TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 705
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....sought admission of the said ground in terms of Rule 11 of Income-Tax(Appellate Tribunal) Rules, 1963: "That under the facts and circumstances of the case, the Ld. A.O erred in examining on issue which was beyond the scope of limited scrutiny initiated vide notice dated 31.08.2017, rendering the assessment proceedings null, void and without jurisdiction." 3. The learned Departmental Representative strongly objected to the admission of the additional grounds. 4. Having considered rival submissions on the issue of admission of additional ground, we are of the view that the issue raised in the additional ground is purely a legal and jurisdictional issue going to the root of the matter. Since, the additional ground raised will have a crucia....
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....the additional ground, the issue arising for consideration is whether the assessing officer could have enlarged the scope of limited scrutiny for which the assessment in assessee's case was selected. 6. Briefly, the facts are that the assessee is a non-resident corporate entity incorporated in Singapore and is a tax resident of Singapore. As observed by the assessing officer, the assessee is engaged in the business of procurement of goods and services for various affiliates of Danone group, infant nutrition, medical nutrition etc. As observed by the assessing officer, assessee's case for the impugned assessment was selected for limited scrutiny under CAAS parameters to evaluate/verify the following: "1. Whether value of international tra....
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....that the training charges of Rs.16,20,992 received by the assessee, being in the nature of Fee for Technical Services (FTS) is taxable in India. While coming to such conclusion, the assessing officer observed that the fee for training services will also come within the ambit of FTS as defined under Article 12 of the India-Singapore Double Taxation Avoidance Agreement (DTAA). 9. In this context, the assessing officer observed that assessee had changed his position as earlier the assessee stated that these revenues were actual reimbursement for IT support services, whereas, afterwards the assessee stated that these are for recovery of training program cost. Be that as it may, the assessing officer added back the amount of Rs.16,20,992 at the....
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....t the assessing officer while seeking conversion of limited scrutiny to complete scrutiny shall require to form a reasonable view that there is possibility of under assessment of income. Therefore, only after conversion of limited scrutiny to complete scrutiny, the assessing officer can examine the additional issues besides the issue involved in limited scrutiny. Further, referring to letter dated 30th November, 2017 issued by DGIT(Vigilance), he submitted that the letter made it clear that the assessing officer should abide by the instructions of the CBDT while completing limited scrutiny assessment and should be scrupulous about maintenance of note sheets in assessment folders. He submitted, by giving a complete go by to the CBDT instruct....
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....cannot avail the defense of violation of limited scrutiny by the assessing officer, as, any such violation has to be dealt with departmentally. Thus, she submitted, the additional ground raised should be dismissed. 13. We have considered rival submissions in the light of decisions relied upon and perused the material on record. 14. Undisputedly, assessee's case was selected for limited scrutiny to examine whether value of international transactions in respect of mutual agreement or arrangement have been correctly shown in Form 3CEB. In other words, the scrutiny was only for the purpose of verifying whether the international transactions with the related parties have been correctly declared by the assessee in the audit report. It is a fact....
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....d have ended there. However, the Assessing Officer exceeding his jurisdiction has ventured into recheracterizing the nature and character of a particular item of income, which in our view, is beyond the scope of limited scrutiny. This is so because, in terms of CBDT Instruction nos. 20/2015 and 5/2016 read with DGIT(Vigilance) letter dated 30th November, 2017 before venturing into other issues outside the scope of limited scrutiny, the Assessing Officer should have taken prior approval of PCIT/CIT. 16. Admittedly, in the facts of the present appeal, the assessing officer has not taken any such approval of the concerned authorities. Therefore, the assessment order passed is in violation of CBDT Instructions, referred to above. Therefore, th....