DEOHOOTI JANMEJAY VYAS V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2)

SCA/8544/2021

AI Insights

The case revolves around the challenge by Deohooti Janmejay Vyas against the orders issued by the Assistant Commissioner of Income Tax, Central Circle 2(2), which directed her to get her accounts audited by a special auditor under Section 142(2A) of the Income Tax Act. The petitioner argued that the orders were beyond the scope of the Income Tax Act and violated principles of natural justice. The respondent countered by highlighting the complexity and volume of the seized materials during the search operations at the Dishman Group, where Vyas was a key person. The court's decision leaned on the interpretation of Section 142(2A), supporting the need for a special audit given the circumstances presented.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 771616 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 23-11-2021
• Assessment Year: misc
• Other Referred Cases: Tehmul Burjor Sethna vs. Assistant Commissioner of Income Tax, Sahara India (Firm) vs. Commissioner of Income Tax, Rajesh Kumar vs. Commissioner of Income Tax, Dishman Carbogen Amcis Limited vs. Assistant Commissioner of Income Tax
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: M R BHATT CO
• Assessee Lawyers: SWATI SOPARKAR
• Keywords: Complexity of accounts; Income Tax; Natural Justice; Search & Seizure; Special Audit
• Section: 142(1); 132; 142(2A); 133A; 152(2A)

Judgement Text

"C/SCA/8544/2021 ORDER DATED: 23/11/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 8544 of 2021 ============================================================== DEOHOOTI JANMEJAY VYAS Versus THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2) ================================================================ Appearance: MRS SWATI SOPARKAR(870) for the Petitioner(s) No. 1,2,3 M R BHATT & CO.(5953) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 23/11/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) The petitioner by way of this present petition under Article 226 of the Constitution of India challenges the order disposing of the objections, passed by the respondent under Section 142(2A) of the Income Tax Act (hereinafter referred to as the ‘Act’) dated 8.4.2021 as also the directions issued dated 22.4.2021 directing the petitioner to get the accounts audited by an Accountant under the provisions of Section 152(2A) for the A.Y 2014-2015 to 2020-2021, being the act beyond the scope of provisions of IT Act and for the same being allegedly illegal and contrary to the principles of natural justice. 2. According to the petitioner, she derives income from salary, capital gains and from other sources. Search seizure and survey actions were conducted under Sections 132/133A Page 1 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 in “DISHMAN Group” on 19.12.2019 and continued on subsequent dates. Various materials, documents, and voluminous data have been seized at premises of the Company as also the residential premises of the petitioner. 3. On 8.2.2021 and 11.2.2021, the respondent issued notices under Section 142(1), seeking numerous details. At that time the assessment was getting time barred on 31.3.2021. Thereafter on 27.2.2021 the due date of the assessment was extended to 30.9.2021. As the details concerned a span of 7 years, the petitioner submitted those details after compiling the same. 4. It is averred that the respondent issued the notice under Section 142(2A) on 19.3.2021 and furnished the satisfaction drawn to refer the case to the independent auditor. 5. The petitioner objected to the same and also sought the statements as well as the materials to resist this action by filing reply to the show cause noti. On 31.3.2021, the petitioner received the communication from respondent to collect the copies of requisite document on or before 1.4.2021 through the authorised representative. On 5.4.2021 the petitioner informed the respondent that the copies of statement were not provided and on 6.4.2021, the petitioner was provided with the copies of statement of only Mr. Bharat Padia and Chirag Thakkar and not of Mr. Rajiv Shah. Therefore, on 7.4.2021 the petitioner wrote a letter seeking copies of seized materials from Rajiv Shah and findings of investigation wing. Instead of providing investigation papers Page 2 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 to the petitioner, the respondent passed order on 8.4.2021 disposing off the objections. 6. The respondent issued the direction under Section 142(2A) on 22.4.2021. Therefore, the present petition is preferred with following prayers: “7.(a) quash and set aside the impugned order dated 8.4.2021 at Annexure A1 to this petition. (b) quash and set aside the impugned directions of 22.4.2021 at Annexure A2 to this petition. (c ) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the impugned directions of 22.4.2021 at Annexure A2 to this petition. (d) any other and further relief deemed just and proper be granted in the interest of justice; (e) to provided for the cost of this petition.” 7. This Court on 25.6.2021 while issuing the notice and making it returnable on 12.7.2021 passed the following order: “1. Notice, returnable on 12th July 2021. 2. It is submitted by learned advocate Mr. Bandish Soparkar for Mrs. Swati Soparkar for the petitioner that the impugned order passed by the respondent authority is ex facie bad and has been passed without any application of mind inasmuch as, the powers under section 142(2A) of the Income Tax Act, 1961 could be exercised by 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, however, in the instant case, the petitioner has income from salary, capital gains and income from other sources and therefore, she is neither obliged to maintain any books of account nor has maintained any the books of account. Under the circumstances, the respondent could not have directed the petitioner to get her books of account audited by the nominated auditor. He submitted that the said objection was also raised by the petitioner before the concerned authorities. Page 3 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 3. Having regard to the above submissions, the operation and implementation of the impugned direction under section 142(2A) of the IT Act dated 22.04.2021 in case of the petitioner, is stayed till the returnable date.” 8. The Court also protected the petitioner by staying the operation and implementation of the directions issued under Section 142(2A) of the I.T Act. 9. Learned Senior Advocate Mr. M.R Bhatt on 25.10.2021 made a request that in four other matters of the group company, the auditor has already tendered the report and he, therefore, made a request to modify the order which was the reason for the auditor not to complete his task in relation to the present petition. 9.1 Two of these matters were concluded before this Court reported in (2020): 118 taxmann.com 444 (Gujarat) (2019) 418 ITR 596 and these decisions were challenged before the Apex Court and therefore, this Court modified order of stay dated 25.10.2021 in the following manner : 10. Without prejudice to the right of the petitioner, the order of stay is modified this wise:- “ The Special Auditor shall confine himself to the scope of Section 142(2A) of the Income Tax Act read with Rule 14(A) and Form 6(B) of the Income Tax Rules. The petitioner shall co-operate in the inquiry proceedings being conducted by the Special Auditor.” 11. We notice that the affidavit-in-reply on behalf of the respondent is filed by one Mr Brijlal Meena, CIT Page 4 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 Central Circle II, Ahmedabad where all the averments have been denied categorically. According to the respondent, the Assessing Officer noted the existence of various factors which included the nature and complexity of accounts, volume of accounts, the correctness of accounts multiplicity of transaction in the accounts so also the specialised nature of business activities of the assessee and therefore, the issue with regard to the non-maintenance of books of accounts would have no bearing according to the respondent. It also sought to rely upon the decision of Tehmul Burjor Sethna reported in (2019) 418 ITR 596. 11.1. It is further contended by the respondent that the principles of natural justice have been adhered to fully and due satisfaction has been arrived at with respect to the reference which was to be made to the special audit. 