TaxTMI 
TaxTMI 
2020 (10) TMI 425
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....o look in to any other issue which the Assessing officer himself could not look? 2. Whether on the facts and in the circumstance of the case the Income tax Appellate Tribunal was right in holding that invoking of Section 56(2)(vii)(b) of the Income Tax Act 1961 is beyond the purview of the Assessing officer when the reason for limited scrutiny is 'purchase of property' and the same issue is very much related to the purchase of property? 3. Whether on the facts and in the circumstance of the case the Income Tax Appellate Tribunal was right in concluding that while completing the assessment under limited scrutiny the Assessing Officer cannot look beyond the issue for which the case was selected for scrutiny without noting that the CBD instruction No.20/2015 has exception clause in 3(d) to convert the same into a complete scrutiny?" 3. The assessee is an individual and a partner in a firm under the name and style of Sri Ram Associates. She filed her return of income on 27.10.2015 admitting a total income of Rs. 2,58,110/-. The return was processed under Section 143(1) of the Act. Subsequently, the case was selected under Computer Aided Scrutiny Selection [....
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....r, stepped into the shoes of the valuation officer, made enquiry and ascertained that the guideline value was not fair market value of the property and the actual consideration paid by the assessee represented the fair market value. Therefore, it was contended that there was no occasion for the PCIT to invoke the power under Section 263 of the Act. The assessee placed reliance on the decision of Agra Tribunal in the case of Income Tax officer, 1(3) Vs. Ramesh Chandra Kulshresth and others ITA No.228/Agra/ 2018. 7. The PCIT considered the explanation and held that in the first place a request has to be made by the assessee for valuation of property and nothing is discernible from the records that the assesee made any request, which needs to any inference that the assessing officer did apply his mind to the fair market value and the consequential taxability of the investment as 'unexplained investment' under Section 56(2)(vii)(b)(ii) of the Act. 8. The PCIT further held that though the assessing officer verified the source of funds, he failed to apply the said provision, namely, Section 56(2)(vii)(b)(ii) of the Act. Thus, the PCIT rejected the explanation given by the a....
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....d, two type of cases have been selected for scrutiny in the current Financial year - one is 'Limited Scrutiny' and other is 'complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in 'Limited scrutiny' or 'Complete Scrutiny' through notices issued under section 143(2) of the Income-tax Act, 1961 ('Act'). The procedure for handling 'Limited scrutiny' cases shall be as under: a. In 'Limited scrutiny' cases, the reasons / issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under section 142(1) of the Act in 'Limited Scrutiny' cases shall remain confined only to the specific reasons / issues for which case has been picked up for scrutiny. Further, the scope of enquiry shall be restricted to the 'Limited Scrutiny' issues. c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'Limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. Five lak....
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....mpugned order are set aside and the substantial question no.3 is left open to be agitated by the Revenue in TCA No.158 of 2020. 15. The substantial question nos.1 and 2 are interconnected namely, the power of the PCIT under Section 263 of Act and whether he could have set aside the assessment on the ground that the assessing officer did not invoke Section 56(2)(vii)b(ii). The reading of the assessment order shows that the case was selected for limited scrutiny only on this aspect regarding the sale consideration paid by the assessee for purchase of the immovable property and the source of funds. The assessing officer has noted that the sale consideration paid by the assessee was Rs. 41,50,000/- and she has paid stamp duty and other expenses of Rs. 5,75,000/-. The source of funds was verified and the assessing officer was satisfied with the same. The PCIT while invoking his power under Section 263 of Act, faults the assessing officer on the ground that he did not make proper enquiry. It is not clear as to what in the opinion of the PCIT is 'proper enquiry'. By using such expression, it presupposes that the assessing officer did conduct an enquiry. However, in the opinion ....