TaxTMI 
TaxTMI 
2021 (5) TMI 510
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....r this assessment year, the assessee's case was taken up for limited scrutiny under CASS which fact can be discerned from page 19 of PB and he drew our attention to the notice issued on 29.07.2016 u/s 143(2) of the Act informing that the assessee's case has been selected for limited scrutiny under CASS. From a perusal of the same, we note that the reason for limited scrutiny was for three items; i) Income from heads of income other than business/profession mismatch ii) Sales turnover mismatch iii) Investments in unlisted equities 3. This fact of limited scrutiny on these three items are also discernible from perusal of page 22 and 23 of PB which is the copy of notice sent by the AO u/s 142(1) dated 21.02.2017. It is noted that the assessee has replied to the notice of AO vide letter dated 17.08.2016 and 14.04.2017 which is available at page 21 & 24-25 of the PB. And the AO after going through the submissions and replies along with supporting documents and after hearing the assessee, the AO has passed the assessment order dated 11.08.2017 wherein he assessed the total income as per normal provisions at Rs. 91,95,770/- and book profit u/s 115JB of the Ac....
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....es other than on the issues for which limited scrutiny has been selected for by CASS, the AO could not had gone into any other issues now raised by the Ld. PCIT (supra). So, according to Ld AR, the AO was justified in not enquiring in to the issue of Insurance Premium (Keyman Policy), which omission on the part of AO has been racked up in the revisional jurisdiction, which Ld PCIT cannot do because the AO's omission is as per the CBDT circular and therefore cannot be held to be erroneous. Therefore, according to Ld AR, the impugned action of Ld. PCIT by exercising jurisdiction u/s 263 of the Act on this issue i.e. Insurance Premium (Keyman Policy) of Rs. 10,00,000/- is akin to Ld. PCIT trying to do indirectly what the AO could not have done directly. It was brought to our notice that even though these material facts were brought the notice of Ld. PCIT, he did not drop the proceedings. Therefore, he pleaded that impugned action of Ld PCIT may be quashed. Per-Contra, the Ld CIT DR, fully supported the impugned order and submitted that the even though Assessing Officer has to conduct scrutiny only on the issues raised by the CASS limited scrutiny, however if the A.O wanted to enlar....
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....2020 without satisfying the essential condition precedent to invoke the jurisdiction u/s 263 of the Act. Therefore the very initiation of jurisdiction by issuing SCN itself is bad in law and therefore it is quashed. Consequently all further actions/proceeding including the impugned order of Ld. PCIT is non-est in the eyes of law. For this we rely on the decision of this Tribunal in Sanjib Kumar Khemka in ITA No. 1361/ Kol/2016 for AY 2011-12 dated 02.06.2017 wherein it has been held that: "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 assessee has claimed to have filed an appeal before Ld. CIT(A) challenging the jurisdiction exceeded by the AO while framing the assessment....
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....tter 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. 9. This tribunal's yet another decision in ITA No.1011/Kol/2017 in Sri Hartaj Sewa Singh vs. DCIT,(IT),Circle1(1), Kolkata decided on 27.04.2018 also decides the instant issue in assessee's favour on identical reasoning. We conclude in these facts and circumstances that the PCIT has erred in law and on facts in holding the impugned assessment as erroneous causing prejudice to the interest of Revenue on the ground which nowhere formed subject-matter of the CASS scrutiny as it is evident from the case records. We reiterate the learned co-ordinate bench's detained reasoning hereinabove that....