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TMI Blog2021 (5) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Premium (Keyman Policy) since the AO has gone as per the dictum of CBDT circular on the subject. Therefore, the AO s action/ omission of not looking into the issue of Insurance Premium (Keyman Policy) cannot be termed as erroneous. - Decided in favour of assessee. - I.T.A. No.353/Kol/2020 - - - Dated:- 9-4-2021 - Shri J. Sudhakar Reddy, AM And Shri A. T. Varkey, JM For the Appellant : Shri Akkal Dudhwewala, AR For the Respondent : Shri Imokaba Jamir, CIT ORDER PER SHRI A. T. VARKEY, JM: This appeal preferred by the assessee is against the order of Ld. PCIT-2, Kolkata dated 17.03.2020 for Assessment year 2015-16 u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 2. At the outset, the Ld. A.R of the assessee, Shri Akkal Dudhwewala, assailing the action of the Ld. PCIT to interfere in the assessment order passed by the AO dated 11.08.2017 for AY 2015-16 by exercising his revisional jurisdiction contended that the Ld. PCIT erred in invoking the revisional jurisdiction u/s 263 of the Act without satisfying the condition precedent as contemplated u/s 263 of the Act. Therefore, according to Ld. A.R, the impugned order of Ld. PCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny under CASS for the three (3) items discussed supra and issue of deduction of ₹ 10,02,198/- was not figuring in and in fact the amount incurred on account of Insurance premium to the Flats at Mumbai was only ₹ 2,198/- which was duly added back by the assessee to the income while computing the income from business and profession as per section 37 of the Act. It was pointed out by the assessee that the insurance premium amounting to ₹ 10,00,000/- is related to Keyman Policy and not related to flats at Mumbai as alleged by the PCIT. Hence, it was contended by the assessee that this amount of ₹ 10,00,000/- has not been added back to the income while computing income from business and profession and which is allowable u/s 37 of the Act. And, therefore, the assessment order passed by the A.O u/s 143(3) is not erroneous, therefore, section 263 proceedings is not maintainable. It was also pointed out by assessee that as per CBDT Instruction No. 2/2014 dated 26.09.2014, the field officers were directed to confine their enquiries strictly to CASS reasons and they were not permitted to make enquiries in respect to the issues for which case was not selected fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of Insurance Premium (Keyman Policy) of ₹ 10,00,000/- was not the reason for selection of the case for limited scrutiny. Therefore, as per the CBDT circular (supra) the AO could not have initiated enquiry on the issue of Insurance Premium (Keyman Policy) of ₹ 10,00,000/- and it is settled law that CBDT circulars are binding on income tax authorities. Therefore in such a scenario, the Ld. PCIT could not have invoked jurisdiction u/s 263 of the Act because he could not have held the AO s order to be erroneous because the AO was justified in not enquiring in to the issue of Insurance Premium (Keyman Policy) of ₹ 10,00,000/-, since the AO has gone as per the dictum of CBDT circular on the subject. Therefore, the AO s action/ omission of not looking into the issue of Insurance Premium (Keyman Policy) of ₹ 10,00,000/- cannot be termed as erroneous . And, therefore, the Ld. PCIT could not have invoked revisional jurisdiction since AO s omission not to look into the issue of keyman policy was in consonance with the CBDT dictum on the subject and so it cannot be termed as erroneous and prejudicial to Revenue; and the impugned action of Ld. PCIT is akin to do ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee s second substantive argument that since the Assessing Officer had framed his regular assessment involving limited scrutiny on the above stated issues not including sec. 33AB deduction to the purpose of the impugned withdrawals. We find that the same is duly covered in its favor as per this tribunal s co-ordinate bench s decision in ITA No.1361/Kol/2016 in Sanjeev K. Khemka vs. Pr. Commissioner of Income-Tax-15, Kolkata decided on 02.06.2017 as under:- 4. We have heard the rival contentions of the parties and perused the materials on record. The primary issue in the case on hand revolves whether it is a case selected under CASS for limited scrutiny or regular scrutiny. It can be seen from the grounds of appeal that the assessee wants to contend that the very initiation of proceedings u/s 143(3) of the Act on the basis of regular scrutiny under the Act was bad in law. The proceedings under section 143(3) of the Act should have been limited to the extent of the information gathered through AIR. Accordingly the proceedings u/s 263 of the Act cannot be expanded beyond the issue raised in AIR. Thus the order u/s 143(3) of the Act beyond the points of AIR is invalid in law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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