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2023 (8) TMI 451 - AT - Income TaxScope of limited scrutiny u/s 143(2) - Addition u/s 69A - cash deposits the source of which remained unexplained - - HELD THAT - In the present case, the Ld. AO made the impugned addition u/s 69A of the Act not falling within the scope of limited scrutiny and admittedly is without converting the limited scrutiny into complete scrutiny. This outstepping action of Ld. AO being extra-territorial to the scope of limited scrutiny in judicial precedents rendered itself void, resultantly no legs to stands, therefore directed for deletion. Legal ground is adjudicated in favour of the assessee, all remaining meritare grounds rendered themselves academic.
Issues involved:
The judgment involves challenging an order passed u/s 250 of the Income-tax Act, 1961 by the National Faceless Appeal Centre for the assessment year 2016-17. Issue 1: Jurisdiction of Assessing Officer The appellant challenged the addition made u/s 69A of the Act, alleging extra-territorial jurisdiction of the Ld. AO. The appellant argued that the amount deposited was from a personal savings account and not disclosed in the business accounts. The legal ground was raised without triggering fresh enquiry, thus admitted as per relevant case law. Issue 2: Compliance with CBDT Circular The Ld. AO extended the scope of limited scrutiny without obtaining prior approval as per CBDT Circular 5/2016. The appellant contended that this action was in violation of the circular, rendering the addition void. The Tribunal noted the binding nature of CBDT circulars and held that actions contrary to them are unlawful, directing the deletion of the impugned addition. Key points: - The Ld. AO made additions to the total income of the assessee under different heads. - The appellant appealed against the addition made u/s 69A of the Act, arguing the source of the cash deposits. - The Tribunal admitted the additional legal ground challenging jurisdiction without fresh enquiry. - Compliance with CBDT Circular 5/2016 was crucial, and the Tribunal directed deletion of the addition due to lack of prior approval for extending scrutiny.
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