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TMI Blog2020 (9) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore action of AO to assess the loss is beyond his jurisdiction and in violation of the CBDT circular which he was bound to obey. We find merit in the assessee s grounds of appeal that the action of the AO to make addition on account of loss is beyond jurisdiction and therefore null in the eyes of law and hence we delete the addition. Reopening of cases for last preceding six years - CIT(A) does not have power to give directions to the assessing officer for reopening of cases for last preceding six years and subsequent years of the assessee. Therefore, according to ld Counsel it is illegal and beyond jurisdiction. CIT(A) who is the first appellate authority can do what the AO can do. The first appellate proceedings is an extension of the assessment proceedings. So, it means that what the Assessing Officer cannot do, the CIT(A) cannot do. As per the scheme of the Act when an assessee files a return of income the Assessing Officer accepts the return of income u/s 143(1) of the Act or scrutinize the assessment and pass the order u/s 143(3) of the Act and if the time limit to issue the notice 143(2) has lapsed then assessing officer cannot frame the assessment u/s 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamine the mismatch of sales between audited accounts of the assessee and Income Tax Return filed by the assessee. Therefore, during the course of assessment proceedings, mismatch in sales turnover was one of the reasons for scrutiny and accordingly the assessee was asked to furnish the details of sales. In response, the assessee filed the details of sales and reconciliation of sales on the day of hearing on 10.11.2016 before the assessing officer. In support of the Sales/Turnover, the assessee also furnished bills of sales. However, the assessing officer rejected the contention of the assessee and made addition on different ground holding that since the assessee had claimed to have traded on different scripts through the broker namely M/s. Shreyansh securities thereby resulting in having loss of ₹ 42,97,440/- during the financial year under consideration, and the said transactions were not carried out electronically on screenbased systems, and the said transactions were done without settlement (nondelivery), therefore assessing officer treated the said loss as speculation loss under section 43(5) and hence made addition to the tune of ₹ 42,97,440/-. 4. Aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Scrutiny , information pointing out specific tax-evasion for the relevant year, given by any law-enforcement/intelligence/regulatory authority or agency is available with the concerned Assessing Officer, however, in view of the restrictive nature of enquiry/investigation which can be made in Limited Scrutiny cases, the same presently cannot be acted upon. 3. The matter has been considered by the Board. In order to enable proper enquiry/ investigation in pending Limited Scrutiny cases which were selected through CASS cycles of 2017 and 2018, where credible material or information has been/is provided by any law-enforcement/intelligence/regulatory authority or agency regarding tax-evasion by an assessee, it has been decided by the Board that issues arising from such information can also be examined during the course of conduct of assessment proceedings in such Limited Scrutiny cases with prior administrative approval of the concerned Pr. CIT/CIT. 4. It is pertinent to mention that unlike CASS 2015 and 2016 cycles, where consideration of any additional issue lead to the conversion of case to Complete Scrutiny as laid down in Instruction No. 5/2016 dated 14.07.16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case for Complete Scrutiny then he has to place this proposal before the Pr. CIT/CIT concerned and upon his approval, further issue can be considered during the assessment proceeding; which the assessing officer has failed to do so, in the assessee s case, therefore, ld Counsel submits before us that assessment order passed by the assessing officer is bad in law. 6. The ld. Counsel has drew our attention to page no.47 of paper book which is a notice u/s 143(2) of the Act dated 31.08.2015 wherein it is clearly stated that the assessee s case has been selected for limited scrutiny under the CASS. Therefore, we note that the assessee s case was selected for limited scrutiny only and the assessing officer should not have expanded the scope of limited scrutiny without recording reasons for doing so and without taking permission from the concerned Pr.CIT/CIT. The ld. Counsel also drew our attention to the notice issued by assessing officer under section 142(1) dated 07.06.2016 which is placed at page no. 45 46 of the Paper Book wherein the assessee was directed to reconcile the sales turnover reported in the audit report vis- -vis turnover in the Income Tax Return. We n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings is an extension of the assessment proceedings. So, it means that what the Assessing Officer cannot do, the CIT(A) cannot do. As per the scheme of the Act when an assessee files a return of income the Assessing Officer accepts the return of income u/s 143(1) of the Act or scrutinize the assessment and pass the order u/s 143(3) of the Act and if the time limit to issue the notice 143(2) has lapsed then assessing officer cannot frame the assessment u/s 143(3) of the Act. The assessing officer can do the assessment for the year for which assessee filed the return of income. The assessing officer can not frame the assessment for preceding years and subsequent years. Hence, the ld. CIT(A) could not have given directions to the Assessing Officer for which the Assessing Officer was not empowered to do, as discussed above and for that we rely on the judgment of the hon ble Bombay High Court in the case of B. Mohta 56 ITR 269(Bom). Based on the facts narrated above we are of the view that the directions given by the ld. CIT(A) is beyond his jurisdiction and therefore we cancel the same. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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