- (1.) THE petitioner has challenged the validity and legality of initiating proceedings by issuance of notice dated February 26, 1993, under Section 142 (2a) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), requiring the petitioner to get a special audit of its accounts conducted for the assessment year 1990-91. The challenge is on the ground that the accounts of the petitioner have already been audited being a limited company and the Assessing Officer erred in passing the order under Section 142 (2a) of the Act requiring the petitioner to get a special audit. The plea taken is without any merit. A reading of the language of Section 142 (2a) of the Act makes it clear that in case the Assessing Officer at any stage of the proceedings before him, having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue, is of the opinion that it is necessary so to do, with the previous approval of the Chief Commissioner/commissioner, he may direct the assessee to get the accounts audited by the accountant. The reasons recorded by the Assessing Officer which were duly approved by the Chief Commissioner/commissioner have been attached with the written statement. We have perused those reasons. On a perusal of those reasons, we are satisfied that the Assessing Officer was justified in forming the opinion that the accounts of the company require a special audit.
(2.) THE next argument raised was that under Section 142 (2c) of the Act, the period fixed by the Assessing Officer for the report under Sub-section (1) was three months and this period could not be extended until and unless an application was filed by the assessee for extension of the period. It was contended that the assessee did not file any such application and, therefore, the Assessing Officer erred in extending the period for submission of the report of the special audit under Section 142 (2a) of the Act. There is no substance in this submission either. The proviso to Sub-section (2c) of Section 142 of the Act makes it clear that the Assessing Officer may, either on the application made by the assessee and/or for any good and sufficient reasons, extend the said period which cannot extend to more than 180 days from the date on which the direction under Section 142 (2a) is received by the assessee. It has been stated in paragraph 6 of the written statement that the petitioner did not co-operate with Shri V. P. Vij, Chartered Accountant, who has been appointed as the special auditor for completing the audit and, therefore, the period for submission of the report by the special auditor had to be extended. The petition being without any merit is dismissed. No costs.;