GITA,BHARATPUR V. ITO, WARD-2, BHARATPUR

MA 21/JPR/2025

AI Insights

The case revolves around the Income Tax Officer's (ITO) assessment of Smt. Gita for the Assessment Year 2016-17, where the ITO made additions to her income based on unexplained cash deposits and discrepancies in cash balances. The case was initially selected for Limited Scrutiny due to cash deposits during the demonetization period. However, the ITO expanded the scope to include other issues without proper procedural adherence. The assessee contested these additions, leading to an appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT found procedural lapses and ruled in favor of the assessee, leading to the deletion of the contested additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717091 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 27-02-2025
• Other Referred Cases: Nitin Killawala & ITO 11(3)(1), Suresh Jugraj Mutha vs ACIT, Sh Vijay Kumar Patiala vs ITO Ward 1, Patiala, Late Smt Gurbachan Kaur vs DCIT, Manju Kaushik Jaipur vs The DCIT, Shri H.N. Ravindra Hassan vs ITO Ward 2, Shri Sita Ram Swami vs The ITO, Ward 4(5), Jaipur, Dev Milk Foods Pvt. Ltd. Vs ACIT, Shri Prabir Das, Karimganj vs Income Tax Officer, Sh. Atul Gupta vs ACIT, Shri Sagar Uttam Murhe vs DCIT, Circle-8, ACIT Vs Trehan Promoters and Builders Pvt. Ltd, Sukhdham Infrastructures LLP vs ITO, Ward-40(2)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: TARUN MITTAL
• Keywords: Business income; Opportunity of being heard; Business expenditure; Corroborative evidences; Principle of natural justice; Assessment record; Validity of assessment
• Section: 143(3); 142(1); 133(6)

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’SMC’ JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI M.A. No. 21/JP/2025 (Arising out of ITA No. 619/JP/2023) fu/kZkj.k o\"kZ@Assessment Years : 2016-17 Smt. Gita Near Champalal Ka Bara, Subhash Colony, Bharatpur cuke Vs. ITO, Ward 2 Bharatpur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BDKPG8593A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Tarun Mittal, CA jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 25/06/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 21/08/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. The Present Miscellaneous Application has been filed by the assessee u/s 254(2) of the Act against the order of ITAT, Jaipur Benches, Jaipur in ITA No. 619/JP/2023 dated 31.01.2024 praying therein following reasons to suitably modify or recall of its order: Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 2 This Miscellaneous Application u/s 254(2) of the Income Tax Act, 1961 is being presented with the prayer to rectify certain apparent mistakes in the abovementioned order of this Hon’ble Bench on the backdrop of following facts: 1. That, the abovementioned appeal i.e. ITA No. 619/JPR/2023 was filed by assessee against the order of Ld. CIT(A), National Faceless Appeal Centre, Delhi dated 14.08.2023 which was decided by this Hon’ble Bench on 31.01.2024, order of which was dispatched on 14.03.2024. However, assessee has not received the order till date and only came to know about the same when she received the notice of recovery of demand from the department. 2. That, the abovementioned appeal emanated from the Assessment order dated 24.12.2018 passed by ld.AO u/s 143(3) of the Income Tax Act. 3. That, the assessment for the year under consideration was selected for Limited scrutiny under CASS with the reason to examine “Cash deposit for demonetization period of (9th November to 31st December) is reported as per SFT reporting, no return was filed for preceding assessment year and for current year, return filed after 07.11.2016”. However, ld.AO completed assessment after making various additions beyond the scope of limited scrutiny, without following necessary procedure laid down as per CBDT Instruction No.05/2016 (issued in partial modification to Instruction No. 20/2015 dated 29.12.2015). 4. That, on first appeal, ld.CIT(A) though allowed part relief, however confirmed the validity of Assessment order passed, whereby additions were made by ld.AO beyond the scope of Limited scrutiny. 5. That, in the appeal by assessee before the Hon’ble Bench, it has been challenged that the ld. CIT(A) has erroneously sustained the assessment proceedings even though notice for conversion of the scrutiny from limited to complete has not been placed on record by the ld.AO. 6. That, while dismissing the appeal filed by assessee against the order passed by ld.CIT(A), the Hon’ble Bench has not made any observation nor has commented upon the non-compliance of Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 3 procedural requirements (regarding not following procedure for conversion of Limited scrutiny to Complete Scrutiny) by ld.AO while completing the assessment proceedings and order passed by ld. CIT(A) confirming part of the additions made beyond the scope of Limited Scrutiny. 