TaxTMI 
TaxTMI 
2004 (7) TMI 11
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....the directions under section 142(2A). A notice (P-2) dated January 6, 2004, was issued under section 158BC by respondent No. 3 for furnishing a return for the block period. It is averred in the petition that the petitioner is a registered co-operative society and its income is fully exempt under section 80P(2)(a)(i) of the Income-tax Act. On February 21, 2002, search operations were carried out at the premises of the petitioner society in which 13 numbers of loose papers were seized. The limit of completion of assessment was two years. The period was to expire on February 28, 2004. Respondent No. 3 remained dormant for 22 months. Only at the fag end of the period of limitation on January 6, 2004, he initiated assessment proceedings by issu....
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....es, documents were found/seized: (A) Annexure CF-1 dated February 21, 2002. Cash found Rs. 23,69,640. No seizure of cash was made. (B) LPS-1 dated February 21, 2002-Loose papers from Sl. Nos. 1 to 13 were found and seized. (C) BS-1 dated February 22, 2002-A cheque book of Sri Amish Sharma was found but not seized. (D) Printouts of various accounts as on February 21, 2002 containing pages 1 to 161. (E) Printouts of various accounts as on February 22, 2002. Simultaneously survey operations under section 133A of the Income-tax Act were also carried out at Bairagarh Branch, Bhopal, survey operations on February 21, 2002, were done, Arera Colony Branch, Bhopal, BHEL Indrapuri Branch, Bhopal, New Market Branch, Bhopal, various printouts wer....
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....on 158BC in the case of the bank alone could not be issued. Notice under section 158BC was received by the petitioner on January 7, 2004. It was required to furnish the return for the block period within 20 days. The return was due on January 27, 2004. The petitioner sought extension of time to furnish the return for the block period up to February 20, 2004. The return for the block period has not been filed till today. Time of 20 days was sufficient for the bank to furnish a return for the block period. Non-filing of the return within the due date was also one of the reasons to conclude that in the case of the bank, a direction for audit under section 142(2A) would be appropriate. The seized as well as impounded documents were investigated....
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....er the category of exemption, hence appointment of auditor has been rightly ordered and the order is within the jurisdiction. Section 80P(2)(a)(i) of the Income-tax Act exempts the income-tax from banking operations. Undisclosed income is not subjected to exemption, which is to be determined under section 158BC. Authorisation under section 132 was issued. Shri Sumit Nema, learned counsel appearing for the petitioner has strenuously urged that there is absolutely no basis to exercise the power under section 142(2A) of the Income-tax Act. Notice under section 158BC was issued at the fag end of limitation of the two years. In order to gain the limitation, power under section 142(2A) of the Income-tax Act has been exercised. He has further sub....
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....per. Section 142(2A) of the Income-tax Act reads thus: "(2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue, is of the opinion that it is necessary so to do, he may, 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 part....
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....the basis of seized and impounded material to appoint an auditor under section 142(2A), which cannot be said to be improper in the peculiar facts of the instant case. It cannot be said that its order is not on the basis of objective consideration, particularly when the nature of investigation, which is required to be made, is such which requires close scrutiny of the transactions. Obviously an auditor could have been appointed as provided under section 142(2A). In similar circumstances special audit was held to be based on objective considerations when voluminous record of the textile mills of a number of branches, had to be looked into, it was held that direction to make the audit by the auditor appointed under section 142(2A) of the Incom....