AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 535
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..../s 250 of the Income Tax Act, 1961 (the Act). 2. Brief facts of the case are that assessee is a private limited company engaged in the business of infrastructure development. The return of income was e-filed on 23.09.2015 declaring loss of Rs. 3,92,92,800/-. The assessment was taken up for limited scrutiny by way of issue of notice u/s 143(2) of the Act. The assessment was completed vide order dt. 30.12.2017 passed u/s 143(3) at a total income of Rs. 2,03,48,692/- by making additions of Rs. 49,28,702/- u/s 14A and further disallow the short term loss of Rs. 5,46,97,033/- incurred on share warrants. In first appeal, vide impugned order dt. 12.09.2024, ld. CIT(A) has dismissed the appeal of the assessee. Aggrieved from the said order of ld....
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..... The ld. AR submits that the additional grounds of appeal now raised are purely legal grounds and goes to the root of the matter thus the same may be admitted and adjudicated first. He placed reliance on the decision of Hon'ble Supreme court in the case of NTPC Ltd. reported in 229 ITR 383 (SC) and also on the judgement of Hon'ble Bombay high court in the case of CWT Vs. N.A. Narielwalla (1980) 126 ITR 344 (Bom.). 5. After considering the submission and looking to the nature of additional grounds of appeal raised by the assessee, we find that in these grounds of appeal, the assessee has challenged the scope of limited scrutiny vis-à-vis additions made beyond the reasons for limited scrutiny which issue is purely legal and require....
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....me placed in paper book page 2. He thus argued that assessee has not claimed any large expenses in the return of income filed and the major amount of Rs. 5,46,97,033/- being loss on share warrants was already included in the total income therefore, their remained no issue specified under the reason for limited scrutiny. According to ld. AR the issue of 14A is not at all referred in limited scrutiny but was also considered and additions was made, therefore, the entire addition made by the A.O. and which was sustained by the CIT(A) requires to be set aside. He prayed accordingly. 7. Per contra, the Ld. DR has relied on the order of the lower authorities and submitted that Ld. CIT(A) has dealt with every issue in detailed thus the same requ....
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.... the reason of limited scrutiny. Further the quantum and nature of remaining expenses suggest that they were neither large in amount nor were incurred to earn exempt income thus the AO has no power to examine these expenses under limited scrutiny since it is beyond the scope of reason for limited scrutiny. 9. The assessment of the assessee company was selected for limited scrutiny for the reasons mentioned above. When the assessee itself has disallowed the large expenses claimed in the shape of loss on share warrants and added back to the total income computed under the head "Income from Business or Profession" the scope of the AO in limited scrutiny ends. The action of the AO in invoking the provision of section 14A for other expense cl....
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....urther, the scope of enquiry shall be restricted to the 'Limited Scrutiny ' issues. c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in ' Limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for 'Complete Scrutiny ' with the approval of the Pr. CIT/CIT concerned. However, such an approval shall be accorded by the by the Pr. CIT/CIT in writing after being satisfied about me....