TaxTMI 
TaxTMI 
2022 (8) TMI 254
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....ed 25.01.2018, was issued to the assessee. Thereafter, after taking into consideration, the submissions so filed by the assessee, the assessment order passed u/s. 143(3) of the Act was set aside and the AO was directed to re-assess or re-compute the income of the assessee by conducting further enquiries as necessitated and after affording reasonable opportunity to the assessee. Against the said order and findings of the ld. Pr. CIT, the assessee is in appeal before us. 3. During the course of hearing, the ld. AR submitted that the case of the assessee was initially selected for limited scrutiny under CASS for verification of introduction of capital during the year under consideration and during the course of assessment proceedings, the AO carried out necessary verification and has given a finding that there was no such introduction of capital during the year under consideration. In this regard, our reference was drawn to the office note forming part of the assessment order passed u/s. 143(3) of the Act, dated 28.10.2015, which was placed at Page No. 103 of the assessee's paper book. It was submitted that where the case was selected for limited scrutiny, the ld. Pr. CIT while e....
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.... the CBDT Instruction No. 20/2015, he has negated the said contention raised by the assessee during the revision proceedings. 5. We have heard the rival contentions and perused the material available on record. It is an undisputed fact that the case of the assessee was selected for limited scrutiny to verify the introduction of capital during the year under consideration and the AO has taken due note of the same and has given a specific finding after verification of record that since there is no fresh capital introduced during the year, the issue for which the matter was selected for limited scrutiny does not exists and no adverse view can be taken, therefore, taking into consideration the submissions of the assessee, the assessment proceedings were completed. 6. Further, in the show cause notice issued by the ld. Pr. CIT, it is noted that he has raised issues relating to non-reporting of contract receipts from M/s. SGVN Ltd. and secondly, regarding discrepancy in the sundry creditors accounts as shown in the balance sheet dated 31.03.2013, the sundry creditors shown in the preceding assessment year and the purchases made during the year under consideration. Further, besides thes....
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....atter was selected for limited scrutiny. 17. There is no dispute that scope of enquiry in case of limited scrutiny is only to the extent of the issues for which case was selected for scrutiny under CASS. The CBDT has issued instructions from time to time in this respect and has specifically instructed the taxing authorities that scope of enquiry should be limited to verification of all the particulars for which limited scrutiny was taken up under CASS. However, in case during the assessment proceeding if the AO is of the view that substantial verification of other issue is also required then the case may be taken up for comprehensive scrutiny with the approval of the Pr. CIT/DIT concerned. It is also instructed that such an approval shall be accorded by the Pr. CIT/DIT in writing after being satisfied about the merits of the issue(s) necessitating wider and detailed scrutiny in the case. In the latest Instruction No. 5/2016 dated 14-07-2016, CBDT has again instructed the taxing authorities in para 2 to 4 as under:- "2. In order to ensure that maximum objectivity is maintained in converting a case falling under 'Limited Scrutiny' into a 'Complete Scrutiny' case, ....
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....lly vested with the A.O while framing the assessment as also held consistently by various Benches of the Tribunal as referred supra. 19. A contention which has been raised by the ld. CIT/DR is that where there is a potential escapement of income, the AO is required to convert the limited scrutiny case into a comprehensive scrutiny case after taking the prior approval of ld. PCIT and if the AO does not get the limited scrutiny case converted to comprehensive scrutiny case even though there are material on record, the assessment order becomes erroneous as it is prejudicial to the interest of Revenue and provisions of section 263 of the Act are applicable. For the purposes of converting limited scrutiny to complete scrutiny, what is relevant is that there must be some credible material or information on face of the record and basis review thereof during the assessment proceedings, the AO is required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny' and after seeking approval from the competent authority, the case can be converted into complete scrutiny and that too, during the currency of a....
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.... the letter clearly establish that it's not open for the learned Assessing Officer to travel beyond the reason for selection of the matter for limited scrutiny and on that aspect the assessment order in this case is in accordance with the instructions governing the field. In such circumstances it has to be seen whether the Ld. PCIT is justified in holding the assessment order to be erroneous insofar as it is prejudicial to the interest of the Revenue for the learned Assessing Officer not considering the aspects which are beyond the purview of limited scrutiny. 10. In the Deccan Paper Mills Co. Ltd. vs. CIT in ITA 1013 AND 1635/PUN/2015, Pune Bench of the Tribunal held, that, "40. Now, coming to the aspect of book profits which was considered by the Commissioner and the order of the Assessing Officer was held to be erroneous and prejudicial to the interest of revenue. In this regard, it may be pointed out that the case of assessee was picked up for scrutiny under CASS for the limited purpose of verifying the Chapter VI-A deduction. Once the case is picked up for specific purpose under CASS, then it is outside the purview of the Assessing Officer to look into any other aspect....
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....evenue. With this view of the matter we find that the impugned order cannot be sustained and, therefore, the same is liable to be quashed. We accordingly quash the same." 9. Similarly, the Co-ordinate Chennai Benches, in case of Smt. Padmavathi v. ITO, Tirunelveli (supra) has held as under: "....7. We heard the rival submissions and perused the material on record. The only issue in the present appeal relates to the validity of the revision order passed by the ld. PCIT, u/s. 263 of the Act. Admittedly, the assessment was taken up under limited scrutiny in order to verify the source for purchase of property to the tune of Rs. 77,19,000/-. After considering the materials placed before him, the Assessing Officer had completed the assessment after making addition of Rs. 3,00,000/- treating the gift received from his brother as unexplained cash credit. But it appears that the Assessing Officer had looked into issue of source only to the extent of Rs. 41,50,000/- which is apparent consideration paid for the purchase of property. The value adopted for stamp duty purpose is taken as deemed consideration u/s. 56(2)(vii) (b) of the Act and this is only deemed provision and there is no occa....