2022 (1) TMI 1091

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....ly proceeded ex parte against him. 2. The Revenue's pleads the following substantive grounds: 3. Learned CIT, DR invited our attention to the CIT(A)'s detailed discussion quashing the impugned assessment as an invalid one as follows: 6. I have considered the assessment order and submissions of the assessee. The Instruction of the CBDT as contained in Instruction No. 5/2016, dt. 14.07.2016 with regard to scope of enquiry under 'Limited Scrutiny' selected through CASS 2015 & 2016 is as under: "Vide Instruction No. 20/2015 dated 29.12.2015 in File of even number, Board has laid down Standard Operating Procedure for handling of cases under 'Limited Scrutiny' which were selected through Computer Ai....

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.... information available on record for forming such view; b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct nexus between the available material and formation of such view. It is further clarified that in cases under 'Limited Scrutiny', the scrutiny assessment proceedings would initially be confined only to issues under 'Limited Scrutiny' and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case to 'Complete Scrutiny' after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in 'Limited Scrutiny'. ....

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....egarding the OD account was collected by the AO from the Bank and the same was in the possession of AO before the case was converted to 'complete scrutiny'. The AO sought approval of Pr. CIT after show cause notice was issued. After obtaining permission, which was accorded by the Pr. CIT on 22.12.2016, no intimation was given to the assessee nor any further show cause notice was given. The assessment was completed by the AO on 31.12.2016. The above action of the AO is not in conformity with Instruction No. 5/2016 of CBDT on the issue. The Instructions issued by the CBDT are binding on the AO and not following the instructions relating to the procedures renders the assessment invalid. In view of the above, it is held that the assessm....

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....2.12.2016 to 31.12.2016 was only a procedural one only which could not be held to have vitiated the entire assessment proceedings as a non-est one as held in the CIT(A)'s order under challenge. We therefore reverse lower appellate findings to this effect and restore the Revenue's sole substantive ground raised in the instant appeal back to the Assessing Officer for his afresh factual verification/adjudication qua all the issues following subject matter of "complete" scrutiny as per law within three effective opportunities of hearing. Ordered accordingly. 6. This Revenue's appeal is allowed for statistical purposes in above terms. Order pronounced in the open court on 17th Jan., 2022. ============= Document 1 i)The Ld.....