7. That, it is worthwhile to mention that the Hon’ble Bench has passed order without taking into consideration the written submission and the documentary evidences filed by the assessee vide Two volumes of paperbook containing the documentary evidences file before the ld.AO and the ld. CIT(A) as well as the caselaw compilation referred in the written submission of the assessee. Therefore, this miscellaneous application is presented before this Hon’ble Bench seeking rectification of the abovementioned order dated 31.01.2024 on the following grounds: 1. Because, the appeal has been dismissed without considering the primary issue regarding completion of the assessment proceedings, whereby additions were made beyond the scope of Limited Scrutiny, that too without following necessary procedure as prescribed in CBDT Instruction No. 5/2016. 2. Because, the appeal has been dismissed appeal by observing that “ld. AR has neither substantiated nor produced any documentary evidence to controvert the findings of the ld. CIT (A)”, despite the fact that the assessee has placed on record all the requisite documentary evidences along with the written submissions. Thus, appeal has been decided without making any observations on merits. • Because, the appeal had been dismissed solely on the ground of lack of proper written submissions and the availability of requisite documentary evidences before the Hon’ble Bench, though, the assessee has fulfilled onus in placing on record the written submissions (8 Pages) and the documentary evidences vide the submission of two compilations of papers wherein 1st compilation of 69 pages & 2nd compilation of 139 pages. In one of these compilations, the assessee had produced all the relevant documentary evidences and in the other compilation, case laws relied upon by the assessee has been furnished during the proceedings before the Hon’ble bench. Though Hon’ble bench has reproduced the written submission of the assessee in order Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 4 passed, no single observation has been made as to why submission so made is not acceptable nor it has been pointed out as to how the assessee has failed to place on record requisite documentary evidences. This failure to take into consideration the submissions of the assessee is against the principles of natural justice. Therefore, in light of the mistakes apparent from record in the order of this Hon’ble Bench dated 31.01.2024 as pointed out above, it is humbly prayed that the said order may please be modified by rectifying the mistakes as pointed out in this application. Hope your honours would accede to the request. 2. At the outset, the bench noted that the registry has pointed out that the present miscellaneous application filed by the assessee reported to have been filed with a delay of 211 days. On the other hand, ld. AR of the assessee submitted that the assessee on receipt of order of ITAT filed the present miscellaneous application within the time from the receipt of the order. Thereby there is no delay as such on the part of the assessee in filing the present miscellaneous application and therefore, prayed that the same may be considered as well within the time. Having not disputed this facts by the other part considering that submission we consider the present Miscellaneous Application to be decided on its merits. Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 5 3. Apropos to the above miscellaneous application filed. The ld. AR of the assessee drawn our attention to page No. 14 of the impugned order of the Co-ordinate Bench wherein on the one hand the bench has appreciated the submission of the assessee and on the other hand, noted that “we observe that the assessee neither substantiated nor produce any documentary evidence to controvert the finding of ld. CIT(A)”. Thus, considering that contrary finding and is available on record that the assessee has filed in detail paper book containing following evidence / records and case laws that finding is mistake apparent on record; S.No . PARTICULARS PAGE NOS. 1. Copy of Acknowledgement and Receipt of Return of Income filed u/s 139 for A.Y. 2013-14 1-3 2. Copy of notice u/s 143(2) of the Income Tax Act, 1961 dated 24.09.2018 stating the reasons for case being selected for Limited Scrutiny. 4-7 3. Copy of notices u/s 142(1) of the Income Tax Act, 1961 issued during the course of assessment proceedings. 8-11 4. Copy of replies filed during the course of assessment proceedings before the ld. AO. 12-14 5. Copy of Statement of affairs for A.Y. 2015-16 15 6. Copy of Bank Statements. 