Swadeshi Cotton Mills Co. Ltd. v. CIT

171 ITR 634High Court1988#1073 most cited

What is Swadeshi Cotton Mills Co. Ltd. v. CIT authority for?

The Assessing Officer's power to direct a special audit under Section 142(2A) requires an objective assessment of account complexity, not subjective satisfaction. Accounts are 'complex' only if they are genuinely difficult to understand, and the AO must first make a genuine attempt to comprehend them before ordering a special audit.

102

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2016 to 2025.

Also referred to as

Swadeshi Cotton Mills Co. Ltd. v. CIT · special audit section 142(2A) · complexity of accounts · Assessing Officer power special audit · objective assessment 142(2A) · subjective satisfaction 142(2A) · genuine attempt to understand accounts · Swadeshi Cotton Mills 171 ITR 634

Sections most often in play

Section 142(2A)Section 153ASection 132Section 143(3)Section 148Section 153DSection 264Section 288

Issues it is cited on

section 10(31a)section 100section 76section 142(2c)section 153b(1)(b)section 153b(1)section 144barectification under section 154section 206csection 158bcsection 206section 288

Judgments citing Swadeshi Cotton Mills Co. Ltd. v. CIT

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1617/DEL/2019[2016-17]Status: DisposedITAT Delhi19 Jan 2021AY 2016-17

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1616/DEL/2019[2015-16]Status: DisposedITAT Delhi19 Jan 2021AY 2015-16

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1615/DEL/2019[2014-15]Status: DisposedITAT Delhi19 Jan 2021AY 2014-15

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1614/DEL/2019[2013-14]Status: DisposedITAT Delhi19 Jan 2021AY 2013-14

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1613/DEL/2019[2012-13]Status: DisposedITAT Delhi19 Jan 2021AY 2012-13

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1612/DEL/2019[2011-12]Status: DisposedITAT Delhi19 Jan 2021AY 2011-12

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Rajnish Talwar, New Delhi vs. ACIT, Central Circle-4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1611/DEL/2019[2010-11]Status: DisposedITAT Delhi19 Jan 2021AY 2010-11

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Kritika Talwar, New Delhi vs. ACIT Central Circle 4, New Dehli

In the result, all the appeals of the Assessees are allowed

ITA 1609/DEL/2019[2013-14]Status: DisposedITAT Delhi19 Jan 2021AY 2013-14

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Kritika Talwar, New Delhi vs. ACIT Central Circle 4, New Dehli

In the result, all the appeals of the Assessees are allowed

ITA 1608/DEL/2019[2012-13]Status: DisposedITAT Delhi19 Jan 2021AY 2012-13

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Deputy Commissioner of Income Tax, Circle - Agartala, Agartala vs. Shri Subhajit Paul, Agartala

In the result, cross-objection nos

ITA 116/GTY/2018[2014-15]Status: DisposedITAT Guwahati31 Jul 2020AY 2014-15

Bench: Shri A. T. Varkey, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.116/Gau/2018 ("नधा"रणवष" / Assessment Year:2014-15)

For Appellant: Shri Rockein Saikia, JCIT, Sr. DRFor Respondent: Shri Sanjay Modi, FCA
Section 143(2)Section 143(3)Section 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

ACIT Central Circle, Agra vs. D.S. India Jewelmart P Ltd, Mathura

In the result, the appeals of the assessee are allowed and those of Revenue are

ITA 276/AGR/2017[2012-13]Status: DisposedITAT Agra18 Sept 2019AY 2012-13

Bench: : Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 153ASection 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

DCIT Central Circle, Agra vs. Lt. Shri Mradul Garg, Mathura

In the result, the appeals of the assessee are allowed and those of Revenue are

ITA 272/AGR/2017[2010-11]Status: DisposedITAT Agra18 Sept 2019AY 2010-11

Bench: : Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 153ASection 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Ashok Kumar Agarwal, Mathura vs. DCIT Central Circle, Agra

In the result, the appeals of the assessee are allowed and those of Revenue are

ITA 269/AGR/2017[2012-13]Status: DisposedITAT Agra18 Sept 2019AY 2012-13

Bench: : Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 153ASection 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

