Surya Prakash Kesarwani, J. - (1.) IN this writ petition the petitioner has prayed for the following relief: (i) that a suitable writ, order or direction be issued declaring the proceedings under s. 142(2A) of the IT Act, 1961 as illegal, arbitrary, null and void; (ii) that a suitable writ, order or direction be issued declaring the proceedings for the asst. yr. 2009 -10 in respect of the petitioner have become time -barred as on 31st Dec., 2011; (iii) that a suitable writ, order or direction in the nature of certiorari be issued quashing the letter dt. 29th Dec., 2011 (Annex. 11 to the writ petition) marked to the petitioner and received by the petitioner on 9th Jan., 2012 insofar as it requires the petitioner to furnish the audit report under s. 142(2A) within four months from the receipt of the letter: (iv) that a suitable writ, order or direction in the nature of prohibition restraining and prohibiting the respondents, their officers, servants and agents in proceeding in any manner whatsoever under the provisions of s. 142(2A) of the IT Act; (v) that a suitable writ, order or direction be issued as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case. (vi) To award costs throughout. Briefly stated the facts of the present case are that the petitioner is a partnership firm engaged in manufacture and export of carpets from Bhadohi. For the asst. yr. 2009 -10, the petitioner got his accounts audited by a chartered accountant under s. 44AB of the IT Act, 1961 (hereinafter referred to as "the Act") as the turnover of the firm exceeded the limit of 40 lacs per annum. The petitioner filed his return of income on 24th Sept., 2009 along with a duly audited balance sheet, P & L a/c and the auditor's report for the asst. yr. 2009 -10 (financial year 2008 -09). For the asst. yr. 2007 -08, the case of the petitioner was taken up on scrutiny under s. 143(2)/142(1) of the Act and the assessment order was passed on 31st Dec., 2009 after detailed scrutiny. In respect of the assessment year in question i.e. 2009 -10 the case of the petitioner was taken up for scrutiny. A notice dt. 13th Oct., 2011 under s. 42(1) of the Act was issued by the AO to the petitioner to submit reply on certain queries mentioned in the notice. On 25th Oct., 2011, the petitioner submitted a detailed reply supported by relevant documents. The AO fixed 2nd Nov., 2011 for hearing and required the petitioner to furnish details in respect of interest on STDR, insurance claim, design development charges, import licence, sale bills and stock register. The petitioner submitted the details on 2nd Nov., 2011. The AO further required the petitioner to submit details with regard to valuation of C/S, reason for non -inclusion of insurance claim and interest, bills and supporting documents of expenses of commercial tax, foreign bank charges, ECGC premium, telephone and mobile expenses, electricity expenses, bank interest and bank charges. The petitioner produced the relevant information and documents on the date fixed i.e. 9th Nov., 2011 and 16th Dec., 2011.
(2.) ON 16th Dec., 2011 the AO issued a show -cause notice under s. 142(2A) of the Act fixing 21st Dec., 2011 for reply, forming an opinion that the accounts maintained by the petitioner is complex and special audit is required in the interest of Revenue. This notice was received by the petitioner on 20th Dec., 2011. On the date fixed i.e. 21st Dec, 2011 the petitioner appeared before the AO along with his chartered accountant. The AO asked the petitioner to submit its reply in writing by the next day. On 22nd Dec., 2011, the petitioner submitted a detailed reply through its chartered accountant with its explanation on each of the grounds mentioned in the show -cause notice, and submitted that in case any further information or explanation is required, the petitioner is willing to submit the same. No further enquiries or explanation were sought by the Addl. CIT, Range -1, Varanasi -respondent No. 2, who without passing or serving any order upon the petitioner proceeded to request for approval of CIT under s. 142(2A). With regard to the manner of withdrawal of payment to weavers, the petitioner submitted that the method adopted during the assessment year in question is an old practice and has been accepted by the Tribunal, Allahabad Bench Allahabad in his case for the asst. yr. 2003 -04; and that in view thereof no opinion could be formed for special audit so as to overreach the order of the Tribunal. He relied on the judgment of Hon'ble Supreme Court in the case of Union of India & Ors. vs. Kamalaxmi Finance Corpn. Ltd. : 1992 (Suppl.) SCC 648. In para. 36 of the writ petition, it is stated that the petitioner was surprised to receive a letter dt. 29th Dec., 2011 written by one M/s. V.K. Jindal & Co., Chartered Accountants (hereinafter referred to as special auditors) on 2nd Jan., 2012, informing the petitioner that that they have been appointed as an auditor to audit the accounts of the petitioner for the financial year ending 31st March, 2009 under s. 142(2A) of the Act pursuant to the order of the CIT, Varanasi dt. 23rd Dec., 2011. The petitioner was required to provide documents as mentioned in the said letter. It is stated in para. 38 that the CIT neither passed any order nor informed orally or in writing, or served any order upon the petitioner directing the petitioner to get its books of accounts audited by special auditor as appointed by the AO. In para. 39 it is stated that on 6th Jan., 2012 the petitioner applied for certified copy of the order sheet in respect of asst. yr. 2009 -10, was not made available to the petitioner. It is stated in para. 40 that on 9th Jan., 2012, the petitioner received a copy of the letter dt. 28th Dec., 2011 of the Addl. CIT, Range -1, Varanasi addressed to the special auditor with copy to the petitioner. In para. 44 it is stated that the said letter dt. 28th Dec., 2011 issued by the Addl. CIT, Range -1, Varanasi addressed to the special auditor with copy to the petitioner requiring him to submit the audit report under s. 142(2A) within four months from the date of receipt of this order. This letter was served on the petitioner on 9th Jan., 2012 after the limitation for completing assessment for asst. yr. 2009 -10 expired on 31st Dec., 2012 and thus the assessment proceeding became time -barred. Aggrieved with the letter dt. 29th Dec., 2011 sent by the special auditor intimating their appointment for audit under s. 142(2A) by the CIT, Varanasi for asst. yr. 2009 -10, and the proceedings for special audit, the petitioner has filed the present writ petition.
(3.) WE have heard Sri Nikhil Agarwal, learned counsel for the petitioner and Sri Dhananjay Awasthi for the respondents and carefully considered their submissions. Submissions on behalf of petitioner;