TaxTMI 
TaxTMI 
2021 (4) TMI 711
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....r, as per the mandate of the scope of limited scrutiny held that the assessee's cash deposits in his savings bank account in Punjab National Bank was Rs. 1,76,93,489/- and cash deposits in his savings bank account at Union Bank of India was Rs. 7,35,000/-, out of which, he has declared Rs. 6,20,870/- as total turnover in statement income and the balance being Rs. 1,14,130/-. Thus, he estimated the total cash deposits in both the savings bank account at Rs. 1,78,07,619/-. The assessee had filed return of income u/s 44AD and 44AE of the Act. The Assessing Officer estimated 8% of the cash deposits in the savings bank account as undisclosed income of the assessee. He initiated penalty proceedings u/s 271A of the Act. He further records in his order that the assessment was completed u/s 144 of the Act. 2.1. Aggrieved, the assessee carried the matter in appeal. The ld. CIT(A), Burdwan, vide his order dt. 28/04/2017, passed u/s 250 of the Act, after considering the submissions of the assessee held as follows:- ".........I find, at the same time, that I cannot completely agree-with the appellant's contention that all the deposits of Rs. 1,76,93,489/- would have emanated fro....
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....he assessee is before us in appeal. 4. The ld. Counsel for the assessee, Shri Soumitra Choudhury, submitted that the Assessing Officer had no powers to travel beyond the reasons for selection of the case for limited scrutiny. He submitted that the reason was to examine the cash deposits in a savings bank account which are more than turnover. The Assessing Officer had considered this cash turnover and brought the same to tax. 4.1. For the proposition that the ld. Pr. CIT cannot invoke his powers u/s 263 of the Act to revise an assessment order passed u/s 143(3) of the Act, on issues which were not covered by the reasons for picking up a case for limited scrutiny and hence were not examined by the Assessing Officer for the reason that they were beyond the scope of limited scrutiny, he relied on a number of other decisions of the Tribunal. We would be referring to them in due course. The ld. Counsel for the assessee further submitted that the order of the Assessing Officer merged with the order of the ld. CIT(A) on this issue specified in the limited scrutiny and under those circumstances, the ld. Pr. CIT, could not invoke his powers u/s 263 of the Act. 5. The ld. D/R, on the....
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....ny selection through CASS, is to examine the cash deposits in savings bank account, as these are more than the turnover. The Assessing Officer stuck to these reasons and completed the assessment u/s 143(3) of the Act. Aggrieved with this order, the assessee carried the matter in appeal before the ld. First Appellate Authority. The ld. CIT(A) considered this order and granted part relief. On these facts, the question is whether the ld. Pr. CIT is empowered to invoke his powers u/s 263 of the Act for revising the order passed u/s 143(3) of the Act dt. 25/08/2016 and direct verification, examination and determination of income as per the order of the ld. CIT(A) on the issue which is admittedly not the reason scrutiny selection through CASS. The ld. D/R admits that the issue on which the ld. Pr. CIT has invoked his powers u/s 263 of the Act is beyond the scope of reason based on which the case was selected for limited scrutiny. The Assessing Officer could not have travelled beyond these reasons without obtaining the permission of the ld. Pr. CIT as per para 4 of the CBDT Instruction No. 7/2014. The question is whether it can be said that there is error in the order of the Assessing Off....
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....ough AIR. Accordingly the proceedings u/s 263 of the Act cannot be expanded beyond the issue raised in AIR. Thus the order u/s 143(3) of the Act beyond the points of AIR is invalid in law and so the same is with the order passed u/s 263 of the Act. It is the further contention of the assessee that in the items which are not subject matter of AIR cannot subject matter of scrutiny. Such matters include salary of the assessee, loans & interest on loans, payment of LIC, Commission & brokerage income etc. It is the case of the assessee that in the assessment order passed u/s 143(3) of the Act, the AO has travelled beyond the points of the AIR on the basis of which the case of scrutiny was selected under CASS module. It is the plea of the assessee that when no addition/disallowance can be made beyond the points mentioned in AIR in the assessment proceedings then same is the case with proceedings initiated u/s 263 of the Act. 4.1 The first aspect which needs to be examined is as to whether the assessee is entitled to challenge the validity of initiation expanded in the proceedings u/s 143(3) of the Act in the present appeals in which he has challenged the validity of expanded ord....
