification. On 7 February 2014, a notice was issued under Section 142(2A) of the Act, calling upon the assessee ....
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....s despite several opportunities and the audit report in support of the claim under Section 80-IB(10) of the Act. Moreover, it was stated that in submitting that a special audit under Section 142(2A) of the Act could be ordered only on the ground of the complexity of the accounts, the assessee had relied upon the pre-amended provision of the statute whereas with effect from 1 June 2013, besides the existing two conditions, four more conditions had been substituted. In this case, it was submitted that all the four newly inserted conditions are applicable. The Commissioner of Income Tax (Central), Kanpur, granted his approval to the proposal on 13 March 2014. Following this, the CIT (Central), Kanpur, by an order dated 21 March 2014 ordered a special audit under Section 142(2A). 6. On behalf of the assessee, it has been submitted by learned Senior Counsel that (i) the same method of accounting which has been followed by the assessee had been accepted by the Assessing Officer for the period between 2001 to 2010-11; (ii) though the ACIT in the notice to show cause had relied upon the complexity of the accounts as one of the reasons for proposing a special audit, this ground was given....
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...., with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the Chief Commissioner or Commissioner 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." 9. As a result of the amendment, an audit within the meaning of that provision can be ordered on any of the following grounds, namely; (i) the nature and complexity of the accounts; (ii) volume of the accounts; (iii) doubts about the correctness of the accounts; (iv) where there is a multiplicity of the transactions in the accounts; (v) specialized nature of the business activity of the assessee; and the interest of the revenue. The Assessing Officer is empowered to direct that an audit of a nature stipulated in the....
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....sitions and notices which were issued to him. The CIT (Central), Kanpur, has noted that the assessee has deprived the Assessing Officer of relevant information which could have enabled him to determine the true and correct income. In granting his approval, the CIT (Central), Kanpur, has observed as follows:- "3. Since assessee is a Builder and Colonizers, the project of the assessee spread over more than one accounting period and accordingly income has to be computed on percentage completion basis. This requires quantification of closing stock of raw material as well as work-in-progress for each year. In normal course, such information and other information require for computation of income would be available in Form 3CD filed by the assessee in pursuance to tax audit report u/s 44 AB of the Act. Since Percentage Completion Method as per Accounting Standard VII of the Institute of Chartered Accountant as well as calculation of work-in-progress is required complex accounting procedure. It appears to be a fit case for reference to the Accountant as prescribed under the Income Tax Act 1961 as per provisions of section 142 (2A) of the Act. 4. In view of the amendment and the fact....