11.2. According to the respondent, the search, seizure and survey actions under Section 132A were conducted on the ‘Dishman Group’ and during the course of the said actions, the voluminous incriminating material/documents were found and during the search proceedings the digital evidence in the form of hard drive, mobile data and other such devices were found and seized. The total volume of digital data runs into more than 50 plus HD drive of 1 TB each and there is also SAP software data. The loose material itself seized during the course of action ran into more than 22,000 pages. The petitioner is averred to be a key person in the ‘Dishman Group’ and, therefore, the satisfaction, according to the respondent, has been correctly reached and the principles of natural justice have been duly Page 5 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 complied with and hence, the petition deserves to be rejected in summary. 11.3. All the grounds which have been raised including lack of jurisdiction while initiating proceedings under Section 142(2A) have been duly dealt with. It is urged that the contentions raised of lack of jurisdiction are bereft of any merit. It is further contended by the respondent that the petitioner was firstly provided the opportunity to explain the entire transaction from the material which has been seized. However, she has chosen to remain silent and has not complied with the statutory notices issued under Section 142(1) of the Act. In absence of any specific explanation on behalf of the petitioner and considering the complexity of material realised by the authority and alleged bogus accomodative transaction as could be culled out from the data base, old case records and documents seized, without the aid and assistance of special Auditor, the Assessing Officer could not have understood fully all necessary aspects. 11.4 According to the respondent, the transaction entered into by the petitioner is highly webbed and cohesive, leading to the difficulties in understanding the same and arriving at true and clear picture without any assistance of a special auditor. 12. The respondent additionally demonstrated in SCA No. 7620 of 2021, the case of Dishman Carbogen Amcis Limited, where terms of reference has been formulated. A chart depicting relevancy thereof to the provisions of Page 6 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 Section 142 (2A) read with Form 6B also have been filed. It is reiteratively emphasised that the nomenclature of the books of accounts would include the seized documents, in the form of soft copies, pen drive,seized papers etc. 13. Affidavit-in-rejoinder is filed for on behalf of the petitioner, according to whom there are no books of accounts for A.Y 2014-2015 to 2020-2021 and hence, there is no question of complexity and volume of accounts and therefore, the reference under Section 142(2A) has no basis and the terms of reference issued under Section 142(2A) of the Act as well as all the proceedings pursuant thereto are void and bad in law. 14. It is further the say of the petitioner in his rejoinder that if the Assessing Officer has no assistance to understand the seized documents after a search action, an appraisal report is made by the ADIT/DDIT(Inv) after a search which sends the same to the Assessing Officer for the very same assessment purpose. The report would encompass complete and thorough analysis of the seized documents by the ADIT/DDIT. Therefore, the delegation of work of both the Investigating Officer as well as Assessing Officer upon the Special Auditor is bad. The DDIT (Inv.), Unit 1(3), Ahmedabad has quantified undisclosed income of Rs 3,949 crores which the respondent himself has relied upon in his satisfaction note. Rest of all the contentions raised have been denied emphatically. 15. We have heard extensively the learned Advocate Mr Bandish Soparkar for the petitioner who has emphatically Page 7 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 argued before us questioning the very jurisdiction of the officer in resorting to the provisions under Section 142(2A). According to him, the petitioner is not required to maintain the books of accounts. 16. Except a thin connection in one of the papers seized at the time of search and seizure and survey actions at the company premises, there is nothing to involve the petitioner who is not even expected under the law to maintain the books of accounts. Therefore, if at all the Assessing officer needed any assistance, a separate machinery is created by the department where the analysis of the seized material by way of a appraisal report can be looked into. It is contended that the definition of the books of accounts under Section 2(12A) of the Act would not include the documents, loose papers, materials etc. It is further the say of the learned Advocate for the petitioner that the two of the matters which have been decided by this Court were relating to the search and seizure carried out at the premises of the company and the concerned company itself, while in the instant case it is the person in whose relation even some material is noticed, the reference to the special auditor is completely undesirable and is without any jurisdiction. Here it is not a case of initiating the actions under Section 153(c) nor would the petitioner question the proceedings as may be initiated against the petitioner. However this reference under Section 142(2A) is completely without jurisdiction and misplaced. He therefore, emphasised that non-entertainment of the other petitions would have no bearing so far as the present petition is concerned. It is also pointed out to this Court as to how in Page 8 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 case of the company as well as the two other petitioners being Special Civil Application No. 9331 of 2021 and Special Civil Application 11249 of 2021, the Special Auditor has come out with the report. The complete protection given by this Court in relation to the present petitioner had not made it feasible for the Special Auditor to work in her connection and there is a complete co-operation offered inasmuchas a software SAP used as page software which is being made available to the team. All facilities and amenities have been offered and the officer has carried out scrutiny, sitting in the premises of the company. It is further urged that so far as the name of the present petitioner is concerned is only restricted to B6 and no where it is shown by the respondents that there is any complexity or multiplications so far as the accounts of the petitioner are concerned. He has questioned the jurisdiction to assess the petition but for special audit serious objection is raised. It is further his say that the objections which have been disposed of are also done mechanically without individually examining the case of the petitioner . 17. Learned Senior Advocate Mr. Bhatt has taken us through the entire material and urged that the person wise segregation is difficult from the voluminous material found from the premises of the company and also from the residential premises. The petitioner, her son and husband as well as three more persons are key persons. The material unearthed would surely require the special audit as they are complicated details. The provision of law would permit such reference. According to him, the name of the petitioner is quite apparently being found from the seized Page 9 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 material. The loose papers when scrutinised unaccounted income is also revealed. The specialised nature of the accounts which also would entitle the exercise of powers under Section 142(2A) of the I.T Act. He has also pointed out from the averments raised in the petition to urge that the petitioner has taken a vault face while taking a stand that Section 142 (2A) would not have any applicability in the case. It is further urged that matter which has been decided by the co-ordinate Bench, reported in (2020)118 Taxmann.com 444 would have a direct bearing on the case as the terms of reference in all the matters are identical. According to him the challenge was made by the Company in the case of Dishman Carbogen Amcis Ltd., by way of Special Leave to Appeal (C) 15782 of 2021 and the same has been dismissed. 18. After hearing the learned counsels on both the sides, the Court chose not to interfere with the judgment and order of this Court. 19. Thus, having heard both sides and also on extensively considering the material which has been placed before this Court and so also noticing the decision of this Court in case of Dishmangroup Vs Assistant Commissioner (supra), at the outset challenge which has been made by the petitioner would deserve attention. The petitioner is not questioning the jurisdiction of the Assessing Officer to assess the petitioner in relation to the material which has been seized on the search of the premise of the company as well as the residence, however, for reference to the special audit the serious issue has been raised. The satisfaction Page 10 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 arrived at while disposing of the objections is under challenge and thus essentially is on the ground that Section 142 (2A) does not permit any reference and search in relation to the company. 