TaxTMI 
TaxTMI 
2024 (6) TMI 1126
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....Section 143(3) of the Act for Assessment Year 2018- 19 has been sought to be revised holding the same erroneous so far it is prejudicial to the interest of revenue. 2. The assessee has raised the following grounds of appeal:- "1. That on the facts and in circumstances of the case the assessment order passed by the Ld. Pr. CIT u/s. 263 of the Act is bad in law in the facts and circumstances of the case and is prejudicial to the interests of the assessee. 2. That the learned PCIT erred in law where he did not invoke the explanation 2 to section 263 of the Act in the show cause notice dated 20.02.2023 but making reference of it while passing order under section 263. 3. That the Principal Commissioner erred in invoking provisions of se....
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....Nerula and others in ITA No. 2190 to 2192/Ahd/2004 dated 17.04.2004 particularly on the observation made therein that the agricultural expenses is 40% of the gross agricultural receipts in Gujarat, Rs.9,50,507/- (i.e. 40% of the gross receipt of Rs.23,76,267/-) same was required to be treated as expenses incurred to on agricultural income as opinion formed by the Ld. PCIT and in that view of the matter Rs.6,72,478/- was required to be treated as undisclosed income from the other sources and needed to be added to the total income of the assessee which has not been done by the Assessing Officer while finalising the assessment under Section 143(3) of the Act. 5. The Ld. PCIT formed an opinion that the assessee has not been able to establish t....
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....efore the assessment order dated 01.02.2021 passed under Section14 3(3) of the Act is erroneous insofar as it is prejudicial to the interest of the Revenue but in the present case the original assessment was passed under Section 143(3) of the Act being under limited scrutiny. In that event the powers of the Ld. PCIT for revision under Section 263 of the Act would be limited to the issues which has been considered in the limited scrutiny assessment only and the revisional powers cannot be allowed to travel beyond the issues considered in such limited scrutiny. In this regard, he has relied upon very many judgements as follows by filing a written notes of submissions:- "That reliance can be placed on decision of Co-ordinate Bench of Chennai....
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....imilar matters, we are of considered opinion that when the AO is bound to follow the CBDT instructions and while following such instruction and after verification of the material furnished by the assessee on the aspect covered by the limited scrutiny, is not open for the Id. Pr. CIT to sau that not adverting to the other aspects of the competition would render the assessment order erroneous and prejudicial to the interest of revenue. With this view of matter, we find that the impugned order cannot be sustained and therefore, the same is liable to be quashed. We accordingly quash the same. That Hon'ble Cuttack bench of this Hon'ble Tribunal in case Shark Mines & Minerals Private Limited rs Pr. CTT (TTAT- Cuttack) reported in (2022....
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...., we find that the order u/s 263 passed by the Id. PCIT dwelled into the issue of re-computation of capital gain which is beyond the mandate of the limited swutiny issued by the CBDT. Hence, the directions of the Id. PCIT which are beyond the selection criteria of scope of scrutiny for the instant year cannot be held to be legally valid." 3.11 Further, apart from the above referred rulings, various benches of this Hon'ble Tribunal has consistently held that when assessment u/s 143(3) of the IT Act has been taken up under limited scrutiny, then while invoking powers u/s 263 of the IT Act PCIT/ CIT cannot look into any other issue which the assessing officer himself could not look i.e. in other words while invoking powers u/s 263 of th....
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....d by the Assessing Officer cannot be said to be erroneous so as to prejudicial to the interest of Revenue. We note that when the Ld. A.O. has exercised its jurisdiction within the boundary of the CBDT circular, verified the issues raised in a limited scrutiny and only upon due application of mind finalised the issue upon making disallowance under Section 57 of the Act, the PCIT cannot exercise the revisional jurisdiction conferred upon him under Section 263 of the Act beyond the issues which were raised and finalised under such limited scrutiny. On this aspect we have considered the judgement passed by different coordinate benches and the higher forums as relied upon by the Ld. A.R. 9. It is a settled principle of law the PCIT cannot exerc....