16-24 7. Copy of Cash Book. 25-33 Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 6 S.No . PARTICULARS PAGE NOS. 8. Copy of Ledger of Commission Received by the Assessee, 34-38 9. Copy of E-proceeding sheet, showing that, no notice dated 18.12.2018 was communicated to the appellant 39 10. Copy of CBDT Instruction No. 5/2016 guidelines regarding limited scrutiny 40-42 11. Copy of written submission dated 03.03.2021 filed before ld. CIT (A), NFAC, Delhi: 43-50 12. Copy of Hearing Notice u/s 250 of the Income-tax Act, 1961 dated 02.06.2023 51-54 13. Copy of written submission dated 14.06.2023 filed before ld. CIT (A), NFAC, Delhi: 55-62 14. Copy of Hearing Notice u/s 250 of the Income-tax Act, 1961 dated 18.07.2023 63-66 15. Copy of written submission dated 24.07.2023 filed before ld. CIT (A), NFAC, Delhi: 67-68 S.No. PARTICULARS PAGE NOS. 1 Copy of order of Hon'ble ITAT, Mumbai Bench \"B\", Mumbai in the case of Nitin Killawala & ITO 11(3)(1) in ITA no. 1611/M/2013 1-5 2 Copy of order of Hon'ble ITAT, Pune Bench in the case of Suresh Jugraj Mutha vs -ACIT-ITAT in ITA No.05/PUN/2016 6-15 3 Copy of order of Hon'ble ITAT, Chandigarh Bench in the case of Sh Vijay Kumar Patiala vs ITO Ward 1,Patiala in ITA No.434/CHD/2019 16-18 4. Copy of order of Hon'ble ITAT, Jaipur Benches \"B\", Jaipur in the case of Late Smt Gurbachan Kaur vs DCIT in ITA No. 692/JP/2019 19-26 5. Copy of order of Hon'ble ITAT, Jaipur Benches \"A\", Jaipur in the case of Manju Kaushik Jaipur vs The DCIT in ITA No. 1419/JP/2019 27-44 1 Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 7 6 Copy of order of Hon'ble ITAT, \"SMC-C\" Bench: Banglore in the case of Shri H.N. Ravindra Hassan vs ITO Ward 2 in ITA No.1065/Bang/2019 45-48 7 Copy of order of Hon'ble ITAT, Jaipur Benches \"A\", Jaipur in the case of Shri Sita Ram Swami, Jaipur Vs. The ITO, Ward 4(5), Jaipur in ITA No. 73/JP/2020 49-70 8 . Copy of order of Hon'ble ITAT, Delhi Bench \"B\", New Delhi in the case of Dev Milk Foods Pvt. Ltd. Vs ACIT ITAT Delhi in ITA No.6767/Del/2019 71-94 9. Copy of order of Hon'ble ITAT, Guwahati Bench, \"E Court\" at Kolkata in the case of Shri Prabir Das, Karimganj vs Income Tax Officer in I.T.A. No. 395/Gau/2019 95-99 10 Copy of order of Hon'ble ITAT, Delhi Bench \"A\", New Delhi in the case of Sh. Atul Gupta vs. ACIT in ITA No.3384/De1/2019 100-114 11 Copy of order of Hon'ble ITAT, \"B\" Bench, Pune in the case of Shri Sagar Uttam Murhe vs DCIT,Circle-8, in ITA Nos.1615 & 1329/PUN/2018 115-117 12 Copy of order of Hon'ble ITAT,Delhi Bench \"H\", New Delhi in the case of ACIT Vs Trehan Promoters and Builders Pvt. Ltd in ITA No. 9872/De1/2019 118-125 13. Copy of order of Hon'ble ITAT \"B\" Bench, Kolkata in the case of Sukhdham Infrastructures LLP vs ITO, Ward-40(2) in I.T.A. No. 2611/Ko1/2019 126-138 These basic arguments were not controverted by the revenue and therefore, bench considered the arguments of the ld. AR of the assessee and considered the present Miscellaneous Application with a view to rectifying that mistake apparent from the record we recall the impugned order considering that facts that lis between Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 8 the parties has to be decided on merits so that nobody’s rights could be scuttled down. 4. Having noted the mistake as apparent on record and with a view to rectifying that mistake the bench proceeded to deal with the issue based on record and after considering the rival submission and arguments on merits. 5. Record reveals that the grounds upon which the assessee filed the appeal are as under : “1. On the facts and in the circumstances of the case and in law, ld.CIT(A) has erred in confirming the addition of Rs.8,50,000/- and Rs.10,48,737/- on allegation of cash deposit in bank account and difference in cash balance as on 31.3.2016 vis a vis as on 31.3.2015 respectively/- being cash in hand as on 31.03.2015, when as per notice issued under CASS, the only reason for selection in scrutiny was “Return filed after 07.11.2016 and cash deposit during demonetization period.” It is submitted that making additions on the issue other than recorded for limited scrutiny without following the procedure for conversion of limited scrutiny to the fully complete scrutiny as prescribed by CBDT is bad in law and thus the consequent addition so made deserves to be deleted. 2. On the facts and in the circumstances of the case and in law, ld.CIT(A) has grossly erred in confirming the addition of Rs.8,50,000/- made by ld.AO on allegation of cash deposit by assesse in bank account during the year under consideration. It is submitted that the case was selected for scrutiny in view of the fact the return was filed belated and cash was deposited during demonetization, which happened to be on 8.11.2016, i.e. after end of F.Y. 2015-16. Appellant prays that deposits made in bank account even prior to announcement of Demonetization cannot be deemed to have been a planned affair, therefore addition of Rs.8,50,000/- being outside the scope of limited scrutiny deserves to be deleted. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has further erred in confirming addition of Rs.10,48,737/- being difference between cash in hand as on 31.03.2016 and as on 31.3.2015. It is submitted that, regular books of accounts including Purchase and Sales Ledger and Cash book were furnished before ld.AO, which are self explanatory and prove the source of cash available at the year end. It is therefore prayed that Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 9 addition made by ld.AO and confirmed by ld.CIT(A) is purely on assumptions and without bringing any contrary evidence and deserves to be deleted. 4. