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Journalism of Courage
The Delhi High Court on Thursday issued notice to the Centre on a plea filed by Vodafone challenging a show cause notice issued by the Income Tax department for a special audit to assess its income for the year 2012-13.
The bench of justices S Muralidhar and Vibhu Bakhru issued notice to the government and the I-T Department seeking their replies by March 21 to the plea which also challenges the amendment to Section 142(2A) of I-T Act that says the assessing officer can seek a special audit in certain circumstances.
Vodafone Mobile Services Ltd has contended that referring a company for special audit is akin to a stigma on it and this power ought to be exercised only after satisfying the twin conditions of “complexity in the accounts and protecting interests of the revenue”.
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Senior advocate P Chidambaram, appearing for Vodafone, contended that issuance of show cause notice to refer their accounts to special audit was done to “save” the department from “limitation” and to pass an assessment order by March 31. He said the firm was willing to waive defence of limitation and the I-T Department can take its own time to assess their accounts without referring it for special audit.
During the hearing, the counsel for the Centre, advocate Manish Mohan, representing the finance ministry, however, objected to the appearance of Chidambaram as counsel for Vodafone, on grounds that Chidambaram was the finance minister when the 2013 amendment was made in Section 142(2A) and was now challenging this provision on behalf of the company.The court, however, refused to accept the objection, and asked the lawyer to come with a “better argument” on next date. The matter will now be heard on March 21.
