TaxTMI 
TaxTMI 
2022 (5) TMI 613
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....by 27.01.2021 (PB pgs. 3-9). There is in fact no reference to the said notice at para 5 of the impugned order which enlists the dates of the various notices of hearing to the assessee during the appellate proceedings. The assessee's reply, though admittedly submitted beyond the due date specified in the said notice (27.1.2021), he would continue, the same would be of no moment in view of the subsequent notices of hearing dated 20.8.2021 and 24.9.2021. He, however, conceded to the assessee not responding to these notices as well as the first notice dated 08.01.2021. The matter, he concluded, be restored to the file of the first appellate authority for a decision on merits; its adjudication being sans the consideration of the assessee's said reply. Discussion/Findings 3.1 There is, thus, admittedly no response by the assessee to 3 out of the 4 notices of hearing issued to it by the first appellate authority. What, though, is more surprising is that having made its' submissions on 17.2.2021, all that the assessee was required to do, in response to the subsequent notices, was to draw attention to the same, so that the same was considered, and any further explanation or query, if ....
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....as the same may, agreeably, be not to the satisfaction of the assessee, who still continues to be aggrieved and hold reason to agitate the said ground, the same would obtain on merits rather than the stated non-consideration. 3.4 Grounds 4 to 7 (and not Ground 4 to 6 as wrongly stated) stand considered per para 9 of the impugned order. It is therefore wholly incorrect to say that the same does not consider its' case, which is, again, the same as before the AO. The only addition, admittedly made by the assessee per its' written submissions during the first appellate proceedings, is the tabulation of 'other expenses' for the preceding three years, which are stated to have been 'accepted' in the past, so there was no reason for disallowance thereof for the current year. The argument is misconceived on the very face of it. There has been admittedly (by Shri Mishra during hearing) been no assessment u/s. 143(3) (or even u/s. 144) for any of the said three years, so that there is no question of any 'acceptance' of the assessee's claim by the Revenue. Even otherwise, each year is an independent unit of the assessment, and the principle of res judicata is not applicable to the proceedin....
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....AO in the matter of assessment is plenary, and cannot be interfered with by any income tax authority, including CBDT (Board). It is only where the AO considers it necessary and expedient to issue a notice u/s. 143(2) with a view to ensure that income has not been understated, etc., that he may do so, and the Board formulating a scheme (as CASS), whereby a particular return/case, as of the assessee, is required to be subject to the verification procedure under the Act by issue of notice u/s. 143(2), is not contemplated by law. Shri Mishra would, to buttress his point, take the Bench through a series of decisions, reading out relevant parts thereof, viz. CIT v. Bal Krishna Malhotra [1971] 81 ITR 759 (SC); Om Trading Company & Ors. v. ITO [1991] 188 ITR 641 (Kar); CIT v. Nayana P. Dadhia [2004] 270 ITR 572 (AP); Janta Metal Works v. ITO [1990] 186 ITR 458 (All); Harbans Kaur v. ITO [1993] 204 ITR 685 (P&H); and Gujarat Gas Ltd. v. Jt. CIT [2000] 245 ITR 84 (Guj). 4.2 Shri Halder, the ld. Sr. DR, would, on the other hand, plead that none of the cited decisions is applicable inasmuch as formulating a criteria, based on relevant filters as identified by the Board for selecting cases f....
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....ey) is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey, such cases will not be covered by this exclusion. (iii) Assessments in search and seizure cases to be made under section(s) 158B, 158BC, 158BD, 153A & 153C read with section 143(3) of the Act and also for the returns filed for the assessment year relevant to the previous year in 1/2 which authorization for search and seizure was executed u/s 132 or 132A of the Act. (iv) Return filed in response to notice under section 148 of the Act. (v) Cases where registration u/s 12AA of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. However, where such orders of the CIT/DIT have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause. (vi) Cases of entities, being 'scientific research association' or 'university, college or other institution', having approval under section(s) 35(1)(ii)/35(1)(iii) of the Act. (vii) Cases in respect of which specific ....