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal. 6. Brief facts of the case are that the return of income was filed by the assessee in the status of Individual in ITR-1 form through E- filing vide receipt No 564802370300318 on 30.03.2018 for the assessment year 2016-17, declaring total income of Rs 2,41,775/-. The case was selected for Limited Scrutiny under CASS with the reason to examine Cash deposit for demonetization period (9th November to 31st December) is reported as per SFT reporting, no return was filed for preceding assessment year and for current year, return filed after 07.11.2016\" accordingly, notice u/s 143(2) of the Income tax Act was issued through e-Proceedings on 24th September, 2018 by fixing the date of hearing on 11.10.2018. Further, as per information available with the revenue, the assessee has deposited cash during the demonetization period. To complete the assessment proceedings, notice u/s 142(1) of the Act along with questionnaire was issued on 03.10.2018 and fixed the case for submitting the online reply and documents electronically in \"E-Proceeding\" facility on or before 11.10.2018 but Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 10 on the fixed date of hearing, no compliance has been made by the assessee. On 13.11.2018 the assessee responded on e- Proceedings stating therein that during the year the assessee is engaged in the commission business of fruits and vegetables at Naveen Mandi Yard, Bharatpur. In support of the query raised, the A/R has furnished a copy of ITR-V, computation of total income along with P&L account, capital account and balance sheet and details of bank accounts along with bank statements. Further, additional query was raised by issuing notice u/s 142(1) of the Act on 16.11.2018 fixing the date of hearing on 20.11.2018 requiring assessee to furnish the nature & source of cash deposits made by him during the period under demonetization which stands uncomplied. In the meantime, notices u/s 133(6) of the Act were issued on 16.11.2018 to Punjab National Bank, Kumher Road, Bharatpur and Bank of Baroda, A.G. Road, Bharatpur & on 29.11.2018 to PNB, Kumher Road, Bharatpur. Further, additional query was raised vide note sheet entry dated 28.11.2018 fixing the date of hearing on 29.11.2018 requiring furnishing the nature & source of cash deposits made by him during the period under Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 11 demonetization. In response, the A/R has submitted that the assessee has deposited cash during the demonetization period of Rs. 4,55,500/- in PNB current account no. 7571002100002205 in the name of M/s Gita Fruit Company in which the assessee is a proprietor. The assessee has not deposited any cash other than above current account. The cash deposited by the assessee is out of cash sales and cash balance during the demonetization period. The ld. AO noted that from the submission furnished by the assessee and on verification of the bank statements it reveals that during the demonetization period the cash amounting to Rs. 727000/-deposited in PNB saving bank account bearing no. 7571000100018763 does not belong to the assessee. Thus, having satisfied with the reason being limited to Cash Deposit the ld. AO should complete the assessment. But he went upon the examine the issue which were not subject matter of the limited scrutiny and having not converted the same in full he went on to examine the other issue and thereby made the following observations; Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 12 On perusal of record, it has been seen that the assessee had shown commission income during the FY 2015-16 for which the assessee had to file ITR-4 instead of ITR-1 which indicates that the assessee did not disclose her business receipts and expenditure incurred thereupon in true and correct way. Further, on perusal of bank statement maintained with Punjab National Bank, it has been noticed that the assessee had deposited Rs. 850000/- on various dates of FY 2015-16 however she had only surplus of Rs. 173883/- from commission income after deducting business expenditure and drawings. It has also been noticed from the assessment record of FY 2015-16 that the assessee had cash balance of Rs. 23150/- as on 31.03.2015. After addition of surplus of Rs. 173883/-, it comes to Rs. 197033/-, whereas, the assessee has shown closing cash in hand at Rs. 1245770/. Thus, the assessee has income of Rs. 1048737/- from undisclosed sources. Similarly, the assessee has shown sundry debtors as on 31.03.2016 at RS. 375400/- whereas in the last FY 2014-15, there was no sundry debtors. In view of the above facts, the assessee had excess undisclosed cash of Rs. 22.74.137/- on account of excess cash in hand, sundry debtors and deposits in Punjab National Bank.The assessee failed to offer any explanation in respect of sources of such undisclosed income. Therefore, the same is added to total income of the assessee. 