AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 55
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.... same, the AR of the assessee appeared before the Assessing Officer from time to time and filed the requisite details and thereafter the Assessing Officer completed the assessment u/s 143(3) on 29.12.2017 determining the total income of the assessee at Rs.2,58,54,170/- wherein he made (a) addition of Rs.3,32,680/- on account of disallowance of travels and tours expenditure; (b) disallowance of Rs.6,03,320/- on account of vehicle hire charges being 10% of the total traveling and tour expenditure and (c) Rs.19,43,388/- on account of disallowance of site and other expenses. 3. Subsequently, the learned PCIT called for the record and on examination and verification of the same, he noted that the assessee had admitted interest income of Rs.10,33,764/- whereas as per Form No.26AS the assessee was in receipt of Rs.20,45,315/- as interest income. Thus, there is short admission of interest income to the extent of Rs.10,11,551/- in the return. However, the Assessing Officer passed the assessment order without examining the issue and without making any inquiry about the correct interest income earned by the assessee. He, therefore, was of the opinion that the order passed by the Assessing Of....
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....nt view taken by the PCIT. So far as the argument that 26AS cannot be treated as part of the books of account is concerned, he noted that this being an information on record and since the interest declared by the assessee is substantially differing from the interest as appearing in 26AS, it becomes the bounden duty of the Assessing Officer to examine the reasons for the difference and come to a proper conclusion which the Assessing Officer failed to do. In view of the above, the learned PCIT/CIT held that the order passed by the Assessing Officer has become erroneous and prejudicial to the interest of the Revenue as envisaged in section 263 of the I.T. Act. He, therefore, set aside the assessment order passed by the Assessing Officer with a direction to redo the same after necessary verification. 4.1 Aggrieved with such order of the learned PCIT/CIT, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: "1. The Revisionary Order passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act) dated 19.03.2020 by the Pr. CIT(Central) is erroneous both on facts and in law to the extent the order is prejudicial to the interest....
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....8) 229 ITR 383 (S.C). 12. The learned Pr.CIT ought to have considered the basic fact that the order sought to be revised was framed on non-existent entity and consequently revisionary proceeding shall be void ab-initio. 13. The learned Pr. CIT erred in not appreciating the fact that the order sought to be revised was selected under limited scrutiny, thereby the order passed u/s 263 is not as per law. 14. The appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal". 6. The learned Counsel for the assessee referring to the decision of the Hon'ble Supreme Court in the case of National Thermal Power Corporation Ltd vs. CIT (1998) 229 ITR 383 (S.C) submitted that the additional grounds being purely in legal nature and since all facts are already on record, the additional grounds should be admitted for adjudication. 7. After hearing both the sides and considering the fact that all material facts necessary for the adjudication of the additional grounds, which are purely legal in nature are available on record, therefore, relying on the decision of th....
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.... 9. The learned Counsel for the assessee in his yet another plank of arguments submitted that since the amount received are offered for taxation in the succeeding A.Ys, therefore, there is no loss of revenue to the Department and therefore, on this count also, the order passed by the learned PCIT/CIT u/s 263 cannot be sustained. For the above proposition, he relied on the decision of the Delhi Bench of the Tribunal in the case of Income Tax Officer vs. Paragaon XT in ITA No.363/Del/2015 order dated 14.3.2019 for the A.Y 2010-11. He accordingly submitted that the order passed by the learned PCIT u/s 263 of the I.T. Act should be set aside and the grounds raised by the assessee should be allowed. 10. The learned DR, on the other hand, strongly relied on the order of the learned PCIT/CIT. He submitted that where there is a huge difference between the interest income shown by the assessee and interest income as reflected in Form 26AS, the Assessing Officer was duty bound to look into the same and pass appropriate order after calling for details from the assessee. However, in the instant case, the Assessing Officer has neither raised any query nor the assessee has given any details to ....
