Law:

Section:

Section 142 of the Income-tax Act, 1961 - Assessment - Inquiry before assessment - Whether in terms of section 142(2A) special audit can be assigned to a person without fixing either remuneration or norms on which remuneration is to be calculated after work is completed and after conveying same to him - Held, no - Whether scheme of Act does not envisage any consent being obtained from assessee in respect of remuneration payable to special auditor nor does it envisage any consultation with him before determining said remuneration and decision of Chief Commissioner/Commissioner with respect to remuneration payable to special auditor is final and binding upon assessee - Held, yes - Whether, therefore, while determining remuneration of special auditor under section 142(2D), Commissioner cannot abdicate his duty to determine remuneration payable to special auditor, simply by accepting an amount mutually agreed between auditor and assessee - Held, yes - Whether where Commissioner had decided to fix remuneration of special auditor as per scale approved by ICAI or had agreed to demand of special auditor for payment of remuneration to be calculated as per that scale, it was open to him to fix remuneration of special auditor at an amount lower than minimum amount calculated in terms of scale approved by ICAI for that purpose - Held, no FACTS The petitioner was a firm of chartered accountants. It was nominated as a special auditor of respondent No. 3 - company and the Commissioner (respondent No. 1) fixed its remuneration at the scale prescribed by the ICAI. The petitioner accepted the assignment, subject to the condition that the remuneration would be paid to it as per the scale prescribed by the ICAI. According to the petitioner, soon thereafter a meeting of respondent Nos. 1 to 3 was convened in the chamber of respondent No. 1 which was attended by one 'D', on behalf of respondent No. 3, and the remuneration payable to the petitioner at the scale prescribed by the ICAI was fixed in that meeting. The petitioner completed the assignment for the financial year 2002-03 and raised a bill of Rs. 49,94,419, based upon the scale prescribed by the ICAI. The bill was duly paid…

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