| The Tax Publishers2020 TaxPub(DT) 2664 (Gau-Trib) INCOME TAX ACT, 1961
Section 143(3)
AO was not justified in making addition on issues other than issue for which assessment was selected for limited Scrutiny without taking approval in writing from Principal Commissioner/Commissioner. Thus, AO without following procedure expanded his jurisdiction without approval and his action was without jurisdiction, making consequent additions null in eyes of law.
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Assessment - Expansion of scrutiny from the 'limited scrutiny' to 'complete scrutiny' - Prior approval of Principal Commissioner/Commissioner not taken by AO -
Assessee contended that addition of Rs. 59,19,909, made by AO by invoking provisions of section 68 in proceedings initiated for limited scrutiny was without jurisdiction and bad in law. Case of assessee was that AO expanded assessment from 'Limited Scrutiny' to 'Complete Scrutiny' without following procedure as laid by the CBDT Circular No. 20/2015, dated 29-12-2015; and subsequent instruction on same, dated 14-7-2016 (para 4) and Circular, dated 30-11-2017 (para 3). Held: Perusal of order sheet did not indicate that AO took approval of Principal Commissioner/Commissioner for expanding assessment from Limited Scrutiny to Complete Scrutiny. No approval in writing was taken by AO for expanding scope of assessment so as to make addition under section 68. Since CBDT Circular issued under section 119 is binding on department/Assessing officer, AO was bound by it and without taking approval in writing from Principal Commissioner/Commissioner, AO could not enquire into other issues other than issue for which the assessment was selected for limited Scrutiny. AO without following procedure expanded his jurisdiction without approval which action of AO was without jurisdiction. Addition was null in eyes of law and, therefore, was deleted.
REFERRED : National Thermal Power Company Limited v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 0342 (SC), Late Smt. Gurbachan Kaur, Through L/H Shri Dilpreet Singh Narang v. Dy. CIT, Circle-2, Jaipur. [ITA No. 692/JP/2019 (Assessment year 2014-15) Order, dated 5-12-2019] : 2019 TaxPub(DT) 8127 (Jp-Trib), Shri Vijay Kumar v. The ITO [ITA No. 434/Chd/2019 (Assessment year 2014-15) Order, dated 12-9-2019] : 2019 TaxPub(DT) 6786 (Chd-Trib) and M/s. Nitin Killawala & Associates, v. ITO 11 (3) (1) [ITA No. 1611/M/2013 (Assessment year 2008-09) Order, dated 16-9-2015] : 2018 TaxPub(DT) 6795 (Mum-Trib).
FAVOUR : In assessee's favour.
A.Y. : 2016-17
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