Board Instructions - AIR

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..... Board Instructions - AIR
Query (Issue) Started By: - CA GOPAL JI AGRAWAL Dated:- 7-10-2008 Last Reply Date:- 12-10-2008 Income Tax
Got 2 Replies
Income Tax
If a case is taken into scrutiny on the basis of AIR, can asseessee has any right to restrict the AO to the inquiry covered under AIR or AO has similar powers in other cases picked up in scrutiny. I think some board instructions ha .....

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..... d been issued in past and later modified or so. Please help me out. Reply By Surender Gupta: The Reply: There is no provision in Income Tax to restrict the power of AO to make assessment as a whole under section 143(2), (3). Once assessment proceedings are started, AO is duty bound to complete the assessment for the whole assessment year by computing the whole income. Reply By DEV KUMAR KOTHARI: .....

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..... The Reply: Prima facie I agree with Mr. Surendra Gupta that the A.O. can proceed to examine all aspects for assessment even if notice u/s 143(2) is issued on the basis of AIR. However, reading between lines of s. 143 (2) (ii) it can be said that the expressions used therein like "...if he (AO) consider it necessary or expedient to ensure that the assessee had not understated..." mean that the A.O .....

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..... . should have so considered by application of his mind, and therefore, there should also be recording for the same because otherwise it cannot be said that he has actually applied his mind and so considered about need of enquiry beynd what is suggested by AIR. If the notice is issued in mechanical manner based on AIR alone, and without any other reason recorded by the A.O. , the assessee can reque .....

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..... st the A.O. to restrict scope of enquiry to the aspects covered by AIR. For this purpsoe the assessee must have copy of order sheet and other relevant records, to establish that notice has been issued only on the basis of AIR and not in terms of necessity or expediency found by the A.O. after application of his mind. The matter will involve litigation and further professional assignemnts.
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