D.S. India Jewelmart P Ltd, Mathura vs. ACIT Central Circle, Agra

In the result, the appeals of the assessee are allowed and those of Revenue are

ITA 268/AGR/2017[2012-13]Status: DisposedITAT Agra18 Sept 2019AY 2012-13

Bench: : Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 153ASection 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Saurabh Agarwal, Mathura vs. DCIT Central Circle, Agra

In the result, the appeals of the assessee are allowed and those of Revenue are

ITA 263/AGR/2017[2008-09]Status: DisposedITAT Agra18 Sept 2019AY 2008-09

Bench: : Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 153ASection 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

Lt. Shri Mradul Garg, Mathura vs. DCIT Central Circle, Agra

In the result, the appeals of the assessee are allowed and those of Revenue are

ITA 260/AGR/2017[2007-08]Status: DisposedITAT Agra18 Sept 2019AY 2007-08

Bench: : Shri Laliet Kumar & Dr. Mitha Lal Meena

Section 142(1)Section 153ASection 153D

…essee to be complex, in order to protect the interests of the revenue, recourse to the said provision can be had. The word "complexity" used in section 142(2A) is not defined or explained in the Act. As observed in Swadeshi Cotton Mills Co. Ltd. v. CIT [1988] 171 ITR 634 1 (All.), it is a nebulous word. Its dictionary meaning is: "The state or quality of being intricate or complex or that is difficult to understand. However, all that is difficult to understand should not be regarded as complex. What is complex to one may be simple to another. It depends upon one’s level of understanding or comprehension. Sometime…

DCIT, New Delhi vs. M/S. Unitech Ltd., New Delhi

In the result, appeal of the assessee is allowed on preliminary ground, appeal of Revenue and its CO are dismissed

ITA 6648/DEL/2015[2010-11]Status: DisposedITAT Delhi27 Jun 2018AY 2010-11

Bench: Shri Rajpal Yadav & Shri O.P. Kantआयकर अपील सं./ Ita No. 6181/Del/2015 With Co No.376/Del/2015 & "नधा"रण वष"/Assessment Year: 2010-11 M/S.Unitech Limited Dcit, Cir.27(1) 6, Community Centre Vs New Delhi. Saket, New Delhi 17. अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Salil Aggarwal, Ar Revenue By : Shri H.K. Choudhary, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 03/05/2018 घोषणा क" तार"ख /Date Of Pronouncement : 27/06/2018 O R D E R

For Appellant: Shri Salil Aggarwal, ARFor Respondent: Shri H.K. Choudhary, CIT-DR
Section 142Section 143(3)Section 144C(4)

…142(2A) of the Act. It was held that the word “complexity” used in section 142(2A) is not “defined” or “explained” in the Act and therefore approving the interpretation of the Hon’ble Allahabad High Court in the case of Swadeshi Cotton Mills Co. Ltd. vs. CIT 171 ITR 634 (All.), it was held that dictionary meaning of complex is “The state or quality of being intricate or complex or that is difficulty to understand. However all that is difficult to understand should not be regarded as complex. What is complex to one, may be simple to another. It depends upon one’s level of understanding or comprehension. Sometimes…

M/S. Unitech Ltd., New Delhi vs. DCIT, New Delhi

In the result, appeal of the assessee is allowed on preliminary ground, appeal of Revenue and its CO are dismissed

ITA 6181/DEL/2015[2010-11]Status: DisposedITAT Delhi27 Jun 2018AY 2010-11

Bench: Shri Rajpal Yadav & Shri O.P. Kantआयकर अपील सं./ Ita No. 6181/Del/2015 With Co No.376/Del/2015 & "नधा"रण वष"/Assessment Year: 2010-11 M/S.Unitech Limited Dcit, Cir.27(1) 6, Community Centre Vs New Delhi. Saket, New Delhi 17. अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Salil Aggarwal, Ar Revenue By : Shri H.K. Choudhary, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 03/05/2018 घोषणा क" तार"ख /Date Of Pronouncement : 27/06/2018 O R D E R

For Appellant: Shri Salil Aggarwal, ARFor Respondent: Shri H.K. Choudhary, CIT-DR
Section 142Section 143(3)Section 144C(4)

