KALYAN JYOTI SENGUPTA J.

(1) BY the instant writ application the petitioner has basically challenged an order dated June 13, 2003, passed by the Commissioner of Income-tax, Calcutta-700 021, appointing Shri P. K. Agarwala as a special auditor under Section 142 (2a) of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"), and also incidentally the vires of Section 142 (2a) of the said Act in so far as it covers the same field as Section 44ab of the said Act as regards its constitutionality. However, at the time of arguments the question of vires was not pressed by learned senior counsel Dr. Pal. The direction for filing of affidavits was given on two occasions, to understand the case of the Revenue, however, no affidavit was filed, so it was decided the matter should be heard without any affidavit-in-opposition.

(2) THE short facts of the case are that the petitioner is carrying on banking business after having been formed under the Co-operative Societies Act, 1912. The members and/or shareholders of the petitioner are the Government of West Bengal, holding about 38 per cent. shares and balance are being held by the different District Central Co-operative Banks and other co-operative societies. The petitioner is also a scheduled bank within the relevant provisions of the Banking Regulation Act and is being directly controlled by Reserve Bank of India and also by National Bank for Agriculture and Rural Development (NABARD). The books of account and documents of the petitioner are regularly and systematically audited by both the Co-operative Audit Directorate, Government of West Bengal, as well as by the auditor under Section 44ab of the said Act.

(3) IN almost all the relevant assessment years the petitioner has been enjoying exemption from paying tax on the income under the provision of Section 14 (3) (i) (a) of the Indian Income-tax Act, 1922, then prevailing, now under Section 81 (1) (a) of the present Act. When the petitioner was reasonably expecting refund of a sum of Rs. 1,40,27,398, Rs. 1,45,31,755, Rs. 92,26,412, Rs. 1,01,94,817 and Rs. 1,59,24,661, respectively, for the assessment years 1996-97 to 2000-01, which were duly and appropriately adjudged to be refunded, by the appropriate income-tax official, the Assessing Officer all of a sudden decided to reopen the aforesaid assessments for the relevant periods. The petitioners duly replied to the notices under Section 148 of the aforesaid Act and met queries and requisitions made by him in connection with the re-opening of assessment under Section 147 of the said Act.

(4) WHILE the petitioners were exchanging correspondence, meeting queries and supplying information, they received a copy of the letter dated May 29, 2003, addressed by the Income-tax Officer, Technical-21, for respondent No. 3 to M/s. P. K. Agarwala wherefrom it transpired that respondent No. 3 wanted special audit to be done under Section 142 (2a) of the said Act of the accounts of the petitioner for the assessment years 1996-97 to 2002-2003 and for the said purpose M/s. P. K. Agarwala had been nominated as chartered accountant for conducting audit. The petitioner duly protested against the aforesaid proposal for special audit contending amongst others that it was not necessary in this case as the accounts of the petitioner have been audited not only under Section 44ab of the said Act but also by the other agencies.

(5) ON June 13, 2003, respondent No. 3 passed an order approving the proposal of the Assessing Officer for special audit under the aforesaid section for the aforesaid assessment years. The said order, however, was passed considering the petitioners objection filed on June 4, 2003. No affidavit-in-opposition was filed but I directed production of the relevant records, so I had the benefit of going through the same.

(6) DR. Pal, senior advocate, appearing for the petitioner, contends that the impugned order of the Commissioner is bad in law for two broad reasons, No. (i) the Commissioner in fact under the law has no material to approve the proposal of the Assessing Officer for appointment of the special auditor, No. (ii) the said impugned order is passed on non-compliance with the principles of natural justice. He submits that the power under Section 142 (2a) of the said Act cannot be exercised by the Assessing Officer without the conditions as mentioned hereunder being satisfied : firstly, he must form an opinion having regard to the nature and complexity of the accounts of the assessee and, secondly, in the interest of the Revenue that it is necessary to appoint a special auditor, thereafter he must have a previous approval of the Chief Commissioner/commissioner of Income-tax.

