TaxTMI 
TaxTMI 
2023 (1) TMI 361
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....s order was to be filed before the Tribunal on 23.06.2021 as against the last date for filing of the appeal before the Tribunal is 25.05.2021. Thereby, there is a delay of 29 days. The Ld.Counsel for the assessee stated the period falling under delay is covered by the decision of the Hon'ble Supreme Court in Miscellaneous Application No.665 of 2021 vide order dated 23.03.2020 giving directions that the delay is to be condoned during this period 15.03.2020 to 14.03.2021 and further, they have condoned the delay up to 28.02.2022 in Miscellaneous Application No.21 of 2022 vide order dated 10.01.2022. In term of the directions of the Hon'ble Supreme Court, we condone the delay and admit the appeal. 3. The only issue in this appeal of the assessee is against the revision order passed by the PCIT u/s.263 of the Act, and the first facet of challenge was that whether the PCIT can revise the assessment framed by the AO u/s.143(3) of the Act, when the assessment itself was a limited scrutiny assessment and the issue on which limited scrutiny assessment framed was not before the PCIT or the PCIT can deliberate on any other issue other than the issue dealt by the AO in limited scrutiny asse....
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....penses and the same are not allowable. Accordingly, the PCIT issued show cause notice, but the assessee replied on jurisdiction. The PCIT was not convinced with the reply and noted that the expenses incurred by the assessee are to be disallowed and AO without verification or any inquiry accepted the claim of the assessee and hence, he treated the assessment order framed by AO as erroneous and prejudicial to the interest of the Revenue. Hence, he set aside the assessment order and directed the AO to re-frame the assessment after allowing opportunity of being heard to the assessee by observing in Para Nos.6-8 as under: 6. The reply dated 12.01.2021 filed by the assessee has been carefully examined. The assessee has filed copies of P&L account, Balance Sheet as on 31.03.2009 & 31.03.2010. The contention of the assessee is that the assessee company during FY 2009-30 started trading operations by importing finished products and continued the trading operations for a certain period of time, since when the day to day operational expenses have been treated as revenue expenditure and charged to P & L account. Thereafter as inflow of orders were not, adequate the trading operations ....
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....Counsel for the assessee stated that according to the PCIT, the assessment order is erroneous as well as prejudicial to the interest of the Revenue in terms of his findings given in Para Nos.6-8, which is reproduced above in this order. The Ld.Counsel for the assessee stated that this issue is clearly settled by the co-ordinate Bench of this Tribunal in the following cases: 1) Balvinder Kumar v. PCIT reported in [2021] 187 ITD 454. 2) Rajani Venkata Nagar Annavarapu Narayana v. PCIT in ITA No.1817/Del/2020. 3) Sonali Hemant Bhavaskar v. PCIT in ITA No.742/M/2019. 9. On the other hand, the CIT-DR filed copy of Tribunal order in the case of M/s. Sahayamatha Salterns Pvt. Ltd., in ITA No.1498/Chny/2019 dated 11.12.2019, wherein, the Tribunal has considered exactly identical issue and finally held that the Tribunal has not considered CBDT Instruction No.20/2015 dated 29.12.2015 and as per exceptional sub-clause (d) of Clause-3 of CBDT Instruction, was never considered. The Tribunal considered this issue and held that even in limited scrutiny assessment, there is no bar on the PCIT to revise the assessment order even on any other issue. For this, Tribunal r....
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.... CIT vs. Pushpa Devi, (1987) 164 ITR 639. The relevant para is extracted below. "17. If the rigors of an enquiry and investigation had been relaxed by the scheme of the Board, 'the order of the Tribunal would have been perfectly justified. Let us, therefore, pursue the Scheme. I have quoted earlier the salient aspects of the Scheme. In paragraph 4 it has been specifically stated that 'returns of income filed in the names of minors and ladies should not, however, be accepted without proper enquiries.' What is the content of this sentence. In my view, it clearly means that minors and ladies were not covered by the Scheme. It applied to others and not minors and ladies. They not having formed part of the Scheme, there was no relaxation for them. No spot assessment was to be done in the case of return filed by minors and ladies. They must have been excepted precisely on the ground that unscrupulous assessee might endeavour to lessen the tax burden upon themselves by filing returns in the names of their wives and minor children. I must confess, I have some difficulty in appreciating that if the Scheme did not apply to minors; and ladies, how the rigors of enquiry an....
