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TMI Blog2023 (2) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the ld. PCIT under section 263 of the Act cannot be upheld in the eyes of law. The case law relied on by the ld. DR has no application to the facts of the present case. - Decided in favour of assessee. - I.T.A. No. 365/Chny/2022 - - - Dated:- 31-1-2023 - Shri V. Durga Rao , Judicial Member And Shri G. Manjunatha , Accountant Member For the Appellant : Shri S. P. Chidambaram , Advocate For the Respondent : Shri S. Senthil Kumaran , CIT ORDER PER V. DURGA RAO , JUDICIAL MEMBER : This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax-1, Chennai dated 23.02.2022 relevant to the assessment year 2017-18 passed under section 263 of the Income Tax Act, 1961 [ Act in short]. 2. Brief facts of the case are that the assessee filed the return of income for the assessment year 2017-18 on 30.10.2017 admitting total income of ₹.16,38,580/-. The case was selected for scrutiny under CASS - LIMITED SCRUTINY category. The reason is to examine the Cash deposit during the year . Notice under section 143(2) of the Act dated 09.08.2018 was issued and served to the assessee. Further notice under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , convert the 'limited' lo 'complete' scrutiny. The approval of the PCIT is necessary for such conversion. The Assessing Officer, in spite of the available facts on record did not send the proposal to PCIT for taking up the case for complete scrutiny. It is clear that the case was not converted to complete' scrutiny even though credible information indicating under-assessment was available on record. Since the assessee not filed any written submissions, the ld. PCIT has passed the exparte revision order directing the Assessing Officer to redo the assessment by observing as under: 7. The case was posted for hearing on 21.03.2022 at 04.30 PM vide DIN Notice No. ITBA/REV/F/REV1/2021-22/1040883008(1) dated 16.03.2022. The assessee has not responded to the said notice till date. It is verified from the ITBA Portal that the assessee has received the mail. No written submission has been filed. It appears that the assessee has nothing to offer by way of explanation with regard to the issues raised in the show cause notice dated 16.03.2022. Hence an exparte order u/s.263 is hereby passed based on the materials available on record. 8. In the light of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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. Therefore, the ld. Counsel for the assessee has argued that the order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue. Further, the ld. Counsel relied on the decision in the case of Subbunadar Chandra Sekar v. ITO in ITA No. 612/Chny/2021 dated 06.12.2022 and submitted that the issue is squarely covered in favour of the assessee. 5. On the other hand, the ld. DR strongly supported the revision order passed by the ld. PCIT. Further, the ld. DR has submitted that cash deposited during demonetisation was not verified by the Assessing Officer. He further relied on the order passed by the ld. PCIT at para 2.4 and submitted that various cash deposits made by the assessee were not examined by the Assessing Officer and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities that in several cases under Limited 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. In such a case, the issues arising from such information could 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. However, in the present case, we find that there is no such credible material or information which would justify widening the scope of limited scrutiny. Therefore, Ld. Pr. CIT, in our considered opinion, could not term the assessment order as erroneous or prejudicial to the revenue since the flagged issues, could otherwise be not examined by Ld. AO during the course of regular assessment proceedings. 7. Our view is duly supported by the recent decision of this Tribunal in Mr. Yuvaraj vs. ITO (ITA No.1722/Chny/2019 order dated 07.03.2022) wherein the bench held as under: - 6. We have heard both the parties, perused material available on record and gone through orders of the authorities below. We find that the assessment for the impugned assessment year has been taken up for limited scrutiny to verify large cash deposits into savings bank account and the Assessing Officer has completed assessment after verifying cash deposits in savin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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