TaxTMI 
TaxTMI 
2019 (6) TMI 1179
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.... law and quashed. II. The Assessing Officer has exceeded his jurisdiction in finalizing a case scrutiny beyond the scope of CBDT circular and without following due process and therefore be held as bad in law." 3. The learned Authorized Representative for the assessee further pointed out that the issue stands covered by the order of Tribunal in connected cases wherein similar issue was decided in favour of the assessee. 4. The learned Departmental Representative for the Revenue, as directed by the Tribunal had produced the assessment records and had placed reliance on the order of Assessing Officer. He stressed that the case of the assessee was picked up for complete scrutiny. 5. I have heard the rival contentions and perused the record. On the perusal of record, the issue which arises for adjudication is whether in the present case where the case was selected for scrutiny through Computer Aided Scrutiny Selection (CASS) for the reason, i.e. "low profit before interest and taxes" shown, can the Assessing Officer enlarge the scope of scrutiny and go into the eligibility of claim under section 80P of the Act. The perusal of the assessment order reflects that the case....
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....ase of Suresh Jugraj Mutha vs. Addl.CIT vide ITA No.05/PUN/2016 for the assessment year 2011-12, order dated 04.05.2018. In this case, the Tribunal analyzed the scope of the circulars/provisions and came to the conclusion that such additions made by the Assessing Officer are not sustainable in law. For the sake of completeness of this composite order, we proceeded to extract the relevant paragraphs from 9 onwards of the said order of the Tribunal (supra) and the same are extracted hereunder :- "9. We heard both the parties and perused the orders of the Revenue on the legal issue raised by the assessee. We have also considered the decisions relied on by both the parties. It is an undisputed fact that the reason for which the case was picked up for limited scrutiny relates to the AIR information on the cash deposits in the savings bank account. It is also an undisputed fact that the AO did not obtain the written approval of the concerned Commissioner before extending the scope of scrutiny to the interest disallowed and denial of claim of deduction u/s.54 of the Act. Further, it is on record that the Board did not permit the Assessing Officers to extend the scope of scrutiny ....
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.... facts present case of the assessee. We therefore proceed to extract the relevant findings given by the Tribunal here as under : "10. The learned Authorized Representative for the assessee pointed out that the assessee was engaged in road construction and building of projects. He pointed out that during the course of Survey on 30.01.2008, the assessee had made a declaration of Rs. 33,18,000/- + Rs. 12 lakhs + Rs. 13,467/- which was included in the return of income filed by the assessee. He further stated that the case of assessee was picked up for scrutiny. The learned Authorized Representative for the assessee brought to our attention, the application made under the Right to Information Act, as to the basis for selection of case of the assessee for the relevant year under scrutiny. It was specifically asked whether the case was selected for scrutiny under CASS. In reply, the Central Public Information Officer stated that the case of assessee was not selected for scrutiny under CASS. Further, the assessee has asked as to why its case was selected for scrutiny since it was covered by relaxed scrutiny norms. In answer, it was pointed out that the case was selected f....
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.... has to be set aside. He further referred to the decision of Hon'ble Bombay High Court in Bombay Cloth Syndicate Vs. CIT (1995) 214 ITR 210 (Bom) for the proposition that the CBDT Instructions were binding. 11. The learned Departmental Representative for the Revenue on the other hand, pointed out that as per the guidelines of CBDT, the cases could be selected, may be not through CASS. Our attention was drawn to the order of Assessing Officer, wherein he has elaborately dealt with the issue that income increased during the year only because of notional disallowance of expenses under section 40(a)(ia) of the Act and not because of declaration of additional income by the assessee. He stresses that the case was selected under normal scrutiny proceedings and excess expenditure of bad debts claimed by the assessee were disallowed by the Assessing Officer. He then went into merits of the case. It was also stressed by the learned Departmental Representative for the Revenue that the declared income in the hands of assessee means the book profit. 12. The learned Authorized Representative for the assessee in rejoinder pointed out that in the case of assessee, he declared add....
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....g income of Rs. 81,64,590/-. The case of authorities below is that the assessee had not fulfilled the conditions laid down in the guidelines for taking up the case for scrutiny assessment year under consideration and hence, there was no merit in the claim of assessee that it had fulfilled the conditions laid down in guidelines. The whole gamut of arguments and discussion in the orders of Assessing Officer and CIT(A) is on this account that the assessee had not fulfilled the conditions relating to Survey cases for financial year and the case of the assessee could be picked up for scrutiny. The assessment order was passed on 09.09.2010 and the appellate order was passed on 04.01.2012. The assessee thereafter moved an application under the Right to Information Act, wherein a specific question asked was with regard to selection of scrutiny and other relevant information relating to assessment year 2008-09. The specific question asked by the assessee was whether its case was selected for scrutiny under CASS and in case it was not selected under CASS and why the same was picked up for scrutiny. The assessee also asked that under which norms the case was selected for scrutiny and whether ....
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....rutiny in CASS which is the reply given in answer to RTI query as per letter dated 12.04.2012. The second aspect is that the case of assessee was selected for scrutiny in view of the guidelines contained in F.No.225/93/2009/ITA.II. The assessee has placed the copy of said guidelines on record at page 23 of the Paper Book, wherein it is provided that the case of any assessee may be selected for scrutiny after recording reasons and after obtaining the approval of CCIT / DGIT. In other words, the case of assessee could be picked up for scrutiny manually but the same had to be after recording reasons for such an action and after obtaining the approval of CCIT / DGIT. However, the Assessing Officer vide letter dated 13.05.2013 has categorically mentioned that no previous approval of CCIT was obtained to select the case manually for scrutiny for assessment year 2008-09. In the above circumstances, where the order has been passed against the norms laid down by the CBDT vide its guidelines which were binding upon the Assessing Officer, then the order passed by the Assessing Officer is bad in law. The instructions issued by the CBDT are to be strictly followed by the authorities i.e. Assess....