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....ncial year. In this regard, by 31st January, 2017, such authorities shall send a report to the respective Zonal Member with a copy to Member (IT) containing details of at least 25 quality assessment orders from their respective charges. It may further be the endeavour that cases selected for publication in 'Let us Share' are picked up only from the quality assessments as reported. 5. These instructions may be brought to the notice of all concerned for necessary compliance. 6. Hindi version to follow. (Rohit Garg) Deputy-Secretary to the Government of India 5.2 The question posed, as I see it, has two aspects to it. One, that the Board Instruction 04/2016, dated 13/7/2016, to the extent it advocates or furnishes guidelines under CASS 16 for selection of scrutiny of tax returns, is ultra vires the Constitution of India inasmuch as it usurps the power reserved under the Act for an assessing authority thereunder. I have re-phrased the question thus as inasmuch as the AO has, in issuing notice u/s. 143(2), which is under challenge, acted in accordance with the directions issued u/s. 119 of the Act, binding on him, his action can be faulted with onl....
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....ere with the discretion of the Commissioner (Appeals) in the exercise of his appellate functions." (emphasis, added) The words 'in a particular manner' qualify not only the words 'dispose of a particular case' but also the words 'making a particular assessment', preceding the same. The ld. counsel is, I am afraid to say, reading a comma (,) after the word 'assessment', where none exists. Now, it is nobody's case, nor could possibly be, that selecting a particular case, based on certain broad parameters, viz. investment in real estate; cash deposited in bank (above certain monetary limits), etc., the Board is requiring the assessing authority to make an assessment in a particular manner. It is only, for the efficient management of the Act, facilitating the selection of a return for scrutiny. Nothing more and, nothing less. 5.3 None of the decisions cited is on the point or in any manner contradicts or repudiates what stands stated here-in-above, which conforms to the well-established law, with, rather, and on the contrary, to the extent in relation to the Board Circular/Instruction, actually supportive of the same. The decisions listed at para 4.1 of th....
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....ssessee, it is claimed, raised an objection with the AO vide his letter dated 27/10/2017 (PB-1, pg. 43). The same stands not accepted by the AO vide his communication dated 27/10/2017, on the ground that the notice u/s. 143(2) had been issued (on 02/8/2016) on the basis of the address stated in his PAN as well as the tax returns (PB-1, pg.58). The assessee's Gd. 1, before the ld. CIT(A), not pressed in the appellate proceedings (refer written submissions (WS) dated 17/02/2021 before him), is untenable for more than one reason. The objection is invalid as, firstly, the notice u/s. 143(2) is validly issued on the basis of the address mentioned in PAN (refer: Pr. CIT v. I-Ven Interactive Ltd. [2019] 418 ITR 662 (SC)), change in which, where so, is required to be intimated by it u/s. 139A of the Act. In fact, the objection itself can be raised only within 30 days of the service of notice u/s. 143(2), i.e., by 01/9/2016 (section 124(3)). Thirdly, the resolution of the matter in case the assessee is not satisfied with the AO's disposal of his objection, timely raised, is through the administrative channel, and not through the appellate procedure, law on which is again well-settled (s.124....
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..... 399.13 lacs - rs. 353.13 lacs), accepting the assessee's plea that the same was in fact a direct (trading) expenditure, though had been wrongly claimed as OE in its' return, to verify which (OE) only the same was selected for verification under the limited scrutiny procedure. Carrying the argument further, Shri Mishra would contend that the assessee's plea, which found acceptance with the AO, was in fact made for and applicable to other direct (trading) expenditure, similarly reported under OE, viz. Composing expenses (rs. 45,165), Ink Expenses (Rs. 35,73,519) and Plate consumption (Rs. 2,24,650), as well, for which he would take the Bench through Trading Account (at PB- 1, pgs. 5-6). The scope of the limited scrutiny could be, as per the Board Instruction, extended by the AO only upon seeking approval for the same from the competent authority (PB-1, pgs. 39, 54), and which has not been. I cannot agree more with the assessee. The expenditure, for an aggregate of Rs. 38,43,334 afore-noted, also qualifies as direct trading expenditure, and ought to have, like-wise, i.e., as that on paper consumption, excluded from the purview of the limited scrutiny, as the assessee's return was se....