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Section 142 of the Income-tax Act, 1961 - Assessment - Enquiry before assessment - Assessment year 1996-97 - Assessee, a State Financial Corporation filed its returns - Assessing Authority issued show-cause notice calling upon assessee to furnish explanation/details in respect of certain anomalies in accounts - In reply assessee stated that it would take several months in compiling required information - Assessing Officer passed an order appointing 'KT' as an accountant for purpose of conducting a special audit under section 142(2A) - Whether since Assessing Officer had formed opinion, on basis of material which were before her during course of assessment that nature of accounts was complex and interest of revenue would suffer if a detailed audit was not directed, it could not be said that pre-conditions for appointment of special auditor, as envisaged in section 142(2A), had not been fulfilled - Held, yes - Whether before passing order under section 142(2A), any show-cause notice or opportunity of hearing was required to be given to assessee - Held, no Circulars and notifications - CBDT Instruction No. 1076, dated 12-7-1977 FACTS The assessee, a State Financial Corporation, had been established for the purpose of disbursing loans to various industrial units in the State in order to promote and help industrial activities and the loan was disbursed after following the requisite procedure. Its accounts were duly audited by a chartered accountant. It had submitted its return of income for the assessment year 1996-97. During the course of the assessment proceed- ings the assessing authority issued a show-cause notice calling upon the assessee to furnish explanation/details in respect of as many as 11 heads. The assessee submitted that it would take several months to compile and furnish the requisite information. The Assessing Officer passed an order on 19-3-1999 appointing 'KT' as an accountant for the purpose of conduct- ing a special audit under section 142(2A). Pursuant to the aforesaid order, the auditor, 'KT', had directed the assessee to submit certain informations. On writ, challenging order dated 19-3-1999, it was contended by the assessee, inter alia, that…

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