7. Aggrieved from that order of the assessment made by the Income Tax Officer, Ward – 2 Bharatpur the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the NFAC is reiterated here in below: “5. DECISION:I have gone through the grounds of appeal and the statements of facts furnished with the grounds of appeal and also the submissions made by the appellant during the appellate proceedings. The first ground raised by the appellant is that the Assessing Officer has made an addition of Rs. 22,74,137/- on account of cash in hand, sundry debtors and deposits u/s 69A of the Act. Since both grounds are inter connected, the same are clubbed together and decided by a combined order for the sake of convenience. 5.1 The assessment in the case of the appellant was selected for limited scrutiny under CASS with the reason to examine \"Cash deposit for demonetization period of (9th November to 31st December) is reported as per SFT reporting, no return was filed for preceding Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 13 assessment year and for current year, return filed after 07.11.2016\". The appellant in the submission has stated that the case was selected for scrutiny under limited category, however, the Assessing Officer has travelled beyond the reason for which the case was selected for scrutiny and made the addition. In this case, assessment was selected for scrutiny on the basis of cash deposited in the bank account during the demonetization period i.e. subsequent assessment year and the appellant thas has filed the return of income for the impugned assessment year u/s. 139(4) of the Act after demonetization period. Therefore, during the assessment proceedings for the impugned assessment year, the Assessing Officer was required to examine the source of the cash deposits made in the subsequent assessment year of the demonetization period. The appellant in the submission has stated that the Assessing Officer has converted the case of limited scrutiny into complete scrutiny and disregarded the various Instructions issued by the CBDT from time to time and made the additions. However, this contention of the appellant is not correct as the addition made by the Assessing Officer is with regard to the issue for which the case was selected for scrutiny. The Income-tax Department has found that some of the assessees tried to build an explanation for cash deposits in their bank accounts during the demonetization period by manipulating their books of accounts and filing revised or belated ITR and in this regard, the CBDT issued various directions for scrutiny assessment in the case of an assessee who had filed belated return during post demonetization period. Therefore, the Assessing Officer was required to examine as to whether belated ITR is filed just to build an explanation for cash deposits in bank account during the demonetization period. It is a fact that in this case the appellant had deposited cash during demonetization period and the return of income of earlier assessment year was filed belatedly after demonetization period. 5.2 It is seen from the assessment order that the Assessing Officer has sought the information related to the asset side of the Balance Sheet which includes cash in hand and sundry debtors. These details were called for in order to verify whether the appellant filed the return of income belatedly to build an explanation for cash deposits in the bank account during the demonetization period. It appears from the submission that the appellant misunderstood the reason for selection of the case and was under the impression that the AO was only required to examine the source of cash deposited in the bank account during the Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 14 demonetization period which is falling in the financial year relevant to next assessment year. The CBDT has issued various Instructions in respect of cash deposited during the demonetization period and as per the Instructions the Assessing Officer is required to verify whether the cash deposited during the demonetization is out of cash in hand of earlier year. Since the assessment completed by the Assessing Officer is in consonance with various Instructions issued by the CBDT from time to time, it cannot be said that the Assessing Officer has travelled beyond the reason for which the case was selected for scrutiny. Therefore, the contention raised by the appellant on this account is rejected. 5.3 It is seen from the assessment order that an addition of Rs 22.74,137/-has been made u/s.69A of the Act which represents unexplained cash deposits of Rs.8,50,000/- made in the bank account, unexplained cash in hand of Rs. 10,48,737/- shown in the Balance Sheet and unexplained debtor of Rs. 3,75,000/- appearing in the Balance Sheet. During the course of assessment proceedings, the Assessing Officer found that during the financial year the appellant had deposited cash amounting to Rs.8,50,000/- in the bank account maintained with Punjab National Bank. Accordingly, the appellant was asked to explain the source of cash deposited in the bank account vide query raised on 18.12.2018. The appellant in the submission has contended that such query was never raised by the Assessing Officer during the assessment proceedings, which can proceedings. be evident from the e However, the appellant has not submitted the details of cash deposited in the bank account along with the source