(7) BEFORE he comes to the conclusion, as to the nature and complexity of the accounts, he shall make a genuine and honest attempt to understand the accounts of the assessee and appreciate the entries therein and in case of doubt, he should seek explanation from the assessee or his representative. A cursory look at the books of account is not sufficient for formation of opinion by the Assessing Officer for exercise of power under Section 142 (2a) of the said Act. His opinion must be based upon objective considerations and not on the basis of subjective satisfaction. Naturally the Assessing Officer must have occasion and opportunity to examine the accounts of the assessee to form his opinion as above. In support of his submission, he has relied on the following decisions : peerless General Finance and Investment Co. Ltd. v. Deputy CIT [1999] 236 ITR 671 (Cal); bata India Ltd. v. CIT; muthoottu Mini Kuries v. Deputy CIT; h. P. State Forest Corporation Ltd. v. Joint CIT; and swadeshi Cotton Mills Co. Ltd. v. CIT.

(8) HE contends that in the petition it has been stated that neither the Assessing Officer nor the Commissioner of Income-tax had any occasion to examine any books of account rather they have relied on the records namely the order of assessment, returns, profit and loss account and balance-sheet. This fact has not been rebutted by filing any affidavit. Therefore, the statements and averments made in the petition are to be accepted as being true and correct. In support of his contention he has referred to the following decisions : controller of Court of Ward v. G. N. Ghorpade,; jeewanlal (1929) Ltd. v. ITO, and metal Distributors Ltd. v. ITO.

(9) HIS further contention is that the aforesaid impugned order is mala fide for the following reasons : on December 16, 2002, an order was passed under Section 154 of the said Act. A sum of Rs. 1,45,29,451 was directed to be refunded to the petitioner for the assessment year 1997-98. In pursuance thereof while the petitioner was making a representation for refund of a total sum of Rs. 6,39,05,043 for the assessment years 1996 to 2001, the notices under Section 148 had been issued in order to stall the claim of the petitioner. Any way, all the queries for reopening of the assessment for the aforesaid periods were answered in writing. The hearing of the case was fixed on April 28, 2003, with regard to reopening and at that time too nothing was divulged and subsequently from the order of the Commissioner dated June 13, 2003, it was found that the Commissioner had received a proposal from the Assessing Officer dated March 28, 2003, for the appointment of a special auditor for all the assessment years 1996-97 to 2001. Significantly, no hearing was given, before making the proposal, nothing was divulged. Therefore, at no point of time did the petitioner have any opportunity to place its case against the proposal of the Assessing Officer for appointment of a special auditor. The Commissioner mechanically approved the proposal of the Assessing Officer without giving any opportunity of being heard and only a notice was served upon the petitioner for settling the remuneration of the special auditor and not on the question of the appointment.

(10) HE contends that discarding, without reasons, the audit reports both under the co-operative law and the aforesaid provision of Section 44ab of the said Act the decision for appointment of special auditor has been taken ignoring enormous cost factor of the petitioner in a casual manner. Therefore, on that score also the aforesaid impugned order is invalid.

(11) MR. S. K. Kapoor, learned Additional Solicitor General of India, while opposing the writ petition submits that in this case there is no challenge against the power of the Assessing Officer as well as the Commissioner. When both the officers after having applied their respective minds and being satisfied with the nature and complexity of the accounts based on objective considerations have taken a decision for special audit, it is not open for the petitioner to challenge the same nor will the writ court interfere with the same. He submits that from the records it will appear that both the officials have examined the profit and loss account, balance-sheet and the returns submitted and thereupon they formed their opinion. Therefore, it cannot be said that the opinion has been formed without any material. Sufficiency or inadequacy of the materials cannot be a ground to interfere with the impugned order. It is not necessary that all the books of account are to be examined by the officials for formation of opinion as required under Section 142 (2a) of the said Act. He has drawn my attention to the impugned order of the Commissioner and contends that he has given detailed reasons and disclosed the materials on the basis of which he recorded his satisfaction while giving approval.

(12) HE submits that it is impossible to examine each and every book of account of all the branches of the writ petitioner, which are scatterred in almost all the districts of the State of West Bengal. This writ petitioner has been transacting with various non-members and the incomes therefrom cannot be income from co-operative business, so as to claim deduction under the law. It will appear from the contents of letters and correspondence exchanged by and between the parties that the nature and complexity of the accounts are so apparent that the appointment of a special auditor can hardly be avoided. His next contention is that there is no provision for compliance with natural justice for giving prior hearing to the petitioner by the Assessing Officer or by the Commissioner with regard to the appointment of the special auditor, because the decision of this nature does not affect anybodys right and if there be any objection at the time of hearing before the Assessing Officer, all points may be agitated.

