The assessee is a partnership firm. The A.O. wants Statement of Affairs of all the partners, not only for the year under scrutiny and the preceding year but also for the next 2 years. To elaborate further case for AY. 2009-10 is under scrutiny. Details being asked for as at 31-03-2008, 31-03-2009. Also the period falling in future period i.e as at 31-03-2010. Even insists for 31-03-2011for which the itr filing date is 30Sept. 2011. Please let me know how far can the AO go and ask for such details. Is there any circular or case law .
10 August 2011
If the AO receives prior approval from Joint Commissioner of Income tax, he /she can ask for statement of affairs of the assessee for three years prior to the year under scrutiny. But, as per my understanding, AO is acting beyond his / her powers in asking subsequent year's assets & liabilities statement. Pl refer section 142(1)(iii) (a) & (b) of the Income tax Act,1961. Perhaps asset and liabilities of partner's is asking in view of section 142(2) of the said act.
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