- (1.) We have heard Shri S.K. Garg for the petitioner. Shri Ashok Kumar appears for the Income Tax Department.
(2.) By this writ petition the petitioner, a Government company within the meaning of Section 617 of the Companies Act, 1956 incorporated with the object of industrial development in the State of UP, has challenged the order passed by the Chief Commissioner of Income-tax dated 28.4.2011, granting approval under Section 142 (2A) of the Income Tax Act, 1961, for Special Audit, with directions dated 3.5.2011 given by the Deputy Commissioner of Income Tax-VI, Kanpur, for preparing the balance sheet, profit and loss accounts with annexures relating to assessment year 2008-09, to be made by M/s Kapoor Tandon & Co., 24/57, First Floor, Birhana Road, Kanpur, the nominated Chartered Accountants and to furnish the report in the prescribed Form duly signed and verified by the said Chartered Accountant, setting forth for such particulars as may be prescribed under Rule 14-A in Form No. 6B upto 30th June, 2011. The petitioner has also prayed for a direction commanding respondent no. 3 not to proceed further in compliance to the order dated 30.6.2011, read with order dated 3.5.2011, and further not to proceed in making assessment for the assessment year 2008-09 in pursuance to directions dated 3.5.2011. The petitioner has also prayed for directions commanding the respondent no. 4, not to proceed with the Special Audit, under Section 142 (2A) for the financial year 2007-08 during the pendency of the writ petition.
(3.) The petitioner had earlier approached this Court by filing a Writ Petition No. 257 of 2001 on the grounds that sufficient and adequate opportunity was not given to the petitioner before directing Special Audit under Section 142 (2A) of the Act. The writ petition was disposed of on 3.3.2011 with following directions:- "1. The UP State Industrial Development Corporation Ltd. (UPSIDC) (the Petitioner) is a statutory Corporation of State of Uttar Pradesh. It has filed the present writ petition against the order dated 29.12.2010 passed by the Assessing Officer for the assessment year 2008-2009 directing the petitioner to get its accounts audited under sub-section (2A) of section 142 {Section 142 (2A)} of the Income Tax Act, 1961 (the Act). THE FACTS 2. The Petitioner filed its return for the aforesaid assessment year on 30th of September,2008. According to the Petitioner: Its accounts are audited by the auditor appointed by Comptroller & Auditor General of India (the CAG); As auditor was not so appointed by the CAG, the auditor's report was not submitted along with the return; The Petitioner filed the auditor's report before the Assessing Officer on 18.8.2010 as soon as it was made available to it. 3. Subsequently, the Petitioner filed a supplementary report on 15.11.2010 claiming benefit under section 80-I of the Act. 4. A proposal was sent by the Assessing Officer to the Chief Commissioner of Income Tax, Kanpur (the CCIT) on 18.11.2010 for his approval for requiring the petitioner to get its accounts audited under section 142 (2A) of the Act. 5. The CCIT issued notice to the petitioner on 23.11.2010 requiring it to appear before him on 30th of November, 2010. This notice was not on the basis of the aforesaid proposal but on the report of the CIT-II, Agra who is not the Assessing Officer of the Petitioner. 6. On 30th of November, 2010 a fresh notice was issued to the Petitioner to appear on 7.12.2010. 7. The Petitioner appeared on 7.12.2010 and filed its reply. Thereafter, the case was adjourned to 15.12.2010. 8. On 15.12.2010, the Petitioner was given the proposal of the Assessing Officer dated 18.11.2010 and further date was fixed to 21.12.2010. The case was heard and it appears that a supplementary report was called by the CCIT on 21.12.2010. 9. The Assessing Officer sent his supplementary report on 23.12.2010. 10. The CCIT after considering the supplementary report dated 23.12.2010 granted approval on 28.12.2010. Thereafter, the impugned order was passed on 29.12.2010 by the Assessing Officer. 11. We have heard Sri S.K Garg and Sri Ashish Bansal, counsel for the Petitioner and Sri Shambhu Chopra, counsel for the Department. 12. The counsel for the Department was requested to obtain instructions and produce the photostat copy of the order sheet of the CCIT. This has been done. Counsel for the Department. The counsel for the petitioner has also filed a supplementary affidavit that is taken on record. With the consent of the parties, the writ petition is disposed of at this stage. THE DECISION 13. A perusal of the photostat copy of the order sheet of the CCIT indicates that the approval was granted on 14.12.2010. This was before the date fixed namely 15.12.2010 by the CCIT. Subsequently, he again granted approval on 28.12.2010 considering the supplementary report dated 23.12.2010. It is not disputed that copy of this supplementary report was not given to the petitioner. 14. Considering the aforesaid facts, it cannot be said that the petitioner was afforded reasonable opportunity to have his say in the matter. In view of this, the approval granted on 14.12.2010 as well as 28.12.2010 and the order dated 29.12.2010 passed by the Assessing Officer are quashed. 15. The copy of the proposal dated 18.11.2010 has already been given to the counsel for the Petitioner. The copy of the supplementary proposal dated 23.12.2010 has also been handed over to them. The petitioner may appear before the CCIT in the week commencing 28th of March, 2011 and file certified copy of this order. The petitioner along with the certified copy of the judgment will also file his objections against the same. The CCIT may again decide the question of granting approval. Thereafter, the Assessing Officer may pass appropriate order. 16. The first approval is dated 14.12.2010. This approval as well as subsequent approval and orders have been quashed. In view of this, we clarify that the time from 14.12.2010 till the Petitioner files certified copy of this order before the CCIT along with his objections will be excluded in calculating the limitation for passing order under section 142(2A) of the Act. 17. With these observations, the writ petition is allowed.";