Chet Ram Ravi Kumar Vs DCIT (ITAT Chandigarh)
Conclusion: Reference for special audit u/s 142(A) was invalid and the assessment orders so passed in the extended time were held to be barred by limitation.
Held: Assessee contended that assessment order being time barred, having been passed in the extended time limit on account of reference made for conducting special audit u/s 142(2A), which reference was not in accordance with law. Authority questioned the jurisdiction of the ITAT to adjudicate the validity of the reference for special audit u/s 142(2A). It was held that since undisputedly the issue raised of the assessment order passed being barred by limitation on account of an invalid reference made for special audit, arose in the background of facts which were identical to that in the case of M/s Sunder Mal Satpal, it stood covered by the decision of the ITAT in the said case, following which it was concluded that the reference for special audit in the present cases, u/s 142(A) was invalid and the assessment orders so passed in the extended time were held to be barred by limitation.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
All the above appeals have been preferred by the same assessee against separate orders of the Learned Commissioner of Income Tax (Appeals)-1, Ludhiana [(in short the ‘Ld. CIT(A)] all dated 25.03.2013 relating to assessment years 2003-04 to 2005-06 respectively, passed u/s 250(6) of the of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’).
It was common ground that identical issue was involved in all the above appeals, hence, the same were taken up together for hearing and are being decided by a common order for the sake of convenience.
2. Ld. Counsel for the assessee pointed out that identical grounds had been raised in all the appeals which read as under:
“1. That the Ld. Commissioner of Income Tax (Appeals) gravely erred in upholding assessment made u/s 153A read with section 143(3) which was otherwise time barred in as much as the very reference u/s 142(2A) was unwarranted against law and facts on the file.
2. The assessment framed on the basis of audit report u/s 142(2A) deserves to be quashed in as much as the special auditor has travelled beyond the provisions of section 142(2A) for the purpose of conducting the audit.”
3. Referring to the above, the Ld.Counsel for the assessee stated that in all the three appeals a common solitary ground was being pressed relating to the assessment order being time barred, having been passed in the extended time limit on account of reference made for conducting special audit u/s 142(2A) of the Act, which reference was not in accordance with law. As for the other ground, the Ld.Counsel for the assessee stated that he was not pressing the same before us.
4. With respect to ground being argued, the Ld.Counsel for the assessee stated that the issue raised therein stood covered in favour of the assessee by the decision of the ITAT in the case of Sunder Mal Satpal Vs. DCIT in ITA Nos. 154 to 157/Chd/2013 vide order dated 15.06.2018. The Ld.Counsel for the assessee pointed out that the facts in the case of M/s Sunder Mal Satpal (supra) were identical to the case of the assessee. He stated that the assessee had been subjected to search proceedings u/s 132 of the Act on 24.10.2007 and during search certain incriminating documents relating to M/s Sunder Mal Satpal, who was a sister concern of the assessee, were found and seized. Accordingly proceedings u/s 153C of the Act were initiated and assessment completed on M/s Sunder Mal Satpal. He contended that during assessment proceedings of both the assessee and M/s Sunder Mal, a reference for special audit u/s 142(2A) of the Act was made by a common letter and the reasons for making the reference was identical. Our attention was drawn to the letter of the AO dated 13.01.2010 directing the assessee and M/s Sunder Mal Satpal to get their accounts audited u/s 142(2A) of the Act, placed at Paper Book page Nos.8 and 9 as under:
“No.ACIT/CC-III/Ldh/489
Office of the
Asstt. Commissioner of Income Tax
Central Circle-III, Ludhiana.
Dated Ludhiana the 13.01.2010
To
Shri Ravi Kumar Bansal c /o
M/s Chet Ram Ravi Kumar,
2-New Grain Market, Muktsar.
Sir,
Sub:- Regarding Special audit u/s 142(2A) of Income Tax Act, 1961 in the cases of M/s Chet Ram Ravi Kumar, M/s Sunder Mal Sat Pal & Sh.Ravi Kumar Bansal of Muktsar.
* * *
The Commissioner of Income Tax (Central), Ludhiana Vide Order No. CIT(C)/Ldh/ (JB/ 09-10/ 4166 dated 23/12/2009 the following cases have been approved for special audit and appointed of M/s P.C.Goyal & Company, 62 New Lajpat Nagar, Pakhowal Road, Ludhiana for this purposes.
