TaxTMI 
TaxTMI 
2021 (1) TMI 1127
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....assessment order passed by the AO dated 18.12.2017 for AY 2015-16 by exercising his revisional jurisdiction contended that the Ld. PCIT erred in invoking the revisional jurisdiction u/s 263 of the Act without satisfying the condition precedent as contemplated u/s 263 of the Act. Therefore, according to Ld. A.R, the impugned order of Ld. PCIT is bad in law and therefore, being without jurisdiction has to be quashed. According to Ld. A.R, in this case for this assessment year, the assessee's case was taken up for limited scrutiny under CASS which fact can be discerned from page 9 of PB-I and he drew our attention to the notice issued on 21.03.2016 u/s 143(2) of the Act informing that the assessee's case has been selected for limited scrutiny ....
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....es, 1962 (hereinafter referred to as the Rule) which the Ld. PCIT has stated in his SCN as under: 5. Pursuant to SCN of Ld. PCIT, the assessee had filed its reply objecting to the very invocation of revisional jurisdiction by Ld. PCIT vide letter dated 03.03.2020. A copy of which is seen placed at 32 to 37 of PB in which the assessee has clearly stated that the assessee's case for AY 2015-16 was selected for scrutiny assessment only for the limited scrutiny under CASS for the three (3) items discussed supra and issue of disallowance u/s 14A read with Rule 8D in respect of exempt income was not the reason for selection of the case for limited scrutiny. It was pointed out by assessee that as per CBDT Instruction No. 2/2014 dated 26.09.2014....
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.... investment which yielded exempt income [ Rs. 14,18,798/- u/s 14A ]by relying on the decision of ITAT Kolkata in REI Agro Ltd. in 144 ITD 141 (Kol-Trib) which was upheld by the Hon'ble jurisdictional Calcutta High Court in the order dated 09.04.2014 in ITA No. 220 of 2013. Therefore according to Ld. A.R on merits also no disallowance was warranted. Therefore, looking from any angle according to Ld. AR, the AO by accepting the computation & suo-moto disallowance in respect of exempt income is a correct action or plausible view on the issue, and so he pleaded that impugned action of Ld PCIT may be quashed. Per-Contra, the Ld CIT DR, fully supported the impugned order and does not want us to interfere. 6. After hearing both parties and peru....
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....s it is noted that Ld. PCIT has ventured to exercise his revisional jurisdiction by issuing SCN dated 18.12.2017 without even satisfying the condition precedent to invoke the jurisdiction u/s 263 of the Act. Therefore the 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. ....
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....n the Tribunal held as under: "8. Next comes the assessee's second substantive argument that since the Assessing Officer had framed his regular assessment involving limited scrutiny on the above stated issues not including sec. 33AB deduction to the purpose of the impugned withdrawals. We find that the same is duly covered in its favor as per this tribunal's co-ordinate bench's decision in ITA No.1361/Kol/2016 in Sanjeev K. Khemka vs. Pr. Commissioner of Income-Tax-15, Kolkata decided on 02.06.2017 as under:- "4. We have heard the rival contentions of the parties and perused the 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 scrut....
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....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 the sec. 263 revision proceedings ought not to have been set into motion for expanding the jurisdiction of the Assessing Officer to examine the issues beyond the scope of limited scrutiny. We therefore reverse the PCIT's action assuming sec. 263 revision jurisdiction in these facts and circumstances." 8. In the light of the discussion and case laws (supra), we are inclined to hold t....