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TMI Blog2022 (8) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... e completed. In the show cause notice issued by the ld. Pr. CIT, it is noted that he has raised issues relating to non-reporting of contract receipts and secondly, regarding discrepancy in the sundry creditors accounts as shown in the balance sheet dated 31.03.2013, the sundry creditors shown in the preceding assessment year and the purchases made during the year under consideration. Further, besides these two issues, the ld. Pr. CIT has noticed certain discrepancies/shortcomings in the assessment order, which find mention in Point No. 13 of the impugned order and basis the same, it was held that the assessment order passed by the AO is not only erroneous but also prejudicial to the interest of the Revenue. We therefore find that two issues on which show cause notice has been issued as well as the other issues as contained in Para 13 of the impugned order, are not subject matter of limited scrutiny and therefore, it is a case where these issues have been raised for the first time by the ld. Pr. CIT by enlarging the scope of the assessment. It is a consistent stand across various Benches of the Tribunal that where the case of the assessee has been selected for limited scrutiny ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2015, which was placed at Page No. 103 of the assessee's paper book. It was submitted that where the case was selected for limited scrutiny, the ld. Pr. CIT while exercising the jurisdiction u/s. 263 of the Act cannot enlarge the scope of assessment proceedings and therefore, the order passed by the ld. Pr. CIT, wherein, he has enlarged the scope of assessment and subject matter of enquiry by the AO, cannot be sustained and the same deserve to be set-aside In support, reliance was placed on the decisions of the Co-ordinate Bench, Chandigarh, in case of Vijay Kumar v. ITO, Patiala, in ITA No. 434/Chd/2019 dated 12.09.2019, Co-ordinate Bench, Chennai, in case of Smt. Padmavathi v. ITO, Tirunelveli, in ITA No. 1306/Chny/2019 dated 02.12.2019, Co-ordinate Bench, Jaipur, in case of Mahendra Singh Dhankhar (HUF) v. ACIT, Jhunjhunu, in ITA No. 265/JP/2020 dated 30.06.2021 and Co-ordinate Bench, Delhi, in case of Balvinder Kumar v. Pr. CIT, New Delhi, in ITA No. 485 (Delhi) of 2020 dated 10.12.2020. 4. Per contra, the ld. CIT/DR submitted that it is not in dispute that the case of the assessee was selected for limited scrutiny under CASS to verify the introduction of capital. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance sheet dated 31.03.2013, the sundry creditors shown in the preceding assessment year and the purchases made during the year under consideration. Further, besides these two issues, the ld. Pr. CIT has noticed certain discrepancies/shortcomings in the assessment order, which find mention in Point No. 13 of the impugned order and basis the same, it was held that the assessment order passed by the AO is not only erroneous but also prejudicial to the interest of the Revenue. We therefore find that two issues on which show cause notice has been issued as well as the other issues as contained in Para 13 of the impugned order, are not subject matter of limited scrutiny and therefore, it is a case where these issues have been raised for the first time by the ld. Pr. CIT by enlarging the scope of the assessment. 7. It is a consistent stand across various Benches of the Tribunal that where the case of the assessee has been selected for limited scrutiny, the ld. Pr. CIT cannot enlarge the scope of the said assessment. In this regard, we refer to the decision of the Jaipur Benches in case of Mahendra Singh Dhankhar (HUF) v. ACIT, Jhunjhunu (supra), where speaking through one of us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 as under:- 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) of earlier Instruction dated 29.12.2015, shall continue to remain applicable. 3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on record for forming such view; b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the case is not examined under 'Complete Scrutiny' and after seeking approval from the competent authority, the case can be converted into complete scrutiny and that too, during the currency of assessment proceedings. Therefore, what is essential is the existence of credible material and basis examination thereof and formation of belief by the AO at first place during the course of assessment proceedings that there is a case of under assessment or escapement of income which is similar to provisions of section 147 of the Act. In the instant case, we find that the assessee, being in business of real estate development has followed percentage completion method of accounting and has accounted for actual costs incurred though after the end of the financial year as the project was substantially completed and revenues have been recognized. Therefore, we find that there is no infirmity in assessee following the accepted method of accounting and basis thereof, determination of income which is offered to tax and thus, we find that there was no tangible material or information available during the course of assessment proceedings basis which reasonable belief can be formed of esca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er CASS for the limited purpose of verifying the Chapter VI-A deduction. Once the case is picked up for specific purpose under CASS, then it is outside the purview of the Assessing Officer to look into any other aspect other than the aspect for which it is picked up. Hence, the Assessing Officer has not formed any opinion in respect of computation of book profits in the hands of assessee. Once, no such opinion has been formed by the Assessing Officer, the Commissioner has erred in holding the order of the Assessing Officer to be erroneous and prejudicial to the interest of revenue in this regard. Accordingly, we reverse the findings of the Commissioner. Accordingly, we hold that the order passed by the Commissioner under section 263 of the Act is invalid and the same is quashed for both the assessment years. In M/s. R.H. Property vs. PCIT, ITA No. 1906/Mum/2019 it was held that,- As a matter of fact, what cannot be done directly cannot be done indirectly. Accordingly, in terms of our aforesaid observations, we are of the considered view that as the A. O had aptly confined himself to the issue for which the case of the assessee was selected for limited scrutiny, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 41,50,000/- which is apparent consideration paid for the purchase of property. The value adopted for stamp duty purpose is taken as deemed consideration u/s. 56(2)(vii) (b) of the Act and this is only deemed provision and there is no occasion for the assessee to explain the source for deemed consideration paid. It is settled position of law that while completing the assessment under limited scrutiny, the Assessing Officer cannot look beyond the issue for which the case was selected for scrutiny. It is beyond the power of the Assessing Officer to look into any other issue which has come to his notice during the course of assessment proceedings. Then the issue that comes up for our consideration is whether the ld. PCIT could exercise the power of revision to look into any other issue which the Assessing Officer himself could not look. In our considered opinion, the answer is an emphatic ''No''. In the circumstances, the impugned order passed by the ld. PCIT cannot be sustained in the eyes of law.... . 10. In light of aforesaid discussions and following consistent stand taken by the various Benches of the Tribunal, the impugned order passed by the ld. Pr. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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