We have already discussed the provision of section 142(1) in our previous article. Here we will discuss the provisions of section 142(2) as well as its sub-section.
As per section 142(2) of the Income Tax Act, the assessing officer with the purpose of obtaining full information; in respect of the income or loss of any person, may make such inquiry as he considers necessary.
Section 142(2A) of the Income Tax Act
The report of audit of the accounts of an assessee which needs to be furnished U/S 142(2A) shall be in Form No. 6B.
Section 142(2A) provides that; at any stage of the proceedings before him, if the assessing officer doubts about the correctness of the accounts; or business activity of the taxpayer, multiplicity of transactions in the accounts, interests of the revenue, etc.; he may direct the taxpayer to get his accounts audited by an accountant as defined in the explanation U/S 288(2); who is nominated by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. The AO may ask him to furnish a report of such audit in the prescribed form duly signed & verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the AO may require.
However, the AO before asking the assessee to get his accounts audited; must obtain the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. The assessing officer shall give the assessee a reasonable opportunity of being heard; before directing him to get his accounts audited.
Section 142(2B) of the Income Tax Act
As per the section 142(2B), the provisions of section 142(2A) shall have the effect notwithstanding that; the accounts of the taxpayer have been audited under any law for the time being in force or otherwise.
Section 142(2C) of the Income Tax Act
Section 142(2C) of the income tax act provides that, the assessee shall furnish every report U/S 142(2A) to the assessing officer within such period as the assessing officer may specify.
In the case where the assessee makes an application to the assessing officer for any good & sufficient reason, the assessing officer may extend the period by such further period as he thinks fit so. However, the total period initially fixed as well as period further extended, shall not exceed 180 days from the date on which the assessee received the direction U/S 142(2A).
Section 142(2D) of the Income Tax Act
Section 142(2A) provides that; the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner; shall determine the expenses of any audit U/S 142(2A) including the remuneration of the accountant. The expenses determined by them will be final, and the assessee must pay those expenses. In case of default of such payment, the payment shall be recoverable from the assessee in the manner provided in Chapter XVII-D for the recovery of arrears of tax.
In case, where the assessing officer had issued any direction for audit U/S 142(2A) on or after 1st June 2007, the central government shall pay the expenses of such audit including the remuneration of the accountant, determined as per the guidelines as may be specified.