V. VISHNUDAS KINI vs DEPUTY COMMISSIONER OF INCOME TAX

The petitioner is challenging Ext.P8 order ordering special audit u/s 142(2A) of the Income Tax Act, 1961. According to the petitioner, the above was ordered after appeal against penalty proceedings. The petitioner has got a qualified accountant and there is no complexity. Special audit u/s 142(2A) is unnecessary. The petitioner also relied on the Board''s circular on this aspect regarding special audit. Even before the appeal was allowed, by order dated 7-12-1998, the Commissioner ordered as follows:

"Since the gross receipt is more than 2 crores and also the expenses under various heads claimed to be on behalf of various clients, the volume of vouchers and bills will be very big. Those may have to be linked with the client''s business account. For e.g., trailor hire charges claimed at Rs. 30,16,209, Demurages Rs. 31,77,655, sundry expenses Rs. 6,89,424. The admissibility of correctness of the expense cannot be verified without a laborious task. In view of the complicated nature of the assessee''s account, I am afraid, considerable revenue loss will be there if the accounts are not subjected to audit. In the circumstances, I am of the opinion that the accounts of the assessee may be got audited by a chartered accountant nominated by the Commissioner invoking the provisions of section 142(2A) of the Income Tax Act."

In the above order, the reasons for a special audit u/s 142(2A) are very clearly stated and reasons why complexity arose in reconsidering the above. Therefore, Ext.P8 order has to be read along with the order dated 7-12-1998 passed by the Deputy Commissioner.

In the facts and circumstances of the case, I am of the opinion that there is nothing wrong in issuing Ext.P8 as reasons stated in the order dated 7-12-1998 are valid. Therefore, I see no ground in this original petition and the original petition is dismissed.