20. It would be apt to reproduce Section 142 (2A) which read as under : 142 (2A) If, at any stage of the proceedings before him, the 7 Assessing] Officer, having regard to the nature and complexity of the accounts of the accounts , volume of the accounts, doubts about the correctness of the accounts, multiplicity of transaction in accounts, or specialized nature of business activities 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 9 Chief Commissioner or Commissioner], direct the assessee to get the accounts audited by an accountant as defined in the Explanation below sub- section (2) of section 288, nominated by the 9 Chief 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 10 Assessing] Officer may require. 21. At this stage, under the heading of the inquiry before assessment provides that at any stage of proceeding before the A.O having regard to the nature and complexity of the accounts, volume of accounts, doubts about the correctness of the accounts, multiplicity of the transactions in the account or specialised nature of business activity of assessee and in the interest of the revenue, is of the opinion that it is necessary to get the accounts audited by an Accountant, as defined in the explanation below sub Page 11 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 section 2 of section 288 with a previous approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, can direct the assessee to get the accounts audited by an Accountant and infer and direct to furnish the report of such audit in the prescribed form duly signed and verified by such Accountant by setting forth such particulars as may be prescribed. It is quite clear from the very provisions that it is a discretion to be used by the A.O at any stage of proceedings before them. He needs to arrive at a satisfaction that the nature and complexity of the accounts its volume, its correctness the multiplicity of transactions or the specialised nature of activity of the assessee are such in the interest of the revenue, he may have to get the accounts audited by an Accountant as defined under Subsection 2 of Section 288. Explanation to sub Section 2 of Section 288 says that Accountant would mean chartered accountant as defined in clause (b) of sub section 1 of Section 2 of the Chartered Accountant’s Act, 1949, who holds a valid certificate of practice under Sub Section (1) of Section 6. 22. The very issue came up for consideration before this Court in case Tehmul Burjor Sethna Vs Assistant Commissioner of Income Tax Cirle 1(1) reported in (2020) 118 taxmann.com 444 (Gujarat) ;(2019) 418 ITR 596, reference of the same would be necessary at this juncture. 23. It was the case where the petitioner was a practising Chartered Accountant and was filing regular return of income. The source of income of the petitioner was from Page 12 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 house property, remuneration from partnership firm, capital gain and other resources. It was his case that he was not required to prepare the personal books of accounts nor was he oblidged to maintain books of accounts under any of the provisions of the Income Tax Act. A search operation came to be conducted at the residence and the office premises of the petitioner pursuant to which the notice under Section 153 (A) of the Act had been issued for assessment years 2011-2012 to 2016-2017. The case of the petitioner was that the respondent had issued the show cause notices raising various queries to which he had replied. However, the respondent issued a notice under Section 142 (2A )to the petitioner proposing to get the petitioner’s account audited for the assessment year 2011-2012 to 2017-2018 by an Accountant as defined under the explanation to Section 288(2) and nominated by Principal Commissioner, Income Tax, Ahmedabad for the purpose. The petitioner had raised objections to the said proposal of Special audit under Section 142(2A) and objections were disposed of by the respondent wherein he was permitted a personal hearing also in relation to the same and he communicated the request for dropping the show cause notice issued for proposal of special audit. The very ground which is raised by the petitioner in the present petition, he had raised stating that he being a partner of a firm is not statutorily required to maintain the books of accounts and after scrutiny assessment for the earlier years, his assessment has been accepted by the department and thus, the basic condition for invocation of powers under Section 142 (2A) is not Page 13 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 satisfied. The respondent lacks jurisdiction to exercise this power of Section 142 (2A). It was also contended that in absence of accounts the question of examining complexity in accounts simply would not arise and the A.O has not even called for the books of accounts at any point of time. It is further submitted that the A.O was aware of the fact that the petitioner was neither maintaining the books of accounts nor required to maintain the books of accounts and he has furnished the year wise statement of affairs, income and expenditure receipt and payments and there was nowhere any revelation in what manner the nature of complexity would drive the officer to refer the matter to the special audit. All these have been dealt with by this Court extensively in the following manner negating these contentions: 1. At this stage, it may be germane to refer to the provisions of section 142 of the Act, which read thus: 142. Enquiry before assessment.— (1) For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under Section 115-WD or Section 139 or in whose case the time allowed under sub-section (1) of Section 139 for furnishing the return has expired a notice requiring him, on a date to be therein specified,— (i) where such person has not made a return within the time allowed under sub-section (1) of Section 139 or before the end of the relevant assessment year, to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or: Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of Section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this subsection. (ii) to produce, or cause to be produced, such accounts or documents as the Assessing Officer may require, or (iii) to furnish in writing and Page 14 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the Assessing Officer may require: Provided that— (a) the previous approval of the Joint Commissioner shall be obtained before requiring the assessee to furnish a statement of all assets and liabilities not included in the accounts; (b) the Assessing Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year. (2) For the purpose of obtaining full information in respect of the income or loss of any person, the Assessing Officer may make such enquiry as he considers necessary. (2-A) 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 an accountant, as defined in the Explanation below sub-section (2) of Section 288, 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: Provided that the 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. (2-B) The provisions of sub-section (2-A) 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. (2-C) Every report under sub-section (2- A) shall be furnished by the assessee to the Assessing Officer within such period as may be specified by the Assessing Officer: Provided that the 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 one hundred and eighty days from the date on which the direction under sub-section (2-A) is received by the assessee. (2-D) The expenses of, and incidental to, any audit under sub-section (2-A) (including the remuneration of the accountant) shall be determined by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner (which determination shall be final) and paid by the assessee and in default of such payment, shall be recoverable from the assessee in the manner provided in Chapter XVII-D for the recovery of arrears of tax: Provided that where any direction for audit under subsection (2-A) is issued by the Assessing Officer on or after the 1st day of June, 2007, the Page 15 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 expenses of, and incidental to, such audit (including the remuneration of the Accountant) shall be determined by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner] in accordance with such guidelines as may be prescribed and the expenses so determined shall be paid by the Central Government. (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 enquiry under sub-section (2) or any audit under sub-section (2-A) and proposed to be utilised for the purposes of the assessment. (4) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year. 11.1 Sub-section (2A) of section 142 of the Act came to be amended by the Finance Act, 2013, prior thereto, it reads thus: “(2A) If, at any stage of the proceedings before him, the Assessing Officer, 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, he may, with the previous approval of the Chief Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the Chief 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.” 