TaxTMI 
TaxTMI 
2023 (3) TMI 1313
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....r. CIT 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. 3. That in the present case, the Ld. AO has admitted in order u/s 154 dated 09.11.2021 that letters dated 06.05.2021, 25.05.2021, 11.06.2021 & 22.06.2021 are not "direction" issued u/s 142(2A). 4. That the Ld. CIT(A) has failed to appreciate that there was no deliberate default on the part of the assessee in making compliance to the letters dated 06.05.2021, 25.05.2021 .06.2021 & 22.06.2021 issued by the Ld. AO. 5. That the Ld. CIT(A) has wrongly upheld the order passed by the Ld. AO wherein penalty of Rs. 40,000/- u/s 272A(1)(d) has been levied by ignoring the submissions dated 09.07.2021, 17.07.2021 & 26.07.2021 made before the Ld. AO. 6. That without prejudice in any view of the matter, the Ld. C1T(A) should have appreciated that the assessee was prevented by reasonable cause within the meaning of section 273B of the Income Tax Act in alleged noncompliance of direction issued u/s 142(2A) and, therefore, there was no justification in the l....
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....nt Year 2019-20 wherein order u/s 272A(l)(d) dated 31.07.2021 has been passed wherein penalty of Rs. 40,000/- has been levied by the Ld, AO for each assessment year for non-compliance of correspondences dated 06.05.2021, 25.05.2021,11.06.2021& 22.06.2021 for special audit u/s 142(2A) of the IT Act, 1961 and for reference, the AR quoted the relevant portion of the u/s 272A(l)(d) and Section 142(2A) in his submission. The AR further submitted that as per Section 142(2A), before issuing any "direction" to get the books of account audited by a special auditor, prior approval of PCIT must be taken by the AO and also the assessee has to be provided with a reasonable opportunity of being heard. As per the AR, in the present case, penalty has been levied for noncompliance of correspondences dated 06.05.2021, 25.05.2021, 11.06.2021 & 22.06.2021which as per the AR, are not "directions" issued u/s 142(2A), as neither prior approval of PCIT was taken nor was the assessee provided a reasonable opportunity of being heard and vide these letters time was extended to get the accounts audited. Therefore, as per the AR, penalty u/s 272A(1)(d)vide order dated 31.07.2021 is illegal, arbitrary and unjus....
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....ents sought and cooperate with the Special Auditor, so that the Special Audit could be completed in time. To deviate from the issue by considering the said communications as letters instead of directions shall not be in the fitness of things, The said communications fall very well within the meaning of directions as specified u/s 142(2A) of the Income Tax Act, 1961. As far as, the statutory approval of the PCIT is concerned, it is expressly mentioned in the penalty order dated 31.07.2021 in para 9, that the same was obtained vide letter No. 6292 dated 28.03.2021 of PCIT. Hence this contention of the appellant does not stand ground. Further, the AR has contended that reasonable opportunity of being heard was not given before initiating action u/s 142(2A) of the Income Tax Act, 1961. It is seen from para 8 of the penalty order dated 31.07.2021 that the detailed showcause was issued to the assessee on 12.02.2021 and in response to which, the assessee submitted his reply on 16.02.2021 and a speaking order was passed by the AO removing the objections on 24.02.2021. Hence, the contentions of the appellant do not stand ground here as well. The contention that in the rectification....
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....IT directing the assessee to get the accounts audited by a CA nominated by the Pr. CIT 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; that in the present case, the Ld. AO has admitted in order u/s 154 dated 09.11.2021 that letters dated 06.05.2021, 25.05.2021, 11.06.2021 & 22.06.2021 are not "direction" issued u/s 142(2A); that the Ld. CIT(A) has failed to appreciate that there was no deliberate default on the part of the assessee in making compliance to the letters dated 06.05.2021, 25.05.2021 .06.2021 & 22.06.2021 issued by the Ld. AO; that the Ld. CIT(A) has wrongly upheld the order passed by the Ld. AO wherein penalty of Rs. 40,000/- u/s 272A(1)(d) has been levied by ignoring the submissions dated 09.07.2021, 17.07.2021 & 26.07.2021 made before the Ld. AO and that without prejudice in any view of the matter, the Ld. CIT(A) should have appreciated that the assessee was prevented by reasonable cause within the meaning of section 273B of the Income Tax Act in alleged non-compliance of direction issued u/s....
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.....2021, 11.06.2021 & 22.06.2021 are not "direction" issued u/s 142(2A), as no such particulars have been prescribed for which the exercise of special audit was to be undertaken nor prior approval of PCIT was taken nor was the assessee provided a reasonable opportunity of being heard as per section 142(2A) and proviso thereto. Vide these letters simply time was extended to get the accounts audited. Therefore, penalty u/s 272(1 )(d) vide order dated 31.07.2021 is illegal, arbitrary and unjustified. 6. Be that as it may, no direction was ever issued to the assessee during the course of assessment proceedings containing particulars for which the exercise of special audit was to be undertaken. Letter dated 06.04.2021 of Ld. AO was neither issued and/or served on the assessee. (Page 31-34 of paper book) 7. It is pertinent to mention here that the assessee had filed a rectification application u/s 154 dated 07.09.2021 before the Ld. AO on the same ground and the Ld. AO while dismissing the said application vide order dated 09.11.2021 admitted that letters dated 06.05.2021, 25.05.2021, 11.06.2021 & 22.06.2021 are not "direction " issued u/s 142(2A) as the said "direction" was issued o....