of deposits in the submission made during the appellate proceedings. It is a settled legal proposition that the power of CIT(A) are co-terminus with that of the Assessing Officer and therefore, during the appellate proceedings the appellant was given an opportunity to furnish the source of cash amounting to Rs. 8,50,000/- deposited in the bank account. Inspite of giving an opportunity, the appellant has not submitted the evidence of source of cash amounting to Rs. 8,50,000/- deposited in the bank account during the financial year relevant to the Assessment Year 2016-17. The appellant has submitted a copy of cash book and on perusal of the same it is seen that the appellant has credited every month systematically around Rs. 1 lakh and has shown narration as 'commission received without adducing any evidence in support of the Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 15 same. It is also seen that the Gross commission received shown by the appellant is around Rs. 4 lakh only in two previous years. Under these circumstances it is beyond understanding that how come appellant is showing commission received in cash amounting to Rs. 10 lakh plus or so in the year under consideration. The copy of Balance sheet filed also shows that to justify the cash received the appellant has reduced Sundry Debtors balance without giving any documentary evidences in support of it. There are negligible withdrawals have been shown by the appellant against the commission received in cash which creates doubt about the genuineness of the said translation. It is seen from the Profit and Loss Account furnished by the appellant during the assessment proceedings that the appellant is a commission agent and has shown gross commission receipt of Rs. 4,45,625/- and after claiming expenditure, offered net receipt of commission at Rs.2,41,775/- as income and whereas, the appellant had deposited cash amounting to Rs.8,50,000/- in the current account maintained with Punjab National Bank during the financial year 2015-16. This clearly indicates that the cash deposits are not out of commission received but from some other sources. If the cash deposits are made out from known sources, the appellant could have furnished the details during the appellate proceedings, however inspite of giving an opportunity to furnish the details, the appellant kept silent on the source of cash deposited in the bank account. Further, the appellant was asked to furnish the Balance Sheet for the year ended 31.03.2015 in order to verify whether the appellant had shown any advances or debtors in the financial year prior to the impugned assessment year, in response to that, the appellant has furnished the computer generated Balance Sheet without adducing any evidences to whether the same was filed alongwith the return of income. The A.O. has recorded his specific findings in the assessment order that in the previous year there were no sundry debtors shown by the assessee in her books of account. Therefore, in the absence of any cogent submissions/explanation or details, there is no reason to differ from the finding of the Assessing Officer. 5.4 In the submission, the appellant has also relied upon the decision of Hon'ble Delhi High Court in the case of CIT v. Anoop Jain and Hon'ble Karnataka High Court decision in the case of CIT v. Pangariya Nandkishore Suvalalji and contended that no additions can be made in her case. In the case of Anoop Jain the issue was that there were some credits in his bank account which was explained as receipt sales proceeds was not accepted by the AO and in the case of Pangariya Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 16 Nandkishore Suvalalji the AO had not accepted that the cash deposits made in the bank account were out of sale of agricultural products. The appellate authorities deleted the addition stating that the assessee has explained the source of cash credits and therefore no addition is warranted, which was confirmed by the Hon'ble High Court. In the case of the appellant, the appellant failed to submit the source of cash deposited in the bank account with supporting evidence and therefore, the Hon'ble High Court decisions relied upon by the appellant cannot be applied in this case. Therefore, the addition made on account of cash deposited in the bank account amounting to Rs.8,50,000/- by the Assessing Officer is confirmed. 