Special Audit-Section 142(2A)
If, at any stage of the proceedings before him, the Assessing Officer, having regard to
the nature and complexity of the accounts,
volume of the accounts,
doubts about the correctness of the accounts,
multiplicity of transactions in the accounts or
specialised nature of business activity of the assessee, and
the interests of the revenue,
is of the opinion that it is necessary so to do, he may, with the previous approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, direct the assessee to get the accounts audited by a chartered accountant, nominated by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the Assessing Officer may require.
Opportunity of being heard Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard. (Proviso)
The SC in Rajesh Kumar v DCIT (2006) 287 ITR 91 held that direction for special audit u/s 142(2A) is not administrative and is of quasi-judicial nature and notice to the assesee should be given.
Time limit for furnishing of Audit Report-Section 142(2C)
Every report under sub-section (2A) shall be furnished by the assessee to the Assessing Officer within such period as may be specified by the Assessing Officer.
Assessing Officer may, suo motu, or on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit ; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed 180 days from the date on which the direction under sub-section (2A) is received by the assessee.
Opportunity of being heard-Section 142(3)
The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub-section (2) or any audit under sub-section (2A) and proposed to be utilised for the purposes of the assessment.
|Section 142(2B)-The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or otherwise.
Special audit fee to be paid by CG- Proviso to Section 142(2D)- Where any direction for audit under sub-section (2A) is issued by the Assessing Officer, the expenses of, and incidental to, such audit (including the remuneration of the Accountant) shall be determined by the Chief Commissioner or Commissioner in accordance with such guidelines as may be prescribed and the expenses so determined shall be paid by the Central Government.
Failure to produce accounts and documents-Section 276D
If a person wilfully fails to produce, or cause to be produced, on or before the date specified in any notice served on him under section 142(1), such accounts and documents as are referred to in the notice or wilfully fails to comply with a direction issued to him under section 142(2A) of that section, he shall be punishable with rigorous imprisonment for a term which may extend to one year and with fine.