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| HC refuses interference in IT audit of JDA | | | Early Times Report
Jammu, Jun 17- Justice JP Singh of J&K High Court Jammu Wing has dismissed the petition filed by Jammu Development Authority against the direction of Assistant Commissioner Income Tax Circle-I Jammu’s order dated December 26, 2008 directing special audit of the accounts of the Authority.
The Court found no ground for interference in the impugned order and observed that the petition is without merit and is accordingly dismissed.
The Assistant Commissioner Income Tax had directed Special Audit of the account of JDA through a Charted Accountant nominated by the Commissioner of Income Tax J&K. Before passing the order the Assistant Commissioner had issued a show cause notice to the JDA indicating that on the asset side of the two balance sheets of the JDA shown that the work in respect of Division 1 and 2 amounting Rs 65, 03, 30, 219 was in progress, but neither the nature of the asset had been explained nor had it been shown as to how this asset had been brought-up. The sources of the funds utilized for the construction of asset, too, had not been disclosed by the JDA. The notice further indicated that balance sheet, the JDA had shown total fixed asset of the value of Rs 11, 29, 30, 536 on which the depreciation had been claimed Rs 40, 64, 004 but as per the scheduled of fixed asset filed by the JDA on December 15, 2008 through its counsel the total value had been shown Rs 1, 08, 34, 82, 381 which figure would not tally with figures given in the balance sheet. The balance sheet and the scheduled of fixed asset filed by the JDA’s counsel indicated that none of the plot of land available with the authority, had been accounted for, in the balance sheet.
The JDA was informed by the show cause notice that it had failed to justify as to how had
it shown Bahu-Plaza Shopping Complex in the schedule of its fixed assets whereas premium was shown to have been received for it from different persons to whom it had been leased out as per the lease agreements executed with the JDA. It is was on the basis of the aforementioned factors that the Assistant Commissioner Income Tax had come to the conclusion that the accounts furnished by the JDA along with the income tax return were incomplete, complex and unreliable disabling determination of the true and correct income of the JDA which warranted special audit of the JDA Accounts by a Charted Accountant.
The JDA challenged the order of the special audit on the various grounds.
Justice Singh observed that as per the records the JDA had not furnished the requisite reply to the queries raised in the show cause notice. Court after going through the record of the respondents did not find any merit in the petitioner’s counsel’s contention that the respondent had not considered JDA’s response to the show cause notice and had hurriedly issued the order directing Special Audit. Both the officers of the income tax department have taken not objective decision as warranted under law after considering petitioner’s response to the show cause notice. Court further said that petitioner has not placed any material on record; on the basis the decision taken by the income tax department may be faulted. JNF
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