TaxTMI 
TaxTMI 
2021 (5) TMI 485
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....ral income of Rs. 2, 47, 500 /-. The case was selected for limited scrutiny for the reason that there was a substantial increase in the capital during the year relevant to the assessment year under consideration. Accordingly, the AO issued notices u/s 143 (2) and 142 (1) of the Act. In response thereof, the authorized representative (AR) of the assessee appeared before the AO and furnished the details called for by the AO. After hearing the ld. AR, AO accepted the return filed by the assessee. 3. Subsequently, the Ld. Pr. CIT issued notice to the assessee as to why the assessment order should not be revised u/s 263 of the Act for the reasons, (i) that the assessee filed his return of income for the assessment year under consideration on 25.05. 2015 whereas the due date was 31. 07. 2015 and the assessee had not deposited the capital gain in Capital Gain Deposit Account before the specific date. Therefore, the assessee was not entitled to claim exemption u/s 54 of the Act. Since the AO has failed to make any enquiry or verification, the assessment order is erroneous and prejudicial to the interest of the revenue; (ii) the assessee had shown opening balance of capital as on 01. 04. 2....
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....re, the Pr. CIT has exceeded his jurisdiction in issuing the notice u/s 263 and passing the order u/s 263(1). 2.That the order as passed by the Ld. Pr. CIT is against the principle laid down under the CBDT circular and having not raised the issue in the show cause notice with regard to issue in the "limited scrutiny case" and raising other issues in the. show cause notice, is against the facts and circumstances of the case. Hence the order as passed by the Pr. CIT deserves to be quashed." 6. Vide revised ground, the assessee has raised the legal issue that the impugned order is bad in law as the Ld. Pr. CIT could not have passed the impugned order being taken the case for limited scrutiny under CASS, therefore the Ld. Pr. CIT has exceeded jurisdiction in issuing notice u/ s 263 Act and passing order u/s 263(1) of the Act. Since, the assessee has raised the legal issue in its revised grounds, which does not require any verification of enquiry, we allowed the application after hearing the Ld. Departmental representative (DR) and permitted the Ld. Counsel to argue on the legal ground raised by the assessee. 7. At the outset, the Ld. Counsel submitted that the legal issue raised in....
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.... scrutiny for the reasons viz. (i). Large other expenses claimed in the P&L A/c; and (ii). Low income in comparison to High Loans/advance /Investment in shares, therefore, no infirmity could be attributed to the assessment framed by the A.O on the ground that he had failed to deal with other issues which though did not fall within the realm of the limited reasons for which the case was selected for scrutiny assessment. In other words, the Pr. CIT in the garb of his revisional jurisdiction u/s 263 cannot be permitted to traverse beyond the jurisdiction that was vested with the A.O while framing the assessment. In sum and substance, revisional jurisdiction cannot be exercised for broadening the scope of jurisdiction that was vested with the A.O while framing the assessment. As a matter of fact, what cannot be done directly cannot be done indirectly. Accordingly, in terms of our aforesaid observations, we are of the considered view that as the A.0 had aptly confined himself to the issues for which the case of the assessee was selected for limited scrutiny, therefore, no infirmity can be attributed to his order, for the reason, that he had failed to dwell upon certain other issues whic....
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....s of appeal that the assessee wants to contend that the very initiation of proceedings u/s 143(3) of the Act on the basis of regular scrutiny under the Act was bad in law. The proceedings under section 143(3) of the Act should have been limited to the extent of the information gathered through 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, ....
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....ct can be challenged. The Mumbai bench of the Tribunal in this regard has placed reliance on several decisions, the principal decision being that of the Hon'ble Supreme Court in the case of Kiran Singh & Ors. V. Chaman Paswan & Ors. [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....
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....ble to be added to the total income of assessee but the AO has added only a sum of Rs. 2,98,225/- to the total income of assessee. Thus, there was under assessment of income 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 ....
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....rder after examining 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 Goa A/c were unde....
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....yment 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 Act. However, we find that proper and sufficient enquiries were conducted by the AO at the time of assessment as....
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....ower 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 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." 13. In the case of Nayek Paper Converters vs. ACIT (supra) the Kolkata Bench of the Tribunal has held that where the case was selected for limited scrutiny under section 143(2)(i) of the Act, the AO cannot be expected to make an enquiry of the issues pointed out by the Ld. CIT in his order u/s 263 of....