| Case ID |
431e4ded-cced-4d2e-bcb7-f74cbda86993 |
| Body |
View case body. Login to View |
| Case Number |
W.P. No. 1897 of 2003 |
| Decision Date |
Jan 01, 2004 |
| Hearing Date |
Jun 13, 2003 |
| Decision |
The court held that the approval for special audit under section 142(2A) was invalid as the Assessing Officer did not examine the books of account to form an opinion on their complexity. The Commissioner mechanically approved the proposal without proper examination, violating principles of natural justice. The judgment emphasized that the necessity for special audit must be based on an objective assessment of the accounts, and it must not be done in a whimsical manner. The petition was successful, setting aside the impugned order for special audit. |
| Summary |
In the case involving the West Bengal State Co-operative Bank Ltd. vs. Joint Commissioner of Income Tax, the Calcutta High Court examined the legality of a special audit directive under section 142(2A) of the Income-tax Act, 1961. The court found that the Commissioner approved the special audit without the Assessing Officer adequately examining the books of account, thus failing to fulfill the statutory requirements. The judgment underscored the importance of a thorough examination of accounts before proposing a special audit and highlighted the principles of natural justice that must be adhered to in administrative decisions. This case reinforces the necessity for tax authorities to base their actions on objective criteria rather than assumptions. The ruling is significant for tax practitioners and corporate entities as it clarifies the procedural safeguards in tax audits and the necessity for proper justification in audit proposals. |
| Court |
Calcutta High Court
|
| Entities Involved |
Not available
|
| Judges |
Jyoti Sengupta
|
| Lawyers |
Dr. Pal,
S.K. Kapoor
|
| Petitioners |
West Bengal State Co-operative Bank Ltd.
|
| Respondents |
Joint Commissioner of Income tax
|
| Citations |
2004 SLD 1398,
(2004) 267 ITR 345
|
| Other Citations |
Peerless General Finance & Investment Co. Ltd. v. Dy. CIT [1999] 236 ITR 671 (Cal.),
Bata India Ltd. v. CIT [2002] 257 ITR 622 (Cal.),
Muthoottu Mini Kuries v. Dy. CIT [2001] 250 ITR 455 (Ker.),
H.P. State Forest Corpn. Ltd. v. Jt. CIT [2001] 252 ITR 833 (HP),
Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 (All.),
Controller of Court of Ward v. G.N. Ghorpade AIR 1973 SC 627,
Jeewanlal (1929) Ltd. v. ITO [1978] 115 ITR 465 (Cal.),
Metal Distributors Ltd. v. ITO [1978] 115 ITR 608 (Cal.),
Indo Asahi Glass Co. v. ITO [1996] 222 ITR 534 (Cal.),
Abhay Kumar & Co. v. UOI [1987] 164 ITR 148 (Raj.),
Jt. CIT v. I.T.C. Ltd. [1999] 239 ITR 921 (Cal.),
Pani Devi v. Union of India [2000] 245 ITR 798 (Raj.),
Living Media Ltd. v. CIT [2002] 255 ITR 268 (SC),
Gurunanak Enterprises v. CIT [2003] 259 ITR 637 (Delhi),
M.P. Co-operative Bank Ltd. v. Addl. CIT [1996] 218 ITR 438 (SC),
CIT v. Karnataka State Co-operative Apex Bank [2001] 251 ITR 194 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
142(2A),
44AB
|