TaxTMI 
TaxTMI 
2023 (1) TMI 683
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.... Officer (AO) u/s. 143(3) of the Act on 20-12-2018 for Assessment Year (AY) 2016- 17. The grounds taken by the assessee read as under: 1. For that the order of the Principal Commissioner of Income Tax is without jurisdiction, contrary to law, facts and circumstances of the case and at any rate is opposed to the principles of equity, natural justice and fair play. 2. For that the Principal Commissioner of Income Tax failed to appreciate that there was no error or prejudice much less both to warrant the invocation of the powers conferred u/s.263. 3. For that the provisions of section 263 are not invocable in the facts and circumstances of the case. 4. For that the Principal Commissioner of Income Tax failed....
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....cultural income earned by the assessee which could not have been, otherwise, examined by Ld. AO under 'limited scrutiny'. The Ld. AR filed written submissions which have duly been considered while adjudicating the appeal. In the written submissions, Ld. AR has drawn attention to CBDT Instruction No. F.No.225/402/2018/ITA.II dated 28.11.2018 to support the submission that 'credible material' or 'information' being provided by any law enforcement / intelligence / regularity authority / agency was a pre-condition for going beyond the scope of 'limited scrutiny'. The issues flagged by Ld. Pr. CIT were not within the scope of 'limited scrutiny' before Ld. AO. The phrase 'credible material' has to be read in conjunction with the word 'information....
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.... authority, however, rejecting the same, Ld. Pr. CIT directed Ld. AO to pass appropriate order after considering these issues. Aggrieved as aforesaid, the assessee is in further appeal before us. Our findings and Adjudication 6. The undisputed facts that emerge are that the issues which have been flagged by Ld. Pr. CIT to seek revision could not have been, otherwise, examined by Ld. AO since the case was selected under 'limited scrutiny' to verify the genuineness of capital gains / losses. The issues lagged for 'limited scrutiny' was duly examined and verified by Ld. AO. To examine other issues, Ld. AO was bound by CBDT Instruction No. F.No.225/402/2018/ITA.II dated 28.11.2018 which, inter-alia, provide as under: - Under CASS....
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....with prior administrative approval of the concerned Pr. CIT/CIT. 4. It is pertinent to mention that unlike CASS 2015 and 2016 cycles, where consideration of any additional issue lead to the conversion of case to 'Complete Scrutiny' as laid down in Instruction No. 5/2016 dated 14.07.16, the pending 'Limited Scrutiny' cases of CASS 2017 and 2018 cycles would not be taken up for 'Complete Scrutiny' as the present directive is only to facilitate consideration of those issues wherein specific information of tax-evasion has been furnished by any law-enforcement/intelligence/regulatory authority or agency. Therefore, in such 'Limited Scrutiny' cases, Assessing Officer shall not expand the scope of enquiry/i....
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.... to the extent of the issues referred to by the law-enforcement/intelligence/regulatory authority or agency . 7. It may be brought to the notice of all for necessary compliance. Upon perusal of para-3 of above instructions, it could be seen that the scope of limited scrutiny for CASS cycles 2017 and 2018 could be widened only upon receipt of credible material or information from any law enforcement / intelligence / regulatory authority or agency regarding tax-evasion by an assessee. In such a case, the issues arising from such information could also be examined during the course of conduct of assessment proceedings in such 'limited scrutiny' cases with prior administrative approval of the concerned Pr. CIT/CIT. However, ....
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....not term the assessment order passed by the Assessing Officer as erroneous, insofar as it is prejudicial to the interests of revenue on issues other than the issue taken up by the Assessing Officer in scrutiny assessment proceedings. In this case, on perusal of materials available on record, we find that the learned PCIT has revised assessment order on the issues other than the issue considered by the Assessing Officer in assessment proceedings. Therefore, we are of the considered view that the learned PCIT has exceeded her jurisdiction in examining issues other than the issues which is subject matter of limited scrutiny assessment proceedings before the Assessing Officer. Hence, we are of the considered view that revision order passed by t....