I.T.R. Nos. 41 and 42 of 1997 (Assessment Year: 1984-85). Case: Commissioner of Income Tax Vs N.C. John and Sons Ltd.. High Court of Kerala (India)
| Case Number | I.T.R. Nos. 41 and 42 of 1997 (Assessment Year: 1984-85) |
| Counsel | For Appellant: P.K.R. Menon, Senior Adv. and For Respondents: C. Kochunny Nair, George K. George and Dale P. Kurien, Advs. |
| Judges | P.K. Balasubramanyan and C.N. Ramachandran Nair, JJ. |
| Issue | Income-Tax Act, 1961 - Sections 153(1)(iii), 153(3) |
| Citation | 2002 (253) ITR 524 (Ker) |
| Judgement Date | November 13, 2001 |
| Court | High Court of Kerala (India) |
Judgment:
P. K. Balasubramanyan, J.
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These references are at the instance of the Revenue and they arise out of the separate decision rendered by the Income Tax Appellate Tribunal in I. T. A. Nos. 979 and 1028 of 1989, the first filed by the assessee and the second filed by the Department. Both the references relate to the assessment year 1984-85. The following questions, as arising out of the orders of the Income Tax Appellate Tribunal, have been referred to us for opinion.
1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding:
(i) the direction to have an audit by an accountant in terms of Section 142(2A) was without legal sanction?
(ii) the proceedings initiated under Section 132 of the Income Tax Act on February 23, 1984, had come to an end with the passing of the order under Section 132(5) on May 7, 1984. Hence, from the records it is seen that no proceedings were pending before the Assessing Officer?
(iii) 'it is only when some proceedings are pending the Assessing Officer is empowered to invoke the provisions of Section 142(2A)?'
2. Whether, on the facts and in the circumstances of the case and in view of Clause (iii) of Explanation 1 to Sub-section (3) of Section 153 (by which 'the period commencing from date on which the Income Tax Officer directs the assessee to get his accounts audited under Sub-section (2A) of Section 142 and ending with the date on which the assessee furnishes a report on such audit under that sub-section' to be excluded) the Tribunal is right in law in holding that the assessment should have been completed on or before March 31, 1967, but as it was completed on September 23, 1987, it is barred by limitation?
3. Whether, on the facts and in the circumstances of the case, the special audit ordered under Section 142(2A) was an unauthorised one?
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The relevant previous year for the assessment year 1984-85 ended on June 30, 1983. The return was due on June 30, 1984. But in the meanwhile, there was a search in the premises of the assessee on February 23, 1984, and certain documents, cash and other materials were recovered. On May 7, 1984, an order under Section 132(5) of the Income Tax Act, 1961, was passed. The books of account were retained with the Department. On September 1, 1984, the Assessing Officer invoked the provisions of Section 142(2A) of the Act and directed the assessee to get the accounts audited by an auditor nominated by the Commissioner and to obtain the report of such audit in the...
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