TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1129
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....e before us therefore we are inclined to adjudicate the same before deciding the revenue's appeal. The grounds taken in the cross objections are as under: "1.That the ld CIT(Appeals) erred in not adjudicating the additional ground taken by the appellant LLP. 2.That the case of the assesse was selected for limited scrutiny but the assessing officer made addition beyond the scope of limited scrutiny without taking approval of the competent authority and therefore the ld CIT(A) should have quashed those addition made beyond the scope of limited scrutiny." 3. Facts in brief are that the assessee came into being after Citywings Dealers Pvt. Ltd. was converted into the assessee LLP and filed its return of income on 08.09.2015 declaring a loss of Rs. 8,824/-. The case of the assessee was selected for scrutiny for examining the following issues namely i) investment in unlisted equities, ii) low income and high loans/advance/investment and iii) low income and high investments. The said company issued shares to 23 private limited companies and share allotted at face value of Rs. 10/- each at a premium of Rs. 90/-. The said company continued on 8.11.2015. The LLP was formed with two sh....
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..... The Ld. Counsel for the assessee submitted before us that the scope of limited scrutiny is confined to the issues raised in the notice issued u/s 143(2) and the AO could not have travelled beyond the issues as mentioned in the impugned notice. The Ld. Counsel for the assessee by referring to the notice issued u/s 143(2) of the Act tried to prove his case that the AO has travelled beyond his jurisdiction to examine an issue which was not appearing /figuring in the notice issued u/s 143(2) of the Act. The case was selected for three specific issues for their examination and verification and the AO has exceeded his jurisdiction by examining and making the addition of Rs. 8,55,00,000/- which is not the mandate under the Act and is impermissible. In defense of its arguments the Ld. A.R relied on the decision of Co-ordinate Bench of ITAT, Kolkata in the case of ITO vs. M/s Dhanterash Financial Advisory LLP in ITA No. 2308/Kol/2018 for AY 2015-16 dated 27.11.2020. The ld AR also referred to the decision of the coordinate bench in the case of ITO Vs. M/S Godhuli Dealcom LLP ITA No. 2307/Kol/2018 & CO No. 16/Kol/2021 dated 28.06.2022, wherein under similar facts the coordinate bench has t....
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....sessee, the heading itself mentions as "notice u/s 143(2) of the Income Tax Act, 1961 limited scrutiny". The issue for which the limited scrutiny were to be done are the following: "i. Interest expenses ii. Low income and high loans / advances / investments." 7. That, therefore, the AO should have restricted his jurisdiction while making the assessment order under 143(3) of the Act in respect to these areas only. This is so because the assessee after receiving the notice under 143(2) of the Act was ready for his defence in respect of those issues which appeared therein and not with regard to any other issues. That as a matter of principle of natural justice, the assessee has always the right to know the exact charge or the areas in which he is proceeded against by the department so that, the assessee is ready with his defence. In this case, however in the assessment order, that the Assessing Officer has made additions on grounds of share premium reserve, salary cost, rent paid cost which were not at all the subject-matter of 143(2) notice issued to the assessee. In this legal back ground, Kolkata Tribunal in ITA No. 1361/Kol/2016 for A.Y. 2011-12 in the case of Sanjeev Kr.....
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.... 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 the sec. 263 revision proceedings ought not to have been set into motion for expanding the jurisdiction of the Asses....
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....ramed u/s 143(3) of the Act and he cannot travel beyond such scope of limited scrutiny. That if he intends to expand the scope in that case he had to take appropriate permissions from the concerned superior authority. In the instant case before us, there is no whisper of any permission taken from higher authorities of the department by the AO nor the ld. DR could place any evidence on record neither could demonstrate from assessment order that such permission was taken. Considering these facts of the case and the legal principles enshrined in the aforesaid judicial decisions, we are of the considered view that the assessment order passed u/s 143(3) of the Act is bad in law and liable to be quashed as void ab initio, we order accordingly. 10. That when the assessment order framed u/s 143(3) of the Act itself is quashed as void ab initio the question of any additions raised therefrom does not arise. In such scenario the order of the Ld. CIT(A) becomes academic in nature. The grounds raised by the Revenue in appeal before us from such order of the Ld. CIT(A) are thus dismissed. 11. In the result, the appeal of the Revenue is dismissed." We also note that in the subsequent deci....