Section 142:
Inquiry before assessment.
(1) For the purpose of making an assessment under this Act, the
1
Assessing Officer may serve on any person who has made a return 2
under section 115WD or
section 139 3
or in whose case the time allowed under sub-section (1) of section 139 for furnishing the
return has expired a notice requiring him, on a date to be therein specified,—
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(i) where such person has not made a return 56
within the time allowed under sub-section (1)
of section 139 or before the end of the relevant assessment year, to furnish a return of his income or
the income of any other person in respect of which he is assessable under this Act, in the prescribed
form and verified in the prescribed mannerand setting forth such other particulars as may be
prescribed, or:
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Provided that where any notice has been served under this sub-section for the purposes of this
clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990
to a person who has not made a return within the time allowed under sub-section (1) of section 139 or
before the end of the relevant assessment year, any such notice issued to him shall be deemed to have
been served in accordance with the provisions of this sub-section,
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(ii) to produce, or cause to be produced, such accounts or documents as the 1
Assessing
Officer may require, or
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(iii) to furnish in writing and verified in the prescribed manner information in such form and on
such points or matters (including a statement of all assets and liabilities of the assessee, whether
included in the accounts or not) as the 1
Assessing Officer may require:
Provided that—
(a) the previous approval of the 9
Joint Commissioner shall be obtained before requiring the
assessee to furnish a statement of all assets and liabilities not included in the accounts;
(b) the 1
Assessing Officer shall not require the production of any accounts relating to a
period more than three years prior to the previous year.
(2) For the purpose of obtaining full information in respect of the income or loss of any person, the
1
Assessing Officer may make such inquiry as he considers necessary.
10(2A)If, at any stage of the proceedings before him, the 1
Assessing Officer, having regard to 11the
nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the
accounts, multiplicity of transactions in the accounts or specialised nature of business activity of the
assessee, and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the
previous approval of the 12Principal Chief Commissioner or Chief Commissioner or 13Principal
Commissioner or Commissioner, direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the 14
Principal Chief
Commissioner or Chief Commissioner or 15
Principal Commissioner or Commissioner in this behalf and
to furnish a report of such audit in the prescribed formduly signed and verified by such accountant and
setting forth such particulars as may be prescribed and such other particulars as the 16
Assessing Officer
may require:
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Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited
unless the assessee has been given a reasonable opportunity of being heard.
(2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the
assessee have been audited under any other law for the time being in force or otherwise.
(2C) Every report under sub-section (2A) shall be furnished by the assessee to the 16
Assessing
Officer within such period as may be specified by the 16
Assessing Officer:
Provided that the 16
Assessing Officer may, 18
suomotu, oron an application made in this behalf by the
assessee and for any good and sufficient reason, extend the said period by such further period or periods
as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so
extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction
under sub-section (2A) is received by the assessee.
(2D) The expenses of, and incidental to, any audit under sub-section (2A) (including the remuneration
of the accountant) shall be determined by the 14
Principal Chief Commissioner or Chief Commissioner or
15
Principal Commissioner or Commissioner (which determination shall be final) and paid by the assessee
and in default of such payment, shall be recoverable from the assessee in the manner provided in Chapter
XVIID for the recovery of arrears of tax:
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Provided that where any direction for audit under sub-section (2A) is issued by the Assessing
Officer on or after the 1st day of June, 2007, the expenses of, and incidental to, such audit (including the
remuneration of the Accountant) shall be determined by the 14
Principal Chief Commissioner or Chief
Commissioner or 15
Principal Commissioner or Commissioner in accordance with such guidelines as
may be prescribedand the expenses so determined shall be paid by the Central Government.
(3) The assessee shall, except where the assessment is made under section 144, be given an
opportunity of being heard in respect of any material gathered on the basis of any inquiry under
sub-section (2) 19
or any audit under sub-section (2A) and proposed to be utilised for the purposes of the
assessment.
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(4) The provisions of this section as they stood immediately before their amendment by the Direct
Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the
assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references
in this section to the other provisions of this Act shall be construed as references to those provisions as for
the time being in force and applicable to the relevant assessment year.
Notes:
1. Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 1-4-1988).
2. Subs. by Act 18 of 2005, s. 44, for “under section 139 or in whose case the time allowed under sub-section (1) of that
section” (w.e.f. 1-4-2006).
3. Subs. by Act 4 of 1988, s. 47, for “or to whom a notice has been issued under sub-section (2) of section 139 (whether a
return has been made or not)” (w.e.f. 1-4-1989).
4. Ins. by s. 47, ibid (w.e.f. 1-4-1989).
5. Subs. by Act 12 of 1990, s. 36, for “before the end of the relevant assessment year” (w.e.f. 1-4-1990).
6. Subs. by Act 21 of 2006, s. 35, for “within the time allowed under sub-section (1) of section 139” (w.e.f. 1-4-2006).
7. Ins. by, s. 35, ibid. (w.e.f. 1-4-1990).
8. Clauses (i) and (ii) renumbered as clauses (ii) and (iii) thereof by Act 4 of 1988, s. 47 (w.e.f. 1-4-1989).
9. Subs. by Act 21 of 1998, s. 3, for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier substituted as “Deputy
Commissioner” for “Inspecting Assistant Commissioner” by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988).
10. Ins. by Act 41 of 1975, s. 43 (w.e.f. 1-4-1976).
11. Subs. by Act 17 of 2013, s. 37, for “the nature and complexity of the accounts of the assessee and” (w.e.f. 1-6-2013).
12. Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013). Earlier substituted as Chief Commissioner or
Commissioner” for “Commissioner” by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988).
13. Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).
14. Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013). Earlier substituted as Chief Commissioner or
Commissioner” for “Commissioner” by Act 4 of 1988, s. 2 (w.e.f. 1-4-1988).
15. Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).
16. Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 1-4-1988).
17. Ins. by Act 22 of 2007, s. 46 (w.e.f. 1-6-2007).
18. Subs. by Act 18 of 2008, s. 31, for “on an application” (w.e.f. 1-4-2008).
19. Ins. by Act 41 of 1975, s. 43 (w.e.f. 1-4-1976).
20. Ins. by Act 36 of 1989, s. 15 (w.e.f. 1-4-1989).