(13) HE further contends that the petitioner while answering to the queries of the Assessing Officer took time on two occasions for production of the necessary documents and accounts, this fact itself suggests the complexity and nature of the accounts. In support of his contention he has relied on the following decisions. Swadeshi Cotton Mills Co. Ltd. v. CIT; indo Asahi Glass Co. v. ITO; abhay Kumar and Co. v. Union of India; joint CIT v. I. T. C. Ltd. ; pani Devi v. Union of India; living Media Ltd. v. CIT; gurunanak Enterprises v. CIT; m. P. Co-operative Bank Ltd. v. Addl. CIT; and cit v. Karnataka State Co-operative Apex Bank [2001] 251 ITR 194 (SC).

(14) HAVING considered the respective contentions and submission of learned counsel it appears to me that the only point that needs to be decided before I hold the aforesaid impugned order of approval followed by direction for special audit under Section 142 (2a) of the said Act being bad in law is whether the Commissioner of Income-tax as well as the Assessing Officer have exercised their jurisdiction as per the mandate of the aforesaid section or not. The said section is quoted hereunder :

"142. (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. "

(15) A large number of decisions cited by learned counsel have laid down almost uniformly with little addition and variation that before the said authorities could pass an order for special audit they are to apply their minds and to form their opinion having recorded satisfaction with an objective consideration, that the accounts of the assessee are of such nature and complexity and for the interest of the Revenue that without such special audit assessment or reassessment is not possible.

(16) THEREFORE, I feel some of the few decisions having a bearing on the point cited at the Bar are required to be considered.

(17) IN the case of Swadeshi Cotton Mills Co. Ltd. v. CIT, the Division Bench of the Allahabad High Court while dismissing a writ application challenging the order of special audit under the aforesaid section has observed that the power under Section 142 (2a) cannot be based on objective basis, regard being had to the nature of the accounts. It has further been observed that the word "complex" used in Sub-section (2a) of Section 142 is a nebulous word :

"however, all that are difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon ones 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. Therefore, special audit should not be directed on cursory look at the accounts. There should be an honest attempt to understand the accounts of the assessee. "

(18) IN the case of Peerless General Finance and Investment Co. Ltd. v. Deputy CIT [1999] 236 ITR 671, the learned single judge of this court while examining the scope and purport of Section 142 (2a) of the said Act has been pleased to hold that (headnote) :

"section 142 (2a) of the Income-tax Act, 1961, enables the assessing authority to direct the accounts to be audited in the event of complexity of the accounts. This power can be exercised in respect of all assessees. A bare perusal of Sub-section (2a) of Section 142 leaves no manner of doubt that an opinion has to be formed having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue. The word and signifies conjunction. Thus both nature and complexity of the accounts as also the interests of the Revenue are necessary ingredients for exercise of the said power. The word complexity means the state or quality of being intricate or complex or that it is difficult to understand. The expression having regard to indicates that in exercising the power, regard must be had to the factors enumerated in the provision. Where an authority is conferred with a power to exercise its discretion in a particular manner, such discretion has to be exercised bona fide and with a view to achieve the object laid down under the statute. No discretion is beyond the scope of judicial review. Principles of natural justice shall be presumed to be necessary unless there exists a statutory interdict. A prior approval is not an empty ritual. Before an approval is sought for, the Assessing Officer must form an opinion as regards the conditions laid down therein. It further envisages application of mind on the part of the Assessing Officer as also the Commissioner or Chief Commissioner as the case may be. "

(19) IN the case of Muthoottu Mini Kuries v. Deputy CIT, the learned single judge of the Kerala High Court relying on the aforesaid decisions of the Allahabad High Court and the Calcutta High Court has observed that (headnote) :

"when the statute prescribes an audit by a third party it requires that the Assessing Officer should have a satisfaction that the accounts of the assessee are complex in nature. This decision can be made only after seeing the accounts. Under Section 142 of the Income-tax Act, 1961, which provides for enquiry before assessment, the Assessing Officer is obliged to serve a notice on the assessee to produce or cause to be produced such accounts or documents as the Assessing Officer may require and of furnishing in the prescribed manner information in such form and on such points or matters as the Assessing Officer requires. This sufficiently clarifies that a hearing is essential, at the pre-assessment stage. Only if the records are produced and the accounts examined, the complexity or otherwise of the accounts would become apparent, and not before. Even if there are difficulties in appreciating the entries in every case, it is not healthy to refer the matter to a chartered accountant as an explanation could be obtained from the assessee or from his authorised representative under Section 142 (1). The expressions used in Section 142 (2a) show that there should be sufficient reasons and this itself postulates a right of hearing. "

