Assessment order invalidated for lack of approval, resulting in deletion of certain additions.

The Tribunal held that the assessment order was invalid due to the Assessing Officer's failure to obtain necessary approval for extending the scope of scrutiny. Consequently, additions related to purchases and labour charges were deleted, while additions related to the difference in receipts and interest under section 244A were confirmed. The appeal was partly allowed, with other grounds raised by the assessee dismissed as academic in light of the relief granted on the preliminary issue.

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Issues Involved:
1. Delay in filing the appeal.
2. Validity of the assessment order due to exceeding the scope of limited scrutiny.
3. Addition of Rs. 14,76,497 towards disallowance of purchases.
4. Addition of Rs. 1,69,160 towards disallowance of labour charges.
5. Additions related to difference in receipts and interest under section 244A.

Detailed Analysis:

1. Delay in Filing the Appeal:
The assessee filed the appeal with a delay of 125 days, attributing the delay to wrong guidance by the Tax Consultant. The Tribunal condoned the delay, finding the reasons for the delay beyond the assessee's control. The Tribunal proceeded to adjudicate the issues on merits.

2. Validity of the Assessment Order:
The primary issue was whether the Assessing Officer (AO) exceeded the scope of limited scrutiny without obtaining the prescribed approval from superior authorities. The case was selected for limited scrutiny under CASS to examine the turnover discrepancies between the assessee's returns and GST provisions. The AO made several additions unrelated to the turnover without formal approval for converting limited scrutiny to full scrutiny.

The Tribunal emphasized that, according to CBDT Circular No.F.No.225/26/2006-ITA.II (Pt.) dated 08th September, 2010, the AO must obtain approval from the Competent Authority to convert limited scrutiny to full scrutiny. In the absence of such approval, the additions made by the AO were deemed unsustainable in law.

The Tribunal referred to the precedent set by the Pune Bench in the case of Suresh Jugraj Mutha vs. Addl.CIT, which held that additions made without the required approval for extending the scope of scrutiny are invalid. Therefore, the Tribunal held that the assessment order was bad in law and void-ab initio.

3. Addition of Rs. 14,76,497 towards Disallowance of Purchases:
The Tribunal found that the addition related to purchases was not connected to the turnover, which was the subject of limited scrutiny. As such, this addition was deleted.

4. Addition of Rs. 1,69,160 towards Disallowance of Labour Charges:
Similarly, the addition related to labour charges was also found to be unrelated to the turnover issue. Consequently, this addition was deleted.

5. Additions Related to Difference in Receipts and Interest under Section 244A:
The Tribunal confirmed the additions of Rs. 1,842 for the difference in receipts and Rs. 2,232 for interest under section 244A, as these were related to the turnover of the assessee, which was the original scope of limited scrutiny.

Conclusion:
The Tribunal allowed the preliminary issue raised by the assessee, holding that the assessment order was invalid due to the AO's failure to obtain the necessary approval for extending the scope of scrutiny. Consequently, the additions related to purchases and labour charges were deleted, while the additions related to the difference in receipts and interest under section 244A were confirmed. The other grounds raised by the assessee were dismissed as academic, given the relief granted on the preliminary issue. The appeal was partly allowed.

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