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....the return in the department as if the scheme did not exist. There is slight distinction on facts between the case of Smt. Rambha Devi (supra) and the case of the present assessee. In the former case the return had been filed on 22-12-1972, the Inspector conducted inquiry on 27-12-1972. Thereafter, assessment was made. Thus, there was at least a gap of five days between filing of the return and the assessment. What difference the gap of five days would have, would be a matter to be considered when the reference in the case of Smt. Rambha Devi (supra) is taken up by this Court. But in the instant case, the return was filed on 14- 12-1972, and the Inspector's enquiry was completed on the same day and the assessment was made on the very same day for all the assessment years except 1973-74 at the spot. Mr. P.D. Mathur distinguished the case of Thalibai F. Jain v. ITO [1975] 101 ITR 1 (Kar.) on the footing that the ITO had made the assessment without enquiry and evidence and in undue haste. The situation in the instant case, is exactly similar. The filing of return, the equiry and assessments were all done on the same day. I am, therefore, firmly of the view that the enquiry, if at ....
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.... else who would have been assessed to a larger amount, an assessment so made can certainly be erroneous and prejudicial to the interest of the revenue. . . . " (p. 328) The case of the Supreme Court in Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 also supports the revenue. The majority view of the Tribunal distinguishes those cases on some misconception''. Therefore, in our considered opinion, the Assessing Officer not following procedure prescribed in Sub Clause (d) of Clause of 3 of said CBDT instruction would render the assessment order erroneous and prejudicial to the interests of the Revenue, thereby confirming the jurisdiction on ld. PCIT u/s.263 of the Act. As regards to the decision of Co-ordinate Bench of the Tribunal in the case of Smt. Padmavathi (supra) to which one of us i.e. the Accountant Member is the author of the order. In the said decision the Tribunal had rendered decision overlooking exceptional clause carved out in Sub Clause (d) of Clause 3 of CBDT Instruction No.20/2015, dated 29.12.2015. Thus, the decision is per incuriam. It is needless to say that an order which is per incuriam has no precedential value. In the circumstances, we are of ....
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....g for the respondent / assessee submitted that the revenue is right in submitting that in the case of Sahayamatha Salterns Private Limited, the Tribunal noted the instruction No. 20/2015 dated 29.12.2015 and decided the matter against the assessee. However, the assessee has filed an appeal before this Court in TCA.No.350 of 2020 TCA No.158 of 2020 and the appeal has been admitted to consider the substantial question of law, which has been framed almost on similar lines, as substantial question of law no.3 above. 13. We note that the Tribunal did not consider the effect of instruction no.20/2015, which had been considered in the case of Sahayamatha Salterns Private Limited, which issue is now pending before the Division Bench of this Court by way of a Tax Case Appeal, therefore, we are of the view that the Revenue can agitate the said question in the said tax case appeal and it would suffice to vacate the observations made by the Tribunal in the impugned order to the extent with regard to the scope of 'limited scrutiny assessments'. 14. Accordingly, that portion of the order and observations made in paragraph no.7 of the impugned order are set aside and the....
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....e is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in 'Limited Scrutiny' or 'Complete Scrutiny' through notices issued under section 143(2) of the Income-tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: a. In 'Limited Scrutiny' cases, the reasons/issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under section 142(1) of the Act in 'Limited Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny. Further, the scope of enquiry shall be restricted to the 'Limited Scrutiny' issues. c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for 'Complete Sc....
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.... Officer while issuing notice under section 142(1) of the Act which is enclosed with the first questionnaire would proceed to verify only the specific aspects requiring examination/verification. In such cases, all efforts would be made to ensure that assessment proceedings are completed expeditiously in minimum possible number of hearings without unnecessarily dragging the case till the time-barring date. CBDT Instruction No. 5/2016 "4. 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 comers ion 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'. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting 'Complete Scrutiny1 in such cases." CBDT Letter dated 30-11-2017 J Instances have come to notice of CBDT where some Assessing Officers are travelling beyond their j....
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....ly states that questionnaire issued u/s.142(1) of the Act, in a limited scrutiny case, shall remain confine only to the specific reasons/issues for which case has been picked up for scrutiny. Further, the scope of enquiry shall be restricted to the limited scrutiny issues. Sub clause (d) of Clause-3 further reads the expansion of the scope of limited scrutiny and there are certain conditionality. The conditionalities are that during the course of assessment proceedings, in a limited scrutiny case, if it comes to notice to the AO that there is a potential escapement of income exceeding Rs.5 lakhs for normal CIT charge and for metro CIT charge, monetary limit shall be Rs.10 lakhs requiring substantial verification on any other issue, then the case may be taken up for complete scrutiny with the prior approval of the PCIT/CCIT concerned. The another condition put forth by the CBDT is that such approval thereof accorded by the PCIT in writing after being satisfied about imports of the issues necessitating complete scrutiny in that particular case. Further condition that such cases shall be monitored by the Range Head and procedure indicated in Sub-clauses (a) (b) (c) above no longer be ....