(20) IN the case of Bata India Ltd. v. CIT [2002] 257 ITR 622 [LQ/CalHC/2002/509] the learned single judge of this court while relying on the aforesaid three decisions has held on almost similar lines that (headnote) :

"the twin pre-conditions justifying the special audit under Section 142 (2a) of the Income-tax Act, 1961, are the nature and complexity of the accounts and the interests of the Revenue. Before an approval is sought for, the assessing authority must form an opinion as regards the said twin conditions. There should be an honest attempt to understand the books of account of the assessee. There has to be an application of mind on the part of the assessing authority. Complexity of the accounts cannot be equated with doubts being entertained by the assessing authority either with regard to the correctness thereof or the need for obtaining certain vital information not ascertainable from the accounts. The satisfaction is to be based upon objective considerations. "

(21) IN the case of Joint CIT v. I. T. C. Ltd. [1999] 239 ITR 921, the Division Bench of this court while dealing with an appeal from an interlocutory order has been pleased to observe that (headnote) :

"in cases where the nature and complexity of accounts is such that it is not possible for the Assessing Officer to justify the correct assessment of the income and to examine the correctness of the accounts the Assessing Officer has power to appoint a special auditor with the approval of the Commissioner or Chief Commissioner. The power conferred on the Assessing Officer and the approval of the Commissioner and Chief Commissioner is not confined to any turnover, in business or profession. There is no limit or any bar on account of amount of receipts either in business or profession. This power has been conferred on the Assessing Officer to do justice to the assessee and also to protect the interest of the Revenue. "

(22) FROM an analysis of the aforesaid decisions, which are relevant on this point and upon careful reading of the aforesaid section it is clear as it has been rightly contended by Dr. Pal that unless the Assessing Officer examines the books of account, he cannot have any understanding as to the nature and complexity of the same, consequently is not possible for him to come the conclusion for necessity of special audit. It is difficult to accept the argument of Mr. Kapoor, learned Additional Solicitor General of India, that all the books of account are not required to be examined by the Assessing Officer or the Commissioner physically, if other materials, namely, the returns together with the balance-sheet and profit and loss accounts are good enough to reach the conclusion as to the complexity and the nature of the accounts, then, this will be sufficient compliance with requirements of the aforesaid section. Having examined the records, I find that in the order sheet there is no whisper of the Assessing Officer about the formation, of his opinion nor any direction for production of the books of account being given. The scheme of Section 142 of the said Act is very clear and I think it is the obligation of the Assessing Officer to give a direction for production of the accounts, wherever it is necessary. Here, the Assessing Officer has to form an opinion as regards the complexity of nature in relation to the accounts. He ought to have taken such measure for examining the books of account as of necessity.

(23) IT is stated in the petition that the books of account were never asked to be produced and this averment and statement have not been denied and disputed. Even from the impugned order as well as the proposal of the Assessing Officer I do not find any attempt was made for causing production of the books of account, not to speak of examining the same.

(24) THE Additional Solicitor General submits that the examination of all the books of account for formation of opinion is not necessary and I think this submission has no force, as from the language of the said section, it appears that formation of opinion has to be related to the books of account. Therefore, how is it possible for a person to form an opinion in any manner without the same being examined Moreover, this issue is no longer res integra, as the same contention and plea have already been decided by the aforesaid decisions of several courts as quoted above. So I reject this contention.

(25) THEREFORE, I conclude that the Assessing Officer without examining the books of account has formed their opinion regarding the nature and complexity and the Commissioner overlooking this serious legal lapse has mechanically approved. It is true they have material, but with these materials no one can reasonably and rationally form an opinion. I have examined the proposal dated March 28, 2003, of the Assessing Officer, namely, the Assistant Commissioner of Income-tax. It appears that he sought for various information to complete assessment correctly and such information could not be supplied by the petitioner, as the accounts are not maintained in such fashion. Moreover, the business transactions of the petitioner are huge and conducted through 48 branches in West Bengal. Because of this failure he has presumed the accounts of the assessee (petitioner) are very complex and the desired information cannot be collected easily.

