The existing provisions
contained in sub-section (2A) of section 142 of the Income-tax Act, inter alia,
provide that if at any stage of the proceeding, 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.The expression “nature and complexity of the accounts” has been
interpreted in a very restrictive manner by various courts.
It is, therefore, proposed to amend the
aforesaid sub-section so as 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.