…142(2A) of the Act. It was held that the word “complexity” used in section 142(2A) is not “defined” or “explained” in the Act and therefore approving the interpretation of the Hon’ble Allahabad High Court in the case of Swadeshi Cotton Mills Co. Ltd. vs. CIT 171 ITR 634 (All.), it was held that dictionary meaning of complex is “The state or quality of being intricate or complex or that is difficulty to understand. However all that is difficult to understand should not be regarded as complex. What is complex to one, may be simple to another. It depends upon one’s level of understanding or comprehension. Sometimes…

M/S Unitech Ltd., New Delhi vs. Addl. CIT, New Delhi

In the result, assessee’s appeals is allowed and revenue’s appeal is dismissed

ITA 5180/DEL/2013[2009-10]Status: DisposedITAT Delhi08 Apr 2016AY 2009-10

Bench: Shri I.C. Sudhir & Shri L.P. Sahu Assessment Year: 2009-10 M/S. Unitech Ltd., Vs. Additional Cit, 6-Community Centre, Range-18, Saket, New Delhi-1100 17 New Delhi. (Pan: Aaacu1482H) (Appellant) (Respondent) Assessment Year: 2009-10 Additional Cit, Vs. M/S. Unitech Ltd., Range-18, 6-Community Centre, New Delhi. Saket, New Delhi (Pan: Aaacu1482H) (Appellant) (Respondent) Assessee By: S/Shri Salil Aggarwal, Adv., Gautam And, Ca & Shjalesh Gupta, Ca Department By: S/Shri Dilip Shivpuri & Ruchir Bhatia, Government Standing Counsels Date Of Hearing : 12 .01.2016 Date Of Pronouncement: 08 :04.2016 Order Per I.C. Sudhir:These Cross Appeals Preferred By Assessee & Revenue Are Directed Against The Order Of Learned Cit(A)-Xxi, New Delhi Dated 16.8.2013 & Relate To Assessment Year 2009-10. 2. The Appellant-Assessee Is A Public Limited Company Engaged In The Business Of Construction & Development Of Real Estate Projects. For The Assessment Year Under Consideration, It Filed A Return Declaring An Income Of Rs. 922,30,17,671/- On 29.9.2009, Which Came To Be Assessed At An Income Of Rs. 3361,18,87,560/- In An Order Dated 1.8.2012 Under Section 143(3) Of The Act. On Appeal, Learned Cit(A) Granted Part Relief To The Appellant & Hence The Appeals Before Us.

For Appellant: S/Shri Salil Aggarwal, Adv., Gautam and, CA and Shjalesh Gupta, CAFor Respondent: S/Shri Dilip Shivpuri & Ruchir Bhatia
Section 142Section 143(3)Section 45Section 48

…142(2A) of the Act. It was held that the word “complexity” used in section 142(2A) is not “defined” or “explained” in the Act and therefore approving the interpretation of the Hon’ble Allahabad High Court in the case of Swadeshi Cotton Mills Co. Ltd. vs. CIT 171 ITR 634 (All.), it was held that dictionary meaning of complex is “The state or quality of being intricate or complex or that is difficulty to understand. However all that is difficult to understand should not be regarded as complex. What is complex to one, may be simple to another. It depends upon one’s level of understanding or comprehension. Sometimes…

ACIT, Chennai vs. V.S.L.India Private Limited, Chennai

In the result, the appeal of the Department in ITA

ITA 1703/CHNY/2013[2008-09]Status: DisposedITAT Chennai01 Feb 2016AY 2008-09

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. V. Vivekanandan, CIT. DRFor Respondent: Shri. R. Vijayaraghavan, Advocate
Section 143(1)Section 143(2)Section 143(3)Section 195Section 40

…g proceedings, the ld. Authorised Representative submitted that ITA Nos.1701 to 1703/2013. :- 7 -: "18,51,471/- was wrongly added back and that should be allowed in view of Supreme Court decision in the case of M/s.Swadeshi Cotton Mills Company Ltd vs. CIT 223 ITR 1989 and M/s. Malwa Vanaspathi and Chemical Company vs. CIT 225 ITR 383 as interest payment takes the character of compensatory nature and be allowed. The ld. Assessing Officer found that no evidence was produced and the interest is penal in nature not compensatory considering the collection of tax from clients and defaulted on payment of taxes t…