(26) IN his proposal he has not stated how the interest of the Revenue will be subserved with such special audit. The Commissioner of Income-tax has recorded his approval mechanically as quoted above to cover up the aforesaid lapses. He recorded that he has applied his mind and he regarded that the nature of the accounts and its complexity thereof are such that the proper assessment cannot be made unless special audit is directed to be conducted for the interest of the Revenue. His findings appear to be independent of the decision of the Assessing Officer, he cannot do so, his jurisdiction is to examine whether the proposal of the Assessing Officer for special audit deserved to be approved.

(27) IN my view inference and/or presumption cannot be the basis for formation of an opinion, as this cannot take the place of factual examination of the accounts. In the decisions of Peerless case [1999] 236 ITR 671 (Cal), Swadeshi Cotton Mills case and the Madras High Courts case it has consistently been held that inference cannot be a basis for formation of opinion or satisfaction. It is clear from the aforesaid two orders and from the records that there was no objective consideration for reaching satisfaction as required for assumption of jurisdiction under Section 142, Sub-section (2a) of the said Act.

(28) IT appears to me further that primarily the Assessing Officer should examine either by himself or to get the accounts examined by some other official subordinate to him and then apply his mind to form opinion about the nature and complexity of the accounts. The said section leaves ample scope for the Assessing Officer to abuse or misuse power conferred thereunder by appointing a special auditor, to be more precise the task of the Assessing Officer of examining accounts can be shifted to the third party at the cost of the assessee. In this case this has happened undoubtedly, for the Assessing Officer never tried to examine the books of account before forming his opinion. Voluminous and the numbers of books of account or the plea of impossibility are no ground to abdicate his duty. If it is possible for an auditor or his team to examine the books of account, then why is it impossible for an Assessing Officer, is not comprehensible, after all he is presumed to have workable skill and idea of accounting because the nature of the duty entrusted to him under the statute reasonably demands such skill and knowledge of examining accounts.

(29) I quite understand the whole object of the reassessment, is to find out whether any taxable income has escaped assessment or rather in the guise of co-operative income any other income has slipped out from the assessment or not. The petitioner is a body corporate, and formed under the statute and they are required to audit their accounts compulsorily under Section 44ab of the said Act which has been incorporated in the on and from April 1, 1985, by the Finance Act, 1984, whereas Section 142 (2a), (2b) was incorporated much earlier than the aforesaid section with effect from April 1, 1976, by the Taxation laws (Amendment) Act, 1975. The difference between the aforesaid two sections is distinctly discernable. The provisions of Section 44ab of the said Act are applicable in the case of the classified assessee as mentioned therein having regard to the limit of the turnover in a particular year. But Section 142, Sub-section (2a) can be resorted to, irrespective of the limit of the turnover and in case, as mentioned in the said section.

(30) THEREFORE, it is clear that before the insertion of Section 44ab, the only safeguard against incorrect and manipulated accounts that might be furnished with the return was Section 142, Sub-section (2a) read with Sub-section (2b). I find, Section 44ab, provides for a further safeguard, in case of amongst others, the corporate body. Dr. Pal has aptly pointed out that the object and purpose of getting the audit report under both the sections is almost the same and identical as the same will appear from the contents of the form required for submission of the audit report as mentioned in Rule 6g, Form No. 30c (incomes under Section 44ab and Rule 14a and Form No. 6b).

(31) IT appears from the and the rules that the same method of conducting audit for filing report is required to be followed in both the cases. It is true that the special audit under Section 142 (2a) stands on a different footing from that of the provision of compulsory audit under Section 44ab. The special audit under Section 142 (2a) can be resorted to in the case of any assessee, if the conditions mentioned therein are fulfilled, irrespective of the limit of the annual turnover, whereas compulsory audit under Section 44ab is required in cases where income of the assessee exceeds the limit stipulated therein. I think the purpose of getting the accounts audited under both the Section 142 (2a) and Section 44ab is to see that there may not be any escapement of the taxable income to the assessment. It is always presumed that the books of account recording dealings and transaction of the income group as bracketed in the aforesaid sections are voluminous, large, and sometimes may be complex so much so that it would be difficult for the Assessing Officer to find out the correctness and veracity and further acceptability of the accounts and income, so further safeguard is provided.