12. In the context of the unamended provisions of section 142(2A) of the Act, the Supreme Court in Sahara India (Firm) (1) v. Commissioner of Income Tax, (2008) 14 SCC 151, held thus: “6. A bare perusal of the provisions of sub-section (2- A) of the Act would show that the opinion of the assessing officer that it is necessary to get the accounts of the assessee audited by an accountant has to be formed only by having regard to: (i) the nature and complexity of the accounts of the assessee; and (ii) the interests of the Revenue. The word “and” signifies conjunction and not disjunction. In other words, the twin conditions of “nature and complexity of the accounts” and “the interests of the Revenue” are the prerequisites for exercise of power under Section 142(2-A) of the Act. Undoubtedly, the object behind enacting the said provision is to assist the assessing officer in framing a correct and proper assessment based on the accounts maintained by the assessee and when he finds the accounts of the assessee to be complex, in order to protect the interests of the Revenue, recourse to the said provision can be had. 7. The word “complexity” used in Section 142(2-A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT, (1998) 171 ITR 634, it is a nebulous word. Its dictionary meaning is: “ ‘The state or Page 16 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 quality of being intricate or complex “or” that is difficult to understand.’ However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometimes, what appears to be complex on the face of it, may not be really so if one tries to understand it carefully.” (emphasis supplied) Thus, before dubbing the accounts to be complex or difficult to understand, there has to be a genuine and honest attempt on the part of the assessing officer to understand accounts maintained by the assessee; appreciate the entries made therein and in the event of any doubt, seek explanation from the assessee. But opinion required to be formed by the assessing officer for exercise of power under the said provision must be based on objective criteria and not on the basis of subjective satisfaction. 8. There is no gainsaying that recourse to the said provision cannot be had by the assessing officer merely to shift his responsibility of scrutinising the accounts of an assessee and pass on the buck to the special auditor. Similarly, the requirement of previous approval of the Chief Commissioner or the Commissioner in terms of the said provision being an inbuilt protection against any arbitrary or unjust exercise of power by the assessing officer, casts a very heavy duty on the said high-ranking authority to see to it that the requirement of the previous approval, envisaged in the section is not turned into an empty ritual. Needless to emphasise that before granting approval, the Chief Commissioner or the Commissioner, as the case may be, must have before him the material on the basis whereof an opinion in this behalf has been formed by the assessing officer. The approval must reflect the application of mind to the facts of the case.” 13. In Rajesh Kumar v. Commissioner of Income Tax, (2007) 2 SCC 181, the Supreme Court held thus: “11. We may at the outset notice that the following are the relevant factors for invoking Section 142(2-A) the Act: (i) the nature of accounts, (ii) complexity of accounts, and (iii) interest of the Revenue. 12. The formation of opinion of the assessing officer must be on the premise that while exercising his power regard must be had to the factors enumerated therein. The use of the word “and” shows that it is conjunctive and not disjunctive. All the aforementioned factors are conjunctively required to be read. The formation of opinion indisputably must be based on objective consideration. 13. The expression “complexity” would mean the state or quality of being intricate or complex or that it is difficult to understand. Difficulty in understanding would, however, not lead to the conclusion that the accounts are complex in nature. No order can be passed on whims or caprice.” 14. However, with effect from 1st June, 2013, the words “the nature and complexity of the accounts of the assessee and” came to be substituted by the words “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”. 15. While prior to its amendment, sub-section (2A) of section 142 of the Act could be invoked only upon Page 17 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 considering two factors, viz., the nature and complexity of the accounts of the assessee and the interests of the revenue, now the Assessing Officer can invoke the said sub- section if he is of the opinion that having regard to: (i) the nature and complexity of the accounts, (ii) volume of the accounts, (iii) doubts about the correctness of the accounts, (iv) multiplicity of transactions in the accounts or (v) specialised nature of business activity of the assessee, and the interests of the revenue, it is necessary so to do. 16. Thus, apart from the nature and complexity of the accounts, there are four other contingencies under which the Assessing Officer can invoke the provision. Out of these five contingencies, while four refer to accounts, the fifth is independent and refers only to specialised nature of business activity of the assessee. 17. At this juncture, it may be germane to refer to the explanatory notes to the provisions of the Finance Act, 2013 issued by the Central Board of Direct Taxes vide Circular No.03/2014 dated 24th January, 2013, which to the extent the same are relevant for the present purpose, read thus: “35. Direction for special audit under sub-section (2A) of section 142 35.1 Sub-section (2A) of section 142 of the Income-tax Act, before its amendment by the Act, inter-alia, provided that if at any stage of the proceedings, the Assessing Officer 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, he may, with the approval of the Chief Commissioner or Commissioner, direct the assessee to get his accounts audited by an accountant and to furnish a report of such audit in the prescribed form. The expression “nature and complexity of the accounts” has been interpreted in a very restrictive manner by various courts. 35.2 Sub-section (2A) of section 142 has been amended to provide that 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 specialized 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 Chief Commissioner or the Commissioner, direct the assessee to get his accounts audited by an accountant and to furnish a report of such audit in the prescribed form. 35.3 Applicability: – This amendment takes effect from 1st June, 2013.” 18. Thus, it is the restrictive interpretation of the expression “nature and complexity of the accounts” by various courts that has occasioned the amendment, evidently, therefore, the intention of the legislature was to widen the scope and ambit of sub-section (2A) of section 142 of the Act. The scope and ambit of sub-section (2A) of section 142 of the Act has, therefore, become wider upon its amendment with effect from 1 st June, 2013 and cannot be construed in the same restrictive manner as it was prior to its amendment. 19. As noted hereinabove, sub-section (2A) of section 142 of the Act can be invoked 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 Page 18 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 nature of business activity of the assessee. Thus, four contingencies in which section 142(2A) of the Act can be invoked, relate to accounts. 