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....[1955] 1 SCR 117(SC) wherein the Hon'ble Supreme Court observed as follows :- "It is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties." Now coming to the facts of the instant case, we find that the instant case was selected on the basis of AIR Information as evident from the order of AO under section 143(3) of the Act. There is also no whisper in the order of the AO for expanding the scope of limited scrutiny after obtaining the permission from the Administrative CIT. The ld. DR has also failed to bring anything contrary to the argument of the ld. AR. Therefore in our considered view the scrutiny should have been limited only to the information emanating from the AIR. Admittedly, the....
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....come by Rs.78,000/-; (iv) The assessee during the year has sold property for Rs.36 lakh and exemption of Rs.19,74,763/- was claimed by assessee u/s. 10(38) of the Act. This fact was not verified by the AO at the time of assessment proceedings. In view of above, the Ld. CIT found the order of AO is erroneous in so far as prejudicial to the interest of Revenue and therefore show-cause notice was issued u/s. 263 of the Act vide dated 13.10.2015 for the clarification of the above transactions. In compliance thereto, the assessee submitted as under : i) The deposit in HDFC bank account No. 03151930000609 was duly reflected in his IT return. Therefore, no cause has happened to the Revenue which is prejudicial to the interest of Revenue. ii) The deposit of Rs.19,73,750/- was duly reflected in the IT return and therefore there was no error which is prejudicial to the interest of Revenue. iii) Regarding the credit card payment, the addition on account of undisclosed cash deposit has already been added by the AO and therefore there is no error causing prejudice to the interest of Revenue. iv) There was no sale of the property and....
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....ning the evidences and documents in respect of the above issues raised after giving opportunity to the assessee and in accordance with law." Being aggrieved by this order of Ld. CIT assessee is in appeal before us on the following grounds:- "(1) For that the L'd Pr. Commissioner of Income Tax erred in exercising the power of revision for the purpose of directing the AO to hold another investigation when the order passed by the AO was neither erroneous nor prejudicial to the interest of revenue. (2) For that the L'd Pr.CIT erred and exceeded jurisdiction by giving direction in respect of the matters which are subject matters of appeal before the CIT(A), therefore order passed by Pr. CIT-15 is unlawful, beyond provision of law and therefore liable to be quashed. (3) For that the L'd Pr. CIT had alleged arbitrarily irrelevant matters, factual and untrue position in the show cause notice u/s. 263 and therefore order passed by Pr. CIT-15 Kolkata u/s. 263 is nullity and liable to be quashed. (4) For that L'd Pr. CIT has wrongly assumed the jurisdiction u/s. 263 by wrongly mentioning that deposits in HDFC Goa A/c & HDFC Porvorim....
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....r of AO, we find that the AO has made the addition of Rs.2,78,225/- out of total credit card payment of Rs.3,76,225/-. Therefore, it is clear that AO has applied his mind while framing the assessment proceedings u/s. 143(3) of the Act. Thus, the allegation of the AO in the impugned order or Ld. CIT u/s. 263 of the Act that there was no proper enquiry conducted by AO at the time of assessment proceedings is not true. d) Sale of property for consideration of Rs. 36 lakh. On perusal of AIR information which is placed on page 1 of the paper book, we find that no immovable property has been sold by assessee in the year under consideration. Besides the above, there is also no whisper in the assessment order for any addition on account of capital gains. Therefore, we find that the allegation of Ld. CIT that AO has not conducted sufficient enquiry in relation to sale of immovable property is not true. 5.1 In view of the above we find that Ld. CIT has passed impugned order u/s. 263 of the Act by holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the....
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....ils of on money in the case of Runwal Green (shops) were given and we find that on money was determined by taking the rate @ Rs. 26,000/- per sqr. ft. while agreements were for lower amounts. However, in the case of the assessee we observe that the agreement value was executed @ Rs. 26,000/- per sqr. ft. Thus we find merits in the contention of the assessee that there is no question of on money as the agreement value was even Mrs. Sonali Hemant Bhavsar higher than the maximum rate which was taken by the DDIT (Inv.), Mumbai to ascertain the amount of on money received by the builder. Moreover, the case of M/s. Runwal Homes Pvt. Ltd. vs. DCIT in ITA No.5621/M/2017 A.Y. 2015-16 the issue of on money has been decided in favour of the M/s. Runwal Homes Pvt. Ltd. by deleting the addition on account of on money. In view of the aforesaid facts, we are of the view that the revisionary order passed by the Ld. Pr. CIT(A) is without jurisdiction and has to be quashed on legal issue as well as on merit. Accordingly, we quash the revisionary order passed under section 263 of the Act by Ld. Pr. CIT. 8. In the result, the appeal of the assessee is allowed." 8.2. The Chandigarh....