2022 (12) TMI 1521

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....rounds of appeal:- "1. The order passed by the Ld. CIT(A) is against the law, equity and justice. 2. The Ld.CIT(A) has erred in law & facts in upholding disallowance of commission of Rs. 6,36,492/- made by Ld. A.O. 3. The Ld.CIT(A) has erred in law & facts in upholding disallowance of purchases of Rs. 1,40,767/- made by Ld. A.O. invoking Sec. 40A (2)(b) of the Act. 4. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal." 3. The assessee has also taken the following additional Grounds of Appeal: "(1) The order passed by Ld AO is bad, illegal and without jurisdiction as the Ld AO has made additions which were not covered under scope of Limited Scrutiny assessment." 4. At the....

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..../s 143(2) of the Act dated 28-07-2016 shows that the case was opened for "limited scrutiny" for examination of the following issues: i) interest expenses ii) payment to related persons mismatch 4.2 However, the assessment order was passed on a totally different basis as compared to the reasons enumerated in the notice issued under section 143(2) of the Act, without converting the case into "full scrutiny". The counsel for the assessee drew our attention to the assessment order and submitted that the first addition was made on account of disallowance of interest under section 14A of the Act, whereas in the notice referred to above, there was no mention of the same. Further, so far as addition under section 40A(2)(b) is concerned, the AO....

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....of the Act. The DR also argued that this issue was never raised before the Ld. CIT(Appeals) in appellate proceedings and neither any objection was raised before the AO and hence the assessee is precluded from taking up this issue for the first time in appellate proceedings. 6. We have heard the rival contentions and perused the material on record. In our considered view, the additional ground of appeal which is being pressed for the first time before us, is a purely legal issue and the assessee can be permitted to press any legal issue which goes to the root of the matter or challenge legality of the jurisdiction of the assessment itself, at the appellate stage before us as well. Now on the issue whether, in the instant set of facts, it ca....