20. The question that then arises for consideration is what meaning has to be assigned to the expression “accounts”. The expression “account” has been defined in the Black’s Law Dictionary to mean thus: “A detailed statement of the mutual demands in the nature of debit and credit between parties, arising out of contracts or some fiduciary relation. A statement in writing, of debits and credits, or of receipts and payments, a list of items of debits and credits, with their respective dates. A statement of pecuniary transactions; a record or course of business dealings with parties; a list or statement of monetary transactions, payable, accounts receivable, etc. in most cases showing a balance or result of comparision between items of an opposite nature”. In P. Ramanatha Aiyar’s Law Lexicon, “account” has inter alia been defined to mean: (i) a statement of moneys received and paid with calculation and balance, (ii) a formal record of debts and credits relating to the person named or caption placed at the head of the ledger account, (iii) computation, and (iv) a statement of fact or occurrence. Thus, the expression “account” also takes within its ambit a statement of pecuniary transactions, a record or course of dealings with parties as well as computation. The expression “accounts”cannot be read to mean ‘books of account’ which are statutorily required to be maintained by certain classes of assessees, but has to be given a wider meaning. 21. It is the case of the petitioner that he does not maintain any personal books of account as he is statutorily not required to maintain the same. In effect and substance, therefore, the petitioner seeks to equate the expression “accounts” with “books or books of account” as contemplated under section 2(12A) of the Act. However, as rightly submitted by the learned counsel for the respondents, the expression used in the sub-section is “accounts” and not “books of account”, and had the legislature so intended, it would have employed the expression “books of account” instead of “accounts”. In CBI v. V.C. Shukla (supra), the Supreme Court though dealing with a case relating to section 34 of the Indian Evidence Act, had occasion to construe the scope and ambit of the expression “account”. The Court held thus: “20. Mr Sibal, the learned counsel for the Jains, did not dispute that the spiral notebooks and the small pads are “books” within the meaning of Section 34. He, however, strongly disputed the admissibility of those books in evidence under the aforesaid section on the ground that they were neither books of account nor were they regularly kept in the course of business. He submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr Sibal, in business parlance “account” means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not reflect any such relationship and, on the contrary, only contained entries of monies received from one set of persons and payment thereof to another set of persons it could not be said, by any stretch of imagination Page 19 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 that they were books of account, argued Mr Sibal. He next contended that even if it was assumed for argument’s sake that the above books were books of account relating to a business still they would not be admissible under Section 34 as they were not regularly kept. It was urged by him that the words “regularly kept” mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words “account” and “regularly kept”. 21. The word “account” has been defined in Words and Phrases, Permanent Edn., Vol. I-A at pp. 336 to 338 to mean (i) a claim or demand by one person against another creating a debtor-creditor relation; (ii) a formal statement in detail of transactions between two parties arising out of contracts or some fiduciary relation. At p. 343 of the same book the word has also been defined to mean the preparation of record or statement of transactions like; a statement and explanation of one’s administration or conduct in money affairs; a statement or record of financial transactions, a reckoning or computation; a registry of pecuniary transactions or a reckoning of money transactions; a written or printed statement of business dealing or debits and credits; or a certain class of them. It is thus seen that while the former definitions give the word “account” a restrictive meaning the latter give it a comprehensive meaning. Similarly is the above word defined, both restrictively and expansively, in Black’s Law Dictionary (Sixth Edn.) to mean: “A detailed statement of the mutual demands in the nature of debit and credit between parties, arising out of contracts or some fiduciary relation. A statement in writing, of debits and credits, or of receipts and payments; a list of items of debits and credits, with their respective dates. A statement of pecuniary transactions; a record or course of business dealings between parties; a list of statement of monetary transactions, such as payments, losses, sales, debits, credits, accounts payable, accounts receivable, etc., in most cases showing a balance or result of comparison between items of an opposite nature.” 22. Mr Altaf Ahmed relied upon the wider definition of the word “account” as mentioned above to contend that MR 71/91 fulfils the requirements of “account” as it records a statement of monetary transactions — such as receipts and payments — duly reckoned. Mr Sibal on the other hand urged that business accounts must necessarily mean only those accounts which record transactions between two parties, arising out of a contract or some fiduciary relations (a meaning accepted by the High Court). He submitted, relying upon the definition of “memorandum” as appearing in Words and Phrases, that MR 71/91 could at best be described as a memorandum of some transactions kept by a person for his own benefit to look into the same if and when the occasion would arise. 23. From the above definitions of “account” it is evident that if it has to be narrowly construed to mean a formal statement of transactions between two parties including debtor-creditor Page 20 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 relation and arising out of contract, or some fiduciary relations, undoubtedly the book MR 71/91, would not come within the purview of Section 34. Conversely, if the word “account” is to be given wider meaning to include a record of financial transactions properly reckoned the above book would attract the definition of “book of account”. 24. It cannot be gainsaid that the words “account”, “books of account”, “business” and “regularly kept” appearing in Section 34 are of general import. Necessarily, therefore, such words must receive a general construction unless there is something in the Act itself, such as the subject- matter with which the Act is dealing, or the context in which the words are used, to show the intention of the legislature that they must be given a restrictive meaning. Thus, if the word “account”is to be given a wider meaning, it would include a record of financial transactions and not merely a formal statement of transactions. 23. It has been oft repeated by the learned counsel for the petitioner that the petitioner being an individual, is not under any statutory obligation to maintain any books of account and has not been maintaining any books of account and that in the absence of any accounts, the question of complexity in the accounts does not arise and hence, it is not permissible for the Assessing Officer to invoke the said provision. It has also been contended that even if the amended provision talks of audit for specialised nature of business activities of assessee, the prerequisite condition of maintenance of books of account as per statutory requirement is a must. Besides, the petitioner has consistently taken a stand in the proceedings under section 153A of the Act and pursuant to the notice for referring the matter for special audit that he does not maintain books of account. However, a perusal of the statement of the petitioner as recorded under section 132(4) of the Act, a copy whereof has been annexed by the petitioner along with his affidavit-inrejoinder, shows that at item No.12, the following question has been posed to the petitioner: “Please state where do you Page 69 of 94 Downloaded on : Fri Nov 26 14:44:15 IST 2021 C/SCA/6632/2019 JUDGMENT maintain and keep your books of accounts?” In reply to which, the petitioner has stated “All the books of accounts are maintained in TALLY program as is available at my office at 304, Akanksha Building, Opp. Vadilal House, Navrangpura, Ahmedabad.” At item No.18, the question put to the petitioner is: “During the course of search action under section 132 of the I.T. Act, 1961, cash of Rs.7,14,700/- has been found from your residence. Please furnish whether the same has been reflected in your regular books of accounts?” In response thereto, the petitioner’s answer is: “I do acknowledge that during the course of search action under section 132 of the I.T. Act, 1961, cash of Rs.7,14,700/- has been found from my residence. In this regard, I want to state that this cash is duly reflected in my books of accounts and in fact as date i.e. on 29.11.2016 I am having a cash balance of Rs.2 crores less approx. Rs.40 to 50 lakhs deposited in bank. Therefore, the same is duly reflected in my books of account.” Thus, in his statement under section 132(4) of the Act, the petitioner has referred to his books of account; whereas subsequently, he has taken a stand that he does Page 21 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 not maintain books of account. 