(32) FOR this purpose the aforesaid provision has been made. Under the statute, in my view, different provisions have been made for achieving the same purpose, under different circumstances. In this case the petitioner had to get its accounts audited, not only under the aforesaid provision of Section 44ab of the said Act but also by the Director of Co-operative appointed by the State of West Bengal. Therefore, the scope of projecting manipulated accounts or incorrect statement of income is very little. Sometimes it is possible for an unscrupulous assessee to evade tax by jugglery of accounting in that case action under Section 142 (2a) of themay be resorted to. Upon a careful reading of the Section 142 (2a) it appears to me that the power conferred thereunder is discretionary. This provision in my view can be applied only in case of absolute necessity and when other alternative method is not effective.

(33) THE learned single judge of this court in the case of Peerless [1999] 236 ITR 671 has observed that the exercise of special audit can only be resorted to sparingly and not in a whimsical and capricious manner. This observation is also supported by the judgment rendered by the Allahabad High Court in the case of Swadeshi Cotton Mills. In my view, while respectfully agreeing with the views of the Allahabad High Court, two learned judges of this court and the learned single judge of the Madras High Court, the Assessing Officer before sending the proposal ought to have recorded reasons in the order after having examined the accounts by himself or getting the accounts examined by his subordinate officials, in support of his findings that the nature and complexity of the accounts is such that without special audit proper assessment is not possible to protect the interest of the Revenue. In a case where the provision for special audit under the aforesaid Act is sought to be applied, the Assessing Officer concerned must record as to why the audit report if furnished by the assessee under Section 44ab of the is not accepted rather discarded, because as I have already observed the scope and purpose of the audit report under Section 44ab is almost the same and identical except, little variation. He must also record as to why "this audit report is not helpful to understand the particular accounts, or for removal of his idea of complexity in the accounts. In pursuance of this the Assessing Officer must give hearing to the assessee invariably to give opportunity to explain away his doubt. In the scheme of this Act, there is no express provision for giving a hearing in Section 142 (2a), but when the Assessing Officer exercises discretion under this section the right of the assessee certainly is affected in two ways, (i) the assessee has to incur expenses for the special audit, (ii) any favourable report of the auditor under Section 44ab will be discarded. It is a settled position of law that whenever there arises any civil or evil consequences or affectation of right or creating any obligation compliance with principles of natural justice is necessary and such provision is presumed to be inbuilt in the section itself.

(34) THE Commissioner of Income-tax should not give any approval mechanically and if he finds that there is no examination of the books of account by the Assessing Officer before sending the proposal, he will not certainly give any approval. Under this section, the Commissioner of Income-tax does not exercise the jurisdiction of the appellate authority rather the approving authority. Approval means and connotes supporting and accepting of an act and conduct done by another person. Therefore, it would be his duty to examine on receipt of his proposal, whether the Assessing Officer has correctly done it or not, if he finds that this requirement has not been fulfilled then he must not approve of the same. The decisions cited by the learned Additional Solicitor General are not applicable in this case, those are factually distinguishable. Moreover, some of the decisions were rendered at the interlocutory stage. The principles followed therein are not disputed and in fact it has been followed here. His duty is to examine whether the Assessing Officer has done properly or not and thereafter he will apply his independent mind as to whether on the facts and circumstances as indicated by the Assessing Officer exercise of power for special audit is necessary or not.

(35) IN this case, I find, he has not made any attempt in doing so, rather he has come to his own findings different from the Assessing Officer. Accordingly, the approval is not in consonance with the requirement of law, as such this impugned order is set aside. If any action has been taken, then the respondent authority shall restore the writ petition in position, as if there was no special audit. However, this judgment and order will not prevent and prejudice the respondents if they are advised to proceed afresh but then this has to be done complying with the aforesaid observation.

(36) THUS the petition succeeds.

(37) THERE will be no order as to costs.

(38) IN view of the earlier order, the Department will be entitled to have extension from March 31, 2004, for the period during which this writ petition being W. P. No. 1897 of 2003 was pending till today.

(39) ORIGINAL file which was submitted to the court and kept on record is returned herewith to learned counsel for the Revenue.