Period for which petition remained pending is to be excluded for computing Limitation Period for Special Audit: Gujarat High Court [Read Judgment]

The Gujarat High court ruled that the period for which petitions remained pending is to be excluded for the computing Limitation Period for Special Audit.

The petitioner, Dishman Infrastructure Limited is in the business of developing of Special Economic Zone (SEZ) at Village Bhamsara, Kalyanghadh, and Ghangad, Near Bagodara. A search/seizure and survey actions were conducted in “Dishman Group” and voluminous data/materials/documents were seized from the various premises, including the residential premises of the petitioner. Consequent to the search action, the proceedings under Section 153A of the Act have been initiated in the case of the assessee.

The respondent, Assessing officer after going through the said material seized during the search operations and after following the due procedure of giving reasonable opportunity of hearing to the petitioners and after obtaining necessary approval of the Principal Commissioner of the Income Tax as contemplated in Sub-section (2A) of Section 142 has directed the respective petitioners vide the impugned directions to get their accounts audited by the nominated accountant, and to furnish the report in the prescribed form, also set forth the requisite particulars as prescribed in the questionnaire. Such directions could neither be said to be arbitrary, illegal nor beyond the scope of the said provision.

Mr. Soparkar on behalf of the assessee submitted that if some of the questions, which seem to be bad in law cannot be segregated, the entire impugned order containing the directions be quashed and set aside.

The division bench of Justice Bela M. Trivedi and Justice A.C.Joshi directed the period during which both the petitions remained pending i.e. from the date of issuance of notice till the date of pronouncement of judgment, shall be excluded while counting the period prescribed in the proviso to Sub-section (2C) of Section 142 of the Income Tax Act.

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