24. Be that as it may, assuming that the petitioner does not maintain books of account as he is statutorily not mandated to do so, does it mean that merely by dint of this reason, subsection (2A) of section 142 of the Act cannot be invoked in his case? In the opinion of this court, such an intention cannot be attributed to the legislature while enacting the amended subsection (2A) of section 142 of the Act. As noted hereinabove, the sub-section came to be amended because of the restrictive meaning assigned to it by the court. The legislature, therefore, obviously intended to give it a wider meaning 24. In the said case of Tehmul Burjor Shethna (supra) the voluminous documentary evidence had been seized from the premises of the petitioner running into more than 2 lakh pages which included the records of financial transactions which had been held to have fallen within the ambit of the expression of accounts, considering the nature of documentary evidences seized during the course of the search, the A.O since had found that income shown by the petitioner in return of income was not commensurating with the seized material, he had proceeded more particularly when there is no explanation to the material seized. The reference under Section 142(2A) was found justifiable even when the petitioner was not required to maintain the books of accounts statutorily. Relevant paras in this connection are reproduced as under: 28. Thus, though the petitioner may not maintain books of account as he is not statutorily required to do so, pursuant to the search, when the seized material indicating various financial transactions was put to him, and he was called upon to explain the same, he was required to explain the same to the satisfaction of the Assessing Officer. However, while the petitioner did offer some explanation, the same was not to the satisfaction of the Assessing Officer. In the absence of any satisfactory explanation coming forth, the Assessing Officer is required to consider the seized material and compute the income of the petitioner for the assessment years under consideration. Considering the nature of the documentary evidence which, in the opinion of the Page 22 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 Assessing Officer, reveals that the petitioner is involved in the business of accommodation entries and money laundering, there is multiplicity of transactions, and furthermore, such documentary evidence is voluminous and complex for him to decipher on his own, the Assessing Officer has thought it fit to resort to special audit under the provisions of section 142(2A) of the Act. In the opinion of this court, the material found during the course of search wherein various financial transactions have been recorded, which may have a bearing on the determination of income of the petitioner for the relevant assessment years, will be required to be examined for the purpose of computation of the correct income of the petitioner. 29. While it is true that the petitioner being an individual may not be required to maintain accounts statutorily, but that does not mean that he is not required to give a correct account of his income in his return of income. If the computation of his income as shown in his return of income is not commensurate with his real income or the evidence collected by the authorities during the course of the search, he is required to give a proper account of the same. When the voluminous documents seized during the course of search show that various financial transactions recorded in the seized material do not form part of the computation of income as reflected in the return of income, it means that the income is not properly accounted for and the petitioner can be called upon to state the correct accounts. Merely not maintaining accounts, or there not being any statutory obligation to maintain accounts, does not mean that the petitioner is discharged from the obligation of showing the correct accounts of the financial transactions carried out by him in the assessment years under consideration. The contention that because the petitioner is not required to maintain books of account the Assessing Officer cannot direct him under sub-section (2A) of section 142 of the Act to get the accounts audited by an accountant as defined in the Explanation below sub-section (2) of section 288, therefore, does not merit acceptance. 30. Besides, as pointed out by the learned counsel for the revenue, reference to special audit can also be made having regard to the specialised nature of the business activity of the assessee. In this case, the Assessing Officer is of the opinion that the petitioner is involved in the business of providing accommodation entries and money laundering. While such business may not be legal, even then it is a specialised business activity and the Assessing Officer may not have the wherewithal to decipher the documentary evidence. Under the circumstances, when the Assessing Officer finds that having regard to the specialised nature of business activities of the assessee, the accounts are required to be audited by an accountant as contemplated under sub- section (2A) of section 142 of the Act, it is permissible for the Assessing Officer to do so. Therefore, even if for the Page 23 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 sake of argument the petitioner’s contention that as he is not required to maintain accounts statutorily the question of complexity and volume of accounts would not arise were to be accepted, even then the petition would fail on the count that a direction to get the accounts audited by an accountant can also be given if the Assessing Officer having regard to the specialised nature of business of the petitioner is of the opinion that it is necessary to do so. 25. The issue, hence, is no longer res integra. Without giving any separate reasons it is being held that this ground of the petitioner that absence of statutory mandate of maintenance of books of accounts yields immunity from reference to the Special Auditor is not maintainable. Even when the petitioner is not required to statutorily maintain the books of accounts that by itself would not furnish the ground for the A.O not to refer the matter to the special audit and, therefore, such challenge to the jurisdiction of the A.O merits sustenance. 26. Even in the instant case, so far as the merit of the matter is concerned, it is quite apparent from the materials which has been already been placed and from the record that a search action was conducted on 19.12.2019 in the ‘Dishman Group’ of Companies and consequent to search action the assessment proceedings under Section 153(A) of the Act had been initiated. On verification of the records and co-relation of the records as can be noticed from the show cause notice which has been issued the various informations had come to the Court warranting independent audit within the meaning of Section 142 (2A). The notice indicated that the seized material had revealed that the assessee’s books of accounts were complex in nature and not true. The Page 24 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 plethora of documents found, and seized during the search action included the noting in the note books, loose sheet, notarised documents which involved huge sum of money running into thousands of crores of rupees in large amount of cash transaction and therefore, for Court deciding the correct taxable income in real fund loom, the A.O proposed exercise of carrying out the independent audit within a meaning of Section 142 (2) (A). The hearing for the said purpose had been scheduled while issuing the notice on 19.3.2021 and on 24.3.2021. 27. As could be noticed from the reply which is being tendered by the petitioner on 23.3.2021, it is the stand that her accounts cannot be said to be complex in nature. All transactions and dealings made by Mr. Bharat Padia and Chirag Thakkar, they are answerable for explanation and clarification. The case of the assessee is not complex and she will be able to explain all the issues raised in the course of assessment proceedings. She objected to the proposed reference under Section 142 (2A) and sought for the opportunity of being heard. She also had sought for the time on account of her son not being in the country. 