The Amritsar bench of Income Tax Appellate Tribunal (ITAT) has recently upheld that assessment passed under section 153A /144 of Income Tax Act based on special audit conduct under Section 142(2A) Income Tax Act,1961.
The assessee, Rajan Batra’s assessment was completed under Section 153A/144 of the Income Tax Act. A search was conducted in the premises of the assessee under Section 132(1) of the Income Tax Act.
Thereafter a Special audit was conducted on assessee under Section 142(2A) of the Income Tax Act for the nature and complexity of the accounts, doubts about the correctness of the account and in interest of revenue special audit of the books of account of the assessee was contemplated under Section 142 (2A) of the Income Tax Act.
The assessee has challenged the limitation for completion of the assessment after taking care of the special audit report by the revenue.Without considering the contentions of assessee the assessment was completed .
Aggrieved by the order assessee filed an appeal before the Commissioner of Income Tax (Appeals),who rejcted the appeal filed by the assessee.
Thus the Commissioner of Income Tax (Appeals) held that Special audit conduct under Section 142(2A) is not appealable before Commissioner of Income Tax (Appeals) as per the provisions of Section 246A of the Income Tax Act.
The assessment order was passed on 05.11.2015. Also, the assessment order was barred by limitation and assessee was not informed properly about the special audit so, the extension of the special audit is not accepted and the entire order is barred by limitation.
The Counsel for the revenue submitted that assessee has never cooperated during the assessment proceedings or during the conduct of Special Audit.
Further relied upon the decision of Punjab & Haryana court in the case of Jagatjit Sugar Mills Co. Ltd vs. CIT revenue submitted that the “period for submission of the audit report had to be extended even in the absence of an application from the assessee”.
The two member bench of the Dr. M. L. Meena, (Accountant Member) and Anikesh Banerjee (Judicial Member) dismissed the appeal filed by the assessee.
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