Delhi HC dismisses
Patanjali Ayurveda’s writ, upholds initiation of special audit u/s 142(2A) for
AY 2010-11 citing complexity in the accounts; Rejects assessee’s stand that
once its accounts were audited, tax audit report was filed, all the necessary
information was submitted in response to scrutiny notices, AO’s inability to exert
himself to inquire diligently cannot result in a special audit; Though HC
acknowledges that AO cannot fall back upon special audit in all routine cases,
it observes that “AO has carefully outlined what were the salient aspects in
the accounts and returns of the assessee that needed to be looked into and made
the impugned order directing special audit.”; Opines that AO correctly ordered
special audit having regard to - maintenance of large number of imprest
accounts involving sizeable amount for which expenditure details not furnished,
revision of returns whereby income offered was reduced substantially,
assessee’s ‘first-time’ claim of deduction u/s. 80-IC needed inquiry; Further
notes that AO had referred to the three segments or sources of revenue of the
assessee and had held that it is required to identify the method and the
relevant accounting standard applicable for recognition of income from these
revenues and also to ascertain the correctness of the income recognized.:HC
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