28. It is to be noted that the satisfaction drawn to refer the case were independent audit under Section 142(2A) on 19.3.2021. She had also been furnished by the show cause notice issued on 19.3.2021 by the respondent. As could be noted by the satisfaction note drawn by the Page 25 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 concerned officer, he has narrated unaccounted transactions in the hands of Dishman Group realised in the course of search proceedings and co-search proceedings. The detections were made on the basis these materials and the key persons of the group. According to him, when had confronted with the summary of such detections duly reflecting the incriminating materials relied on. He had also summarised the total unaccounted transaction and the alleged bogus transactions pertaining to the Dishman Infrastructure Ltd. Vs Assistant Commissioner of Income Tax, Cetrnal Circle (2) (2021) 129 taxmann.com 344. Para 4.1 is read as under: “ The petitioner is a limited company of which most its shareholders are citizens of India. The petitioner is in the business of development of Special Economic Zone (SEZ) at village Bhamsara, Kalyanghadh, and Ghangad, Near Bagodara. On 19.12.2019 and on subsequent dates, a search/seizure and survey actions were conducted in “Dishman Group” and voluminous data/materials/documents were seized from the various premises, including the residential premises of the petitioner. Consequent to the search action, the proceedings under Section 153 A of the Act have been initiated in case of the petitioner -assessee. Actutated by the statement of Mr. Bharat Padia, Executive Director and Mr. Chirag Thakkar key man of Dishman Group and noticing the multiplicity of accounts which included the total of 42 premises including 24 lockers covered under Section 132 and six premises covered under the 133(A) a huge cache of incriminating documents in the form of papers, digital data were found Page 26 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 which were running into thousand of pages and the digital data is also voluminous in nature which have been described by way of a chart at para 5. We could notice that the reference of the petitioner Devbhuti Janmejay Vyas is at B6 along with the names of her husband and children. The various annexures have been shown at B6 with details of page numbers and data in hard disk. We also need to make a note of the fact from the satisfaction note that under the heading of “doubt about the correctness of the accounts”, there is a reference of loose papers file found and seized and which is being inventorised referred to at page 56 and reproduced along with this which related to the sale consideration received in cash by the assessee against the sale of land bearing block no. 408 and 409. The relevant excerpt also has been attached which means the present petitioner and the amount given to her referring her as D. G Vyas madam. There is a further detail at para 6.2 the names of the family members, which included the name of the present petitioner for village Ambli and survey no. T.P 52 FP 31 B 39 admeasuring 4,493 sq. meters. She has been referred to at the very page for land admeasuring 18009 sq.mts at Mangrol along with both her children. Another survey no 2014 admeasuring 17,199 sq. mts also has a reference, likewise there are couple of other references of hers in relation to the other lands along with her children and husband. It also reflects that despite having foreign accounts the same have not been disclosed and the reference is given to the assets and the reference is given of the Barclays bank U.K and HSBC Bank U.K. Page 27 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 The complexity of the accounts under the heading of” the complexity of account”, it proves that the seized material and the instances narrated make it difficult to segregate and identify the correct entity of the ‘Dishman Group’ to which the transaction actually pertain to, more particularly showing the dismay, the assessee was not making any compliance in the assessment proceedings. 29. Noticing from the nature of satisfaction arrived at by the concerned officer and also further revelation of the material seized from the premises of company and the residential premises during the search proceedings, it would not be feasible for the Court to accept the contention raised by the petitioner that in the instant case she is not required to maintain her accounts. The seized material cannot furnish the ground for the officer concerned to invoke powers under Section 142 (2A) so far as she is concerned. It will not be feasible also to accept the contention that her reference being limited at B6, the material is not so complex for A.O to comprehend and decipher the same necessitating the reference to the special audit, as we are in complete agreement with the learned Senior Advocate Mr Bhatt that here is a case where segregation and identification in relation to the individual would be difficult at this stage. It is, therefore, not feasible for the Court to hold that instead of merely making the additions on the basis of the seized material, the officer concerned has wrongly made a reference to the Special Auditor by terming unnecessarily the same as the multiplicity of the transactions. The Court also needs to particularly Page 28 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 make a reference that the specialised nature of the business activities of the asessee can also be the reason for the special audit to be directed. Here, what would be noticed is that there are serious allegations against the company and the multiplicity of transactions and the voluminous data both of physical as well as virtual, seized during the operation of the search and seizure has led the AO to take recourse to the special audit under the provisions of Section 142 (2A). Even in case of the present petitioner, whose name is quite apparent at various materials and not only at B6, this possibly can have a bearing on the income of the petitioner for the relevant A.Y and therefore, it would be required to be examined for the purpose of computation of the correct income of the assessee, and the officer concerned on being satisfied after availing due opportunity of hearing to the otherside when has chosen not to sustain the objections against the show cause notice and making a reference to the special audit. 30. In the opinion of this Court, no interference is desirable. We are also supported by the decision of this Court in case of Dishman Infrastructure Ltd. Vs Assistant Commissioner of Income Tax, Central Circle (2) when the Court examined in detail the applicability of the provisions of Section 142(2A) as amended w.e.f 1.6.2013 as also the various other aspects which apply mutatis mutandis in the judgment case. Some of the findings and observations require to be reproduced by holding emphatically that averments let out either of jurisdiction as on merits are not sustainable Page 29 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 under the law. 19. As noted hereinabove, sub-section (2A) of section 142 of the Act can be invoked 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. Thus, four contingencies in which section 142(2A) of the Act can be invoked, relate to accounts. 20. The question that then arises for consideration is what meaning has to be assigned to the expression “accounts”. The expression “account” has been defined in the Black’s Law Dictionary to mean thus: “A detailed statement of the mutual demands in the nature of debit and credit between parties, arising out of contracts or some fiduciary relation. A statement in writing, of debits and credits, or of receipts and payments, a list of items of debits and credits, with their respective dates. A statement of pecuniary transactions; a record or course of business dealings with parties; a list or statement of monetary transactions, payable, accounts receivable, etc. in most cases showing balance or result of comparison between items of an opposite nature”. In P. Ramanatha Aiyar’s Law Lexicon, “account” has inter alia been defined to mean: (i) a statement of moneys received and paid with calculation and balance, (ii) a formal record of debts and credits relating to the person named or caption placed at the head of the ledger account, (iii) computation, and (iv) a statement of fact or occurrence. Thus, the expression “account” also takes within its ambit a statement of pecuniary transactions, a record or course of dealings with parties as well as computation. The expression “accounts”cannot be read to mean ‘books of account’ which are statutorily required to be maintained by certain classes of assessees, but has to be given a wider meaning. 21. It is the case of the petitioner that he does not maintain any personal books of account as he is statutorily not required to maintain the same. In effect and substance, therefore, the petitioner seeks to equate the expression “accounts” with “books or books of account” as contemplated under section 2(12A) of the Act. However, as rightly submitted by the learned counsel for the respondents, the expression used in the subsection is “accounts” and not “books of account”, and had the legislature so intended, it would have employed the expression “books of account” instead of “accounts”. 