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TMI Blog2020 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... he case in invoking the provision of sec 115BBE. The action of the AO in invoking the provisions of sec 1115BBE and confirmed by the CIT(A) is illegal, excessive and deserves to be quashed." 2. Briefly stated, the facts of the case are that the assessee is an individual engaged in the business of wholesale trading and repairs of electronic items. He filed his return of income declaring total income of Rs. 2,05,830/- which was selected for limited scrutiny under CASS and thereafter assessment was completed u/s 143(3) dated 23rd December, 2017 wherein the addition of Rs. 10,00,000/- was made being unexplained investment in property u/s 69 of the Act. On appeal, the addition so made has been sustained by the ld. CIT(A) and against the said finding, the assessee is in appeal before us. 3. During the course of hearing, the ld. AR submitted that the case of the assessee was selected for limited scrutiny through CASS on the issue of "whether any capital gain/loss on sale of property has been correctly shown in the return of income by assessee" and in this regard, our reference was drawn to the order sheet entry dated 20.09.2017. It was submitted that the assessee did not sell any prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been decided by the ld. CIT(A) wherein the limited scrutiny was initiated under CASS to examine correctness capital gains/loss on sale of property whereas addition has been made u/s 69 treating the investment in immovable property as unexplained investment. 5. Per contra, the ld. DR is heard who has submitted that it is not in dispute that the matter was selected for limited scrutiny for examining capital gains on sale of property. However, the matter of purchase of the property is also emanating from the same issue for which the matter was selected for limited scrutiny as ultimately the assessee will be making the investment in the purchase of property from the sale consideration so received. It was further submitted that the assessee has not raised any such objection before the Assessing Officer and even before the ld. CIT(A) and therefore, the contention so advanced by the assessee should not be accepted. It was further submitted that sufficient opportunity have been provided by the ld. CIT(A). However, the assessee through its AR has sought adjournment from time to time and therefore, the ld. CIT(A) has passed the order ex-parte qua the assessee basis material availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Assessing Officer has taken the said submissions on record and has not recorded any adverse findings in this regard. In other words, the Assessing officer has accepted the explanation of the assessee that there was no transaction of any sale of immovable property by the assessee during the financial year relevant to impugned assessment year and therefore, the question of earning any capital gain and not showing the same in return of income did not arise at all. The matter for which limited scrutiny was taken up, therefore, attained finality and no addition was made by the Assessing officer. 10. The Assessing officer has thereafter proceeded to examine whether the assessee has purchased any immovable property as apparent from the order sheet entry dated 19.12.2017 and an addition of Rs. 10 lacs has thereafter been made u/s 69 of the Act towards unexplained investment in the property. We find that this transaction of purchase of property is not emanating from the same issue for which the matter was selected for limited scrutiny as the assessee has not sold any immoveable property during the year and therefore, the question of making the investment in the purchase of property f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in 'CASS Cycle 2015'. In these cases, it was stated that the general scope of enquiry in scrutiny proceedings should be restricted to the relevant parameters which formed the basis for selecting the case for scrutiny. However, in revenue potential cases, it was further provided that 'Complete Scrutiny' could be conducted, if there was potential escapement of income above a prescribed monetary limit, subject to the approval of administrative Pr. CIT/CIT/Pr. DIT/DIT. 2. In order to ensure that maximum objectivity is maintained in converting a case falling under 'Limited Scrutiny' into a 'Complete Scrutiny' case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny'. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eking prior approval from the competent authority, the AO may examine the additional issues besides the issue(s) involved in 'Limited Scrutiny'. The Assessing Officer can thus widen the scope of scrutiny where the matter was initially selected for scrutiny assessment. However, the condition precedent for such action of the Assessing Officer is that he has to follow the procedure so laid down and seek prior approval of the competent authorities. In the instant case, it is an admitted fact that no such approval has been taken by the Assessing officer. It is therefore, a case where the CBDT Instructions which are binding on the Assessing officer have not been followed by him. 13. Further, we find that it is a consistent position taken by various Benches of the Tribunal including Jaipur Benches that where the Assessing officer has taken up fresh issue without converting limited scrutiny to complete scrutiny by taking prior approval of the competent authority, then the said order passed by the Assessing officer will be nullity as beyond his jurisdiction. In this regard, we refer to recent decision of this Bench in the case of Late Smt. Gurbachan Kaur vs. DCIT (supra) wherein the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable where the case is selected for scrutiny under CASS only on the parameter(s) of AIR/CIB/26AS data. If a case has been selected under CASS for any other reason(s)/parameter(s) besides the AIR/CIB/26AS data, then the said Instruction would not apply. iii. Scope of Enquiry: Specific issue based enquiry is to be conducted only in those scrutiny cases which have been selected on the parameter(s) of AIR/CIB/26AS data. In such cases, the Assessing Officer, shall also confine the Questionnaire only to the specific issues pertaining to AIR/CIB/26AS data. Wider scrutiny in these cases can only be conducted as per the guidelines and procedures stated in Instruction No. 7/2014. iv. Reason for selection: In cases under scrutiny for verification of AIR/CIB/26AS data, the Assessing Officer has to intimate the reason for selection of case for scrutiny to the assessee concerned. 3. As far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year-- one is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in 'L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Hindi version to follow. Sd/- (Ankita Pandey) Under Secretary to Government of India" 14. With Instruction 7 of 2014, the Board has made it specifically clear that the scope of enquiry should be limited to verification of the particular aspects only. It has also been directed that an approval is required from the PCIT/DIT, in writing, after being specific about the merits of the other issues for comprehensive scrutiny. 15. The said instruction reads as under: "Instruction No. 7/2014 Government of India Ministry of Finance Department of Revenue (CBDT) Room No. 143E, North-Block, New-Delhi Dated the 26 th of September, 2014 To AU Pr. Chief-Commissioners of Income-tax/Chief Commissioners of Income-tax A All Pr. Directors-General of Income-tax/Directors-General of Income-tax Sir/Madam, Subject: - Scope of enquiry in cases selected for scrutiny during the Financial Year 2014-2015 on basis of AIR/C1B /26AS mismatch regarding It has come to the notice of the Board that during the scrutiny assessment proceedings some of the AOs are routinely calling for information which is not relevant, for enquiry into the issues to be considered. This has been causing undue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs) on any other issue(s) apart from the AIR/CIB/26AS information based on 14 which the case was elected under CASS requiring substantial verification, the case may be taken up for comprehensive scrutiny with the approval of the Pr. CIT/DIT concerned. However, such an approval shall be accorded by the Pr. CIT/DIT in writing after being satisfied about merits of the issue(s) necessitating wider and detailed scrutiny in the case. Cases so taken up for detailed scrutiny shall be monitored by the it. CIT/Addl. CIT concerned. 5. The contents of this Instruction should be immediately brought to the notice of all concerned for strict compliance. 6. Hindi version to follow. (Rohit Garg) Deputy Secretary to the Government of India" 16. A perusal of the aforesaid instruction shows that the Assessing Officer can widen the scope of scrutiny even if it is selected for scrutiny assessment under CASS. However, the condition precedent for such action of the Assessing Officer is that he has to seek prior approval of the higher authorities. A perusal of the assessment order shows that the Assessing Officer has not mentioned as to when the permission from the PCIT was sought to make furth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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