Special Audit is Valid If Its Approval Considers Assessee’s Response, Revenue Comments, and Includes Hearing Opportunity

  • Blog|News|Income Tax|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 13 December, 2023

Recent Posts

Blog, News, Income Tax

No TDS on Payments to Credit Guarantee Fund Trust for MSEs Referred in Section 10(46B) | CBDT

Blog

Assessee to Pursue Pending Proceedings Before Appellate Authority Instead of Filing Writ Petition | HC

Latest from Taxmann

Special Audit u/s 142(2A)

Case Details: Jabalpur Development Authority v. PCIT - [2023] 157 taxmann.com 52 (Madhya Pradesh)

Judiciary and Counsel Details

    • Sheel Nagu & Hirdesh, JJ.
    • Abhishek Oswal, Adv. for the Petitioner.
    • Harshvardhan Topre, Adv. for the Respondent.

Facts of the Case

The approval for special audit under section 142(2A) was accorded for auditing the assessee – Jabalpur Development Authority’s account. On writ, the assessee challenged the said order and submitted that the same was based on subjective satisfaction, was non-speaking and had been mechanically passed.

High Court Held

The High Court held that the competent authority, vide note sheet 18-12-2018, concluded that the assessee maintains ‘cash system’ of accounting and, hence, the balance sheet cannot be prepared.

Based on this, the comments of the AO were sought, which were received online that the requisite audit would be in the interest of the revenue. Thereafter, the approval by the competent authority was granted on 20-12-2018 for special audit under section 142(2A).

It is vivid that due and sufficient opportunity was afforded to the assessee before the sanction was granted for a special audit. So far as the application of mind is concerned, it was evident from the material on record, especially the note sheet, that the competent authority has duly applied its mind by taking into account the response of the assessee and comments of the revenue.

Therefore, there was no illegality in approval for special audit.

List of Cases Reviewed

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied