Limited scrutiny cannot be expanded to complete scrutiny without approval; assessment under section 144 was invalid.

Assessment framed on the basis of limited scrutiny could not be expanded into complete scrutiny without approval from the competent authority. The limited scrutiny was linked to cash deposits during the demonetisation period, but those deposits fell in the subsequent financial year, so they did not justify enlargement of the scope for the assessment year under review. The assessment made under section 144 of the Income-tax Act, 1961 was therefore held invalid, and the issue was decided in favour of the assessee and against the Revenue.

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Issues: Whether the assessment framed after selection of the case for limited scrutiny could be expanded into complete scrutiny without approval from the competent authority.

Analysis: The assessment year in question was 2016-17, while the limited scrutiny was stated to relate to cash deposits during the demonetisation period, which fell in the subsequent financial year. On that footing, the assessment could not be converted into complete scrutiny without the requisite approval of the competent authority. The assessment made under section 144 of the Income-tax Act, 1961 was therefore found to be invalid on this ground.

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

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