Sahara India International vs Commissioner of Income Tax

The Petitioner challenges an order dated 22-3-2006 passed by the Assistant Commissioner of Income Tax (ACIT), Central Circle-6, New

Delhi u/s 142(2A) of the Income Tax Act, 1961 (hereinafter referred to as the Act) to the following effect:

Having regard to the nature and complexity of your accounts and interest of the revenue and being of the opinion, it is necessary so to do, I hereby

direct you to get your accounts audited u/s 142(2A) of the Income Tax Act, 1961 for financial year 2002-03 pertaining to assessment year 2003-

04 by M/s. P. Bholusaria & Co., 2611, Shakti Nagar, Delhi and to furnish a report on such audit in the prescribed proforma duly signed and

verified by the CA. The audit report u/s 142(2A) should be furnished by you to the undersigned within a period of 105 days from the date of the

directions received by you.

The Petitioner sought for and was provided detailed reasons that led to the making of the above order. The Petitioner challenges the said order

dated 22-3-2006 principally on the ground that it suffers from non-application of mind inasmuch as the Petitioner has already supplied all the

details sought for by the department and further that the said order does not indicate that the Officer concerned has examined the books of account

of the Petitioner which is a sine qua non for invoking the power u/s 142(2A) of the Act.

We have considered the detailed decisions of this Court in Gurunanak Enterprises and Bhagya Rekha Enterprises Vs. The Commissioner of

Income Tax and Another, and Yum! Restaurants India Pvt. Ltd. Vs. Commissioner of Income Tax, . Our attention has been drawn to the

judgment of the Allahabad High Court in Jhunjhunwala Vanaspati Ltd. Vs. Assistant Commissioner of Income Tax and Another (No. 1), . In

Jhunjhunwala Vanaspati Ltd.''s case (supra), the Division Bench has taken the view that no civil consequences follow and Therefore, the High

Court should not interfere in its decision u/s 142(2A) of the Income Tax Act. We note that in Gurunanak Enterprises'' case (supra) as well as Yum

Restaurant India (P.) Ltd.''s case (supra), the Benches of this Court took the view that civil consequences would follow. Our attention has also

been drawn to decision in Ramesh Chand Industries Ltd. v. Union of India (1998) 100 Taxman 570 (Del) . Furthermore, in Living Media Ltd. Vs.

Commissioner of Income Tax and Another, . The Division Bench of this Court dismissed a Writ Petition ""keeping in view of the simple fact that the

petitioner has voluminous details running into 500 pages to explain the queries raised by the Assessing Authority. Further details running into about

thousand pages were also filed by the assessed before the Assessing Authority."" When this decision was carried in appeal, the Apex court declined

to interfere.

From the records before us, it is evident that a number of hearings have been granted to the Petitioner before the impugned order was passed.

This decision was forwarded to the Commissioner by the Assistant Commissioner in terms of letter dated 14-3-2006. A perusal of the Assistant

Commissioner''s letter discloses that the available materials were considered. In the circumstances, the impugned order cannot be said to suffer

from non-application of mind. The decision reflected in the impugned order cannot be said to be whimsical, capricious or punitive or arrived at in a

mechanical manner. No ground for interference is made out in this petition. Accordingly, this writ petition is dismissed. Application also stands

dismissed.