TaxTMI 
TaxTMI 
TaxTMI 
2004 (10) TMI 30
X X X X Extracts X X X X
X X X X Extracts X X X X
.... chartered accountant was appointed as a special auditor to examine the matters and to submit a report. It is mentioned in the order that a search under section 132 of the Act was conducted on January 21, 1997. It was felt that the books of account and documents seized from the premises of the assessees did not give a true and correct picture of the income of the asses-sees for the years covered under the block period. The reasons have been given by the officer in detail and for the said reasons that the accounts of the assessees being of a complex nature a special auditor was appointed. The special audit was required for the following purposes: (a) To prepare a receipt and payment account of all persons of this group for each year coverin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1775 of 2000 raising a bill of Rs. 9,81,540 including service tax. After the bill was submitted, the order was made under section 142(2D) of the Act on February 16, 2000, annexure F, which is the order in challenge before this court. It appears that an opportunity was given to the assessees as well as the auditors vide letter dated November 19, 1999, to discuss the matter regarding fixation of the remuneration of the auditors. The order speaks about the maintenance of a diary of work done with details of time allocation of the audit work. The Commissioner of Income-tax after a careful consideration of all the aspects of the cases and work done by the auditors fixed the fees at Rs. 5 lakhs. Section 142(2D) reads as under: "(2D) The expense....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g in P.N. Misra group of cases were made available in a scattered manner and it was therefore next to impossible to maintain a separate record for each assessee in respect of time spent/work done for him. It is further pointed that the seized annexures contained information of different assessees in a scattered and haphazard manner and therefore how is it possible to work out the time spent assessee wise when the paper/documents were mixed. Therefore the reduction of the bill due to separate claim not lodged assessee wise towards work done is not justified. (b) It is wrong to mention that the time spent by our audit team was never certified by the Assessing Officer. The complete details of the time spent by our staff on day to day basis w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the minimum rates have been adopted which were just half of the maximum rates prescribed by the Institute of Chartered Accountants. He has also placed on record the work diary from pages 88 to 100. Learned counsel for the assessee has submitted that the work was not certified by the assessee and therefore the bill is highly inflated and the Commissioner has acted arbitrarily in passing the order. We may refer to the affidavit filed by the Commissioner of Income-tax in W.P. (C) No. 6312 of 2000. inter alia, stating that the fees fixed by the Commissioner of Income-tax was done after taking into consideration work done by the auditor which was duly verified by the Assessing Officer. The Deputy Commissioner of Income-tax has filed an affid....