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....ve heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Admittedly, the case of the assessee was selected for limited scrutiny under CASS for the reason viz. "large investment in property (AIR) as compared to total income". Insofar the fact that the case of the assessee was selected for limited scrutiny for the aforesaid reason is concerned, the same as observed by us hereinabove is not disputed and is clearly discernible from the order passed by the Pr. CIT under Sec. 263 of the Act. We find that as per the CBDT guidelines/instructions bearing F. No. 225/26/2006, ITAII( Pt.), dated 08.09.2010, scrutiny of cases selected on the basis of information received through AIR returns would be limited only to aspects of the information so received. In order to appreciate the issue under consideration, we deem it fit to cull out the CBDT instruction, dated 08.09.2010, which reads as under: " F.No.225/26/2006-ITA.II (Pt.) Government of India, Ministry of Finance Department of Revenue Central Board of Direct Taxes, New Delhi, dated the 8th ....
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....ed only to the aspects of the information received through AIR. However, the case may thereafter be taken up for wider scrutiny with the approval of the administrative commissioner, where it is felt that apart from the AIR information there is potential escapement of income of more than Rs.10,00,000/. Accordingly, the CBDT had in clear and unequivocal terms clarified that for broadening the scope of a case selected for limited scrutiny as per AIR information, the approval of the administrative commissioner would be required. In the case of before us, it is an admitted fact that the case of the assessee was selected for "limited scrutiny" for the reason viz. "large investment in property (AIR) as compared to total income". In fact, itis neither a fact nor the case of the revenue that the said case was thereafter taken up for wider scrutiny with the approval of the administrative commissioner. In the backdrop of the aforesaid facts, we are of the considered view that as the scope of the assessment framed by the A.O under Sec.143(3), dated 10.10.2016 was circumscribed by the limited reason for which the case of the assessee was selected for scrutiny assessment, therefore, he was absol....
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....of his revisional jurisdiction u/s 263 cannot be permitted to traverse beyond the jurisdiction that was vested with the A.O while framing the assessment. To sum up, revisional jurisdiction cannot be exercised for broadening the scope of jurisdiction that was vested with the A.O while framing the assessment. As a matter of fact, what cannot be done directly cannot be done indirectly. Accordingly, in terms of our aforesaid observations, we are of the considered view that as the A.O had aptly confined himself to the issue for which the case of the assessee was selected for limited scrutiny, therefore, no infirmity can be attributed to his order, for the reason, that he had failed to dwell upon certain other issues which were clearly beyond the realm of the reason for which the case of the assessee was selected for limited scrutiny as per the AIR information. We thus not being able to concur with the view taken by the Pr. CIT that the order passed by the A.O under Sec. 143(3), dated 10.10.2016is erroneous, therefore, set aside his order and restore the order passed by the A.O. As we have quashed the order passed by the Pr. CIT under Sec. 263 on the ground of invalid assumption of juris....
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....alling 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) .... (b) The Questionnaire under section 142(1) of the Act in 1Limited Scrutiny * cases shallre nut in 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. 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 ITA No. 485/Del/2020 Balvinder Kumar '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 Scrutiny' in s....
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....ed by the Assessing Officer, the Commissioner has erred in holding the order of the Assessing Officer to be erroneous and prejudicial to the interest of revenue in this regard. Accordingly, we reverse the findings of the Commissioner. ITA No. 485/Del/2020 Balvinder Kumar Accordingly, we hold that the order passed by the Commissioner under section 263 of the Act is invalid and the same is quashed for both the assessment years." In M/s R.H. Property vs. PCIT, ITA No. 1906/Mum/2019 it was held that,- "As a matter of fact, what cannot be done directly cannot be done indirectly. Accordingly, in terms of our aforesaid observations, we are of the considered view that as the A. O had aptly confined himself to the issue for which the case of the assessee was selected for limited scrutiny, therefore, no infirmity can be attributed to his order for the reason. that he had failed to dwell upon certain other issues which were clearly beyond the realm of the reason for which the case of the assessee was selected for limited scrutiny as per the AIR information. We thus not being able to concur with the view taken by the Jr. CIT that the order passed by the A.O under Sec. 143(3), dated 10....