TaxTMI 
TaxTMI 
2021 (5) TMI 485
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....ring income of Rs. 2, 28, 130/- and agricultural 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 s....
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....e passed the order u/s 263, being taken the case for limited scrutiny under CASS and, therefore, 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 grou....
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....closing stock' as reflected in the audited accounts of the assessee. We are of a strong conviction that now when the case of the assessee was selected for limited 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....
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....he materials on record. The primary issue in the case on hand revolves whether it is a case selected under CASS for limited scrutiny or regular scrutiny. It can be seen from the grounds 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 unde....
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....that the proceedings u/s 147 of the Act are primary proceedings and proceedings u/s 263 of the Act are collateral proceedings and in such collateral proceedings, the validity of initiation of the original proceedings u/s 147 of the Act 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 wa....
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....,31,750/- was made by the assessee but the AO found credited amount of Rs. 5,76,056/- only. Thus, total deposits made in the bank were not brought to tax; (iii) There was transactions of Rs. 3 76,225/- through credit card which was not explained and thus the entire amount was liable 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 pr....
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....ecking the above issues and by not making adequate enquiry the Assessing Officer has not assessed the proper income and the order has become erroneous and prejudicial to the interest of the revenue. In view of the above, the order dated 29/03/2014 passed by ACIT, Circle-43, Kolkata is found to be erroneous and prejudicial to the interest of revenue and hence it is set aside with the direction to pass fresh assessment order 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 provisio....
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.... the AO is not true. b) Deposit of cash Rs. 19,31,750/- in HDFC bank A/c 0315100006743 From the order of AO we find that AO has already made the addition of the entire amount as unexplained cash credit. Therefore, the allegation of the Id. CIT-A that the order of AO is erroneous and prejudicial to the interest of Revenue is not true. c) Credit card payment of Rs. 3,76,225/- From the order 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 gain....
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....g in mind entirety of the case, we deem it fit and proper to uphold the grievance of the assessee and quash the impugned revision order as devoid of jurisdiction. The assessee gets the relief, accordingly. 6. In the result, assessee's appeal stands allowed." 7. We have perused the letter dated 09.11.2016 addressed by the DDIT (Inv.), Mumbai to ITO-29(3)(4), Mumbai wherein the details 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 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 vi....