TaxTMI 
TaxTMI 
2020 (8) TMI 263
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....eals) failed to understand that the order passed by assessing officer is beyond jurisdiction as being a limited scrutiny case, the learned officer has travelled beyond the issue for which the case was selected and the same therefore, deserves to be quashed." 3. Brief facts of the case are that the assessee filed its return of income electronically on 28.09.2015 declaring total income / loss of (-) Rs.10,76,308/-. As per the assessment order, the case was selected for scrutiny assessment under CASS and statutory notice under section 143(3) of the Act dated 20.09.2016 was issued and duly served on the assessee. A further notice under section 142(1) of the Act calling for details were issued and duly served on the assessee. The relevant assessment year involved in Assessment Year 2015-16 and assessment order under section 143(3) of the Act was passed vide order dated 30.11.2017. This ground of appeal challenges the assessment framed by the Assessing Officer on the issue that the Assessing Officer has had travelled beyond the issues for which the case was selected under the scheme of limited scrutiny. The assessee before CIT(A) and even now before us filed the copy of notice issued ....
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....of CBDT Circular issued vide instruction No. 20/2015 {F.No. 225/269/250-ita-(ii)} under section 143(3) of the Income Tax Act. The relevant circular read as under: - "Subject: Scrutiny Assessments-some important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection ('CASS')-reg:- The Central Board of Direct Taxes ('CBDT'), vide Instruction No. 7/2014 dated 26 09.2014 had clarified the extent of enquiry in certain category of cases specified therein, which are selected for scrutiny through CASS. Further clarifications have been sought regarding the scope and applicability of the aforesaid Instruction to cases being scrutinized. 2. In order to facilitate the conduct of scrutiny assessments and to bring further clarity on some of the issues emerging from the aforesaid Instruction, following clarifications are being made. i. Year of applicability : As stated in the Instruction No. 7/2014 , the said Instruction is applicable only in respect of the cases selected for scrutiny through CASS-2014 ii. Whether the said Instruction is applicable to al l cases selected under CASS : The said Instructio....
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....pproval of the Pr. CIT/CIT concerned . However , such an approval shall be accorded by the by the Pr. CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating 'Complete Scrutiny' in that particular case. Such cases shall be monitored by the Range Head concerned. The procedure indicated at points (a), (b) and (c) above shall no longer remain binding in such cases. (For the present purpose, 'Metro charges' would mean Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Ahmedabad). 4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the Assessing Officer shall issue an appropriate show-cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/ reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances due consideration shall be given to the submissions made by ....
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....r the assessee Shri. Chetan Karia reiterated the same argument has made before CIT(A) and stated that once the Central Board Of Direct Taxes issued circular under section 119 of the Act which is binding on the jurisdictional assessing authorities in view of the decision of Hon'ble Supreme Court in the case of UCO Bank Vs. CIT (1999) 237 ITR 889 (SC). He also pointed out the case law of Hon'ble Calcutta High Court in the case of Amal Kumar Ghosh Vs. ACIT (2014) 361 ITR 0458, wherein Hon'ble Calcutta High Court has considered exactly the very same issue and held that the Circular issued by CBDT under section 119 of the Act is binding on the Revenue authorities. Further, he relied on the Hon'ble Andhra Pradesh High Court in the case of CIT Vs. Smt. Nayana P. Dedhia (2004) 270 ITR 0572 (AP), wherein Hon'ble Andhra Pradesh High Court has also considered the similar circular wherein the issue of limited scrutiny converted into a complete scrutiny by the Assessing Officer, which was held as invalid and ab initio void. On the other hand, the learned Sr. DR Akhtar Ansari, only relied on the order of CIT(A) but he could not controvert the argument made by the learned Counsel for the assessee....
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....s under: - "12. We do not see any inconsistency or contradiction between the circular so issued and section 145. In fact, the circular clarifies the way in which these amounts are to be treated under the accounting practice followed by the lender. The circular, therefore, cannot be treated as contrary to section 145 or illegal in any form. It is meant for a uniform administration of law by all the income-tax authorities in a specific situation and, therefore, validly issued under section 119. As such, the circular would be binding on the department. The other judgment on which reliance was placed by the department was a judgment of a Bench of two Judges of this Court in Kerala Financial Corpn. v. CIT [1994] 210 ITR 129/ 75 Taxman 573, where this court, following the majority view in State Bank of Travancore's case (supra) held that interest which has accrued on a 'stricky' advance has to be treated as income of the assessee and taxable as such. It is said that ultimately, if the advance takes the shape of a bad debt, refund of the tax paid on the interest would become due and the same can be claimed by the assessee in accordance with law. For reasons s....