INCOME TAX ACT, 1961

Section 142(2A)

Assessment - Special audit under section 142(2A) - Assessee pleading no reasonable opportunity due to non-affording of personal hearing before directing for special audit -

Assessee by way of writ petition challenged order passed directing special audit of assessee's accounts under section 142(2A) on the ground that non-affording of personal hearing amounted to no reasonable opportunity of being heard given to assessee to respond to show-cause notice. Held: A reasonable opportunity of being heard normally includes a show-cause notice; disclosure of material adverse to the noticee; an opportunity to party likely to be adversely effected to make representation against such a notice and a reasoned order; howsoever brief, taking in account such representation, if so made. The requirement of personal hearing, however, is normally not seen as necessary concomitant to a reasonable opportunity of being heard. On perusal of record, it was apparent that apart from show cause notice, AO had given several other opportunities to assessee by calling upon assessee to furnish its response along with documentary evidence. After issuing statutory Notice, another opportunity was given when there was a change of incumbent in office of AO. Also, notices under section 142(1) along with questionnaire were issued to assessee followed by a reminder. Despite aforesaid opportunities, assessee was unable to answer queries raised by AO to his satisfaction. In the impugned order, AO had threadbare considered each response to queries raised and concluded that accounts of assesee were voluminous and complex. Thus, perequisite under the Act was met and there was no reason to entertain instant petition.

Relied:Neesa Leisure Limited v. Dy. CIT (2013) 35 Taxman 331 (Guj) : 2014 TaxPub(DT) 0170 (Guj-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2017-18

INCOME TAX ACT, 1961

Section 142(2A)

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