Hon’ble Rajes Kumar, J.—By means of the present petition the petitioner is seeking the following relief :

“(I) a Writ, Order or Direction in the nature of Certiorari and to quash the order dated 31.12.2009 passed by the Additional Commissioner, Income Tax, Rang-2 Varanasi (Annexure-1 to this writ petition) and also the order dated 31.12.2009 passed by the Commissioner of Income tax, Varanasi (Annexure No. 2 to the writ petition) for special audit of the petitioner’s accounts for AY 2007-08 and to further direct the Ld. Addl. Commissioner Income Tax, Varanasi to complete the petitioner’s assessment for AY 2007-08 on the basis of the provisional balance sheet already submitted by the petitioner.”

2. The brief facts giving rise to the present writ petition are as follows :

The petitioner is a subsidiary company of U.P. Power Corporation Ltd. The company was known as UPPCL from 14/15.1.2000 till 11.8.2003 and with effect from 12.8.2003 UPPCL was converted as holding company of its subsidiary company, viz. M/s. Purvanchal Vidyut Vitran Nigam Ltd., Pachchimanchal Vidyut Vitran Nigam Ltd., Madhyanchal Vidyut Vitran Nigam Ltd. and Dakshinanchal Vidyut Vitran Nigam Ltd.

3. The petitioner is a Government Public Limited Company engaged in the business of distribution of electricity, construction of lines and service provided to the consumers. Under the provision of Section 619(2) of the Companies Act, 1956 (called the ‘Companies Act’ for short) the petitioner is required to get its annual accounts audited by the office of the Comptroller and Auditor General of India (hereinafter referred to ‘C&AG’). Admittedly, for the assessment year in dispute, viz. 2007-08, the petitioner could not get its accounts audited under Section 619(2) of the Income Tax Act (called the ‘Act’ for brevity). It is the case of the petitioner that since the statutory audit under Section 619(2) of the Act could not be made, the petitioner appointed a private auditor and got its accounts audited on the basis of the provisional balance-sheets and profit & loss account and on the basis of such audited reports the petitioner submitted return on 31.10.2009 declaring the total loss of Rs. 11,51,99,56,110/-. The assessment case for the year under consideration was selected for scrutiny assessment and, accordingly, a notice under Section 143 of the Act was issued by the Additional Commissioner of Income Tax, Varanasi. It appears that during the course of hearing the assessing authority issued notice dated 22.12.2009 to the petitioner to show-cause why a special audit be not carried out in your case to arrive at a correct figure of total income/loss of the assessee looking to the nature and complicity of the account. The contents of the notice are as follows :

“CONFIDENTIAL

GOVERNMENT OF INDIA

OFFICE OF THE ADDITIONAL COMMISSIONER

OF INCOME TAX, RANGE - 2

VARANASI.

No. AADCP4092M/ADCIT/R-2/09-10 Dated : 22.12.09

The Principal Officer/Managing Director/Competent Authority

M/s. Purvanchal Vidyut Vitran Nigam Ltd.

Vidyut Nagar Post, DLW, Bhikharipur,

Varanasi.

Sub:- Assessment proceedings for A.Y. 2007-08: regarding

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Please refer to the above.

During the course of hearing u/s 143(3) of the I.T. Act in your case following notices were issued but by and large no compliance was made :

S.No. Notice Date of Remarks

hearing

1. 143(2) dated 24.9.2008 11.10.2008 Non-compliance

& 115WE(2) 24.9.2008

2. 142(1) dated 20.1.2009 29.1.2009 Non-compliance

3. Show cause notice 20.2.2009 Part compliance

u/s 271(1)(b)

dated 11.2.2009

4. 142(1) dated 11.2.2009 20.2.2009 Power of attorney

submitted. Asked to

provide audited final

accounts, tax audit

report and notes to

the account

5. 142(1) dated 2.12.2009 9.12.2009 Part compliance by

Sri O.P.Shukla

submitted coply of

P/L account and

balance sheet etc.

Case was partly

discussed, details as

desired were informed.

6. 142(1) & 115WE(2) 18.12.2009 Requested for adjournment.

dated 15.12.2009 Ca