22. In CBI v. V.C. Shukla (supra), the Supreme Court though dealing with a case relating to section 34 of the Indian Evidence Act, had occasion to construe the scope and ambit of the expression “account”. The Court held thus: “20. Mr Sibal, the learned counsel for the Jains, did not dispute that the spiral notebooks and the small pads are “books” within the meaning of Section 34. He, however, strongly disputed the admissibility of those books in evidence under the aforesaid section on the ground that they were neither books of account nor were they Page 30 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 regularly kept in the course of business. He submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr Sibal, in business parlance “account” means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not30 reflect any such relationship and, on the contrary, only contained entries of monies received from one set of persons and payment thereof to another set of persons it could not be said, by any stretch of imagination that they were books of account, argued Mr Sibal. He next contended that even if it was assumed for argument’s sake that the above books were books of account relating to a business still they would not be admissible under Section 34 as they were not regularly kept. It was urged by him that the words “regularly kept” mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words “account” and “regularly kept”. 21. The word “account” has been defined in Words and Phrases, Permanent Edn., Vol. I- A at pp. 336 to 338 to mean (i) a claim or demand by one person against another creating a debtor-creditor relation; (ii) a formal statement in detail of transactions between two parties arising out of contracts or some fiduciary relation. At p. 343 of the same book the word has also been defined to mean the preparation of record or statement of transactions or the like; a statement and explanation of one’s administration or conduct in money affairs; a statement or record of financial transactions, a reckoning or computation; a registry of pecuniary transactions or a reckoning of money transactions; a written or printed statement of business dealing or debits and credits; or a certain class of them. It is thus seen that while the former definitions give the word “account” a restrictive meaning the latter give it a comprehensive meaning. Similarly is the above word defined, both restrictively and expansively, in Black’s Law Dictionary (Sixth Edn.) to mean: “A detailed statement of the mutual demands in the nature of debit and credit between parties, arising out of contracts or some fiduciary relation. A statement in writing, of debits and credits, or of receipts and payments; a list of items of debits and credits, with their respective dates. A statement of pecuniary transactions; a record or course of business dealings between parties; a list of statement of monetary transactions, such as payments, losses, sales, debits, credits, accounts payable, accounts receivable, etc., in most cases showing a balance or result of comparison between items of an opposite nature.” 22. Mr Altaf Ahmed relied upon the wider definition of the word “account” as mentioned above to contend that MR 71/91 fulfils the requirements of “account” as it records a statement of monetary transactions — such as receipts and payments — duly reckoned. Mr Sibal on the other hand urged that business accounts must necessarily mean only those accounts which record transactions between two parties, arising out of a Page 31 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 contract or some fiduciary relations (a meaning accepted by the High Court). He submitted, relying upon the definition of “memorandum” as appearing in Words and Phrases, that MR 71/91 could at best be described as a memorandum of some transactions kept by a person for his own benefit to look into the same if and when the occasion would arise. From the above definitions of “account” it is evident that if it has to be narrowly construed to mean a formal statement of transactions between two parties including debtor-creditor relation and arising out of contract, or some fiduciary relations, undoubtedly the book MR 71/91, would not come within the purview of Section 34. Conversely, if the word “account” is to be given wider meaning to include a record of financial transactions properly reckoned the above book would attract the definition of “book of account”.24. It cannot be gainsaid that the words “account”, “books of account”, “business” and “regularly kept” appearing in Section 34 are of general import. Necessarily, therefore, such words must receive a general construction unless there is something in the Act itself, such as the subject-matter with which the Act is dealing, or the context in which the words are used, to show the intention of the legislature that they must be given a restrictive meaning. Thus, if the word “account”is to be given a wider meaning, it would include a record of financial transactions and not merely a formal statement of transactions. 23. It has been oft repeated by the learned counsel for the petitioner that the petitioner being an individual, is not under any statutory obligation to maintain any books of account and has not been maintaining any books of account and that in the absence of any accounts, the question of complexity in the accounts does not arise and hence, it is not permissible for the Assessing Officer to invoke the said provision. It has also been contended that even if the amended provision talks of audit for specialised nature of business activities of assessee, the prerequisite condition of maintenance of books of account as per statutory requirement is a must. Besides, the petitioner has consistently taken a stand in the proceedings under section 153A of the Act and pursuant to the notice for referring the matter for special audit that he does not maintain books of account. However, a perusal of the statement of the petitioner as recorded under section 132(4) of the Act, a copy whereof has been annexed by the petitioner along with his affidavit- inrejoinder, shows that at item No.12, the following question has been posed to the petitioner: “Please state where do you maintain and keep your books of accounts?” In reply to which, the petitioner has stated “All the books of accounts are maintained in TALLY program as is available at my office at 304, Akanksha Building, Opp. Vadilal House, Navrangpura, Ahmedabad.” At item No.18, the question put to the petitioner is: “During the course of search action under section 132 of the I.T. Act, 1961, cash of Rs.7,14,700/- has been found from your residence. Please furnish whether the same has been reflected in your regular books of accounts?” In response thereto, the petitioner’s answer is: “I do acknowledge that during the course of search action under section 132 of the I.T. Act, 1961, cash of Rs.7,14,700/- has been found from my residence. In this Page 32 of 33 C/SCA/8544/2021 ORDER DATED: 23/11/2021 regard, I want to state that this cash is duly reflected in my books of accounts and in fact as date i.e. on 29.11.2016 I am having a cash balance of Rs.2 crores less approx. Rs.40 to 50 lakhs deposited in bank. Therefore, the same is duly reflected in my books of account.” Thus, in his statement under section 132(4) of the Act, the petitioner has referred to his books of account; whereas subsequently, he has taken a stand that he does not maintain books of account. 24. Be that as it may, assuming that the petitioner does not maintain books of account as he is statutorily not mandated to do so, does it mean that merely by dint of this reason, subsection (2A) of section 142 of the Act cannot be invoked in his case? In the opinion of this court, such an intention cannot be attributed to the legislature while enacting the amended subsection (2A) of section 142 of the Act. As noted hereinabove, the sub-section came to be amended because of the restrictive meaning assigned to it by the court. The legislature, therefore, obviously intended to give it a wider meaning. 25 to 29 xxx 31. Resultantly, in light of the discussions and for the reasons stated above, this petition fails and is dismissed accordingly. Needless to say that the petitioner shall co- operate in the inquiry proceedings conducted by the Special Auditor. The time period of submitting the report stands extended. No order as to costs. (SONIA GOKANI, J) (NISHA M. THAKORE,J) MARY VADAKKAN Page 33 of 33 "