JUDGMENT:

D.K. JAIN, J.:

Leave granted.

2. These matters have been placed before the three-Judge Bench in view of a common order dated 14th December, 2006, passed by a two-Judge Bench of this Court. The Order reads as follows:

"When the matter was taken up, learned counsel for the petitioner placed reliance on a decision of this Court in Rajesh Kr. & Ors. Vs. Deputy Commissioner of Income Tax & Ors. According to learned counsel for the petitioner, before any direction can be issued under Section 142 (2A) of the Income Tax Act, 1961 (in short the Act) for special audit of the accounts of the assessee, there has to be a pre-decisional hearing and an opportunity has to be granted to the assessee for the purpose. A close reading of the decision shows that the observations in this regard appear to have been made in the context of the assessments in terms of Section 158 BC (Block Assessment) of the Act. Such assessments are relatable to a case when raid has been conducted at the premises of an assessee. Had that been so, limited to the facts involved in that case, we would have negatived the contentions of learned counsel for the petitioner. But, certain observations of general nature have been made. The effect of these observations appear to be that in every case where the Assessing Officer issues a direction in terms of Section 142 (2A) of the Act, the assessee has to be heard before such order is passed. This does not appear to us to be the correct position of law. Therefore, we refer the matter to a larger Bench. The records be placed before Honble the Chief Justice of India for constituting an appropriate Bench."

3. Although no specific question has been formulated for determination by the larger Bench but from the afore- extracted order it is discernible that the Bench had doubted the correctness of the decision of this Court in Rajesh Kumar & Ors. Vs. Deputy Commissioner of Income-Tax & Ors. , to the extent that it tends to lay down as an absolute proposition of law that in every case where the Assessing Officer issues a direction under Section 142 (2A) of the Income Tax Act, 1961 (for short the Act), the assessee has to be heard before such an order is passed. In other words, the Bench of two learned Judges have felt that it may not be necessary to afford an opportunity of hearing to an assessee before ordering special audit in terms of Section 142 (2A) of the Act. This is the short controversy before us.

4. As a common question of law is involved in both the cases and even the background facts are identical, these are being disposed of by this judgment. However, before adverting to the factual matrix, we propose to address ourselves on the afore-noted question of law on which the latter Bench has expressed its reservations. At the outset, we may also note that in Rajesh Kumar (supra), while observing that the principles of natural justice must be held to be implicit in Section 142 (2A) of the Act, learned Judges finally held as under:

"The hearing given, however, need not be elaborate. The notice issued may only contain briefly the issues which the Assessing Officer thinks to be necessary. The reasons assigned therefor need not be detailed ones. But, that would not mean that the principles of natural justice are not required to be complied with. Only because certain consequences would ensue if the principles of natural justice are required to be complied with, the same by itself would not mean that the court would not insist on complying with the fundamental principles of law. If the principles of natural justice are to be excluded, Parliament could have said so expressly."

5. Sub-sections (2A), (2B), (2C), (2D) and 3 of Section 142 of the Act run as follows:

"(2A) If, at any stage of the proceedings before him, the Assessing Officer having regard to the nature and complexity of the accounts of the assessee and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the pr