5.5 The second amount added to the total income is the difference between opening cash and closing cash appearing in the Balance Sheet. During the assessment proceedings, the Assessing Officer found that the cash in hand of the appellant as on 31.03.2015 was at Rs.12,45,770/- as against the opening cash in hand of Rs.23,150/-. During the assessment proceedings the Assessing Officer requested the appellant to provide the source of increase in cash in hand and as the appellant had not given any satisfactory explanation, the difference of cash in hand of Rs. 10,48,737/- after adjusting the cash income was added to the total income. During the appellate proceedings the appellant stated that the Assessing Officer has ignored the receipts from advances given to some persons during the year under consideration and therefore no addition can be made. However no details of these advances were furnished along with the submission made during the appellate proceedings. During the appellate proceedings, the appellant was requested to provide the details of cash advances received back and deposited in the bank account. Inspite of providing sufficient opportunity, the appellant has not furnished the details of the alleged amount of cash deposits received back by the appellant in cash. The appellant is a commission agent and the net commission received by the appellant is only Rs.2,41,775/- and this receipt has been considered by the Assessing Officer as cash receipt and effect is given for working out the cash in hand as on 31.03.2016. The appellant has stated that she had sufficient capital to prove that the cash in hand as on 31.03.2016 is genuine. This explanation is not acceptable for the reason that the appellant has not disputed the opening cash in hand and also the appellant has not submitted the explanation as to how the cash in hand at Rs. 12,45,770/- has been arrived at the end of financial year. In this case the assessment was Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 17 selected for scrutiny on the basis of the huge amount of cash deposited during the demonetization period and therefore showing the large cash in hand in earlier assessment year was shown with an intention to give the source of cash deposits made during demonetization period. Since the appellant has failed to reconcile the cash in hand along with supporting evidence, the difference of cash in hand added to the total income amounting to Rs. 10,48,727/- is confirmed. 5.6 The third addition is on account of sundry debtors of Rs.3,75,400/-. It is seen from the assessment order that the Assessing Officer made the addition on the ground that in earlier assessment year the appellant had not shown any sundry debtors in the Balance Sheet. Merely on the ground that the appellant had not shown the sundry debtors in the earlier assessment year, the addition cannot be made in the subsequent assessment year. In this case the appellant has filed Profit and Loss Account and the gross receipts as per the Profit and Loss Account is Rs.4,45,625/-. Since the gross receipts exceeds sundry debtors shown in the Balance Sheet, the Assessing Officer cannot add the sundry debtors without bringing into record any evidence to prove that the sundry debtors shown in the Balance Sheet is non-genuine. Accordingly, the addition made on account of sundry debtors amounting to Rs.3,75,400/- is deleted. 6. In the result, the appeal is partly allowed. 8. Aggrieved with that order of the ld. CIT(A) the assessee filed the present appeal. To support the various grounds so raised by the assessee, ld. AR of the assessee, has filed the written submissions which reads as follows : Brief facts of the case are that assessee is an individual and had filed Return of Income for the year under consideration on 30.03.2018 declaring total income at Rs.2,41,775/-. Subsequently, case of assessee was selected for Limited scrutiny under CASS on following reason: “Cash deposit for demonetization period (9th November to December) is reported as per SFT reporting, no return was filed for preceding assessment year and for current year, return filed after Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 18 7.11.2016.” Assessee furnished various details and information as sought by ld.AO during the course of assessment proceedings. After perusing such details, ld.AO completed assessment by making three additions, i.e. on account of (i) Cash deposit of Rs,8,50,000/-, (ii) Rs.10,48,737/- being excess of closing cash in hand over opening balance of cash in hand (plus net income for the year) by alleging the same as undisclosed income and (iii) Rs.3,75,400/- being debtors balance on the ground that there were not debtors in preceding year. Aggrieved of the additions so made, assessee preferred appeal before ld.CIT(A), who partly allowed relief and therefore present appeal is preferred against the additions sustained by ld.CIT(A). With this background, ground-wise submission is made as under: Grounds of Appeal No.1 & 2: In ground of appeal No.1, assessee has challenged the action of ld.AO in making additions of Rs.8,50,000/- and Rs.10,48,737/- on account of cash deposited in bank and excess cash in hand respectively, none of which was covered by the reason for selection of Limited scrutiny. Whereas in ground of appeal No.2, assessee has challenged the action of ld.AO in making addition of Rs.8,50,000/- being cash deposits made during the year under consideration prior to even announcement of Demonetization (which again is not in the scope of reason for limited scrutiny). Since both the grounds of appeal are interconnected, the same are canvassed together for the sake of convenience. In this regard, as stated above, reason for selection of scrutiny as stated above, is reproduced again for the sake of ready reference (APB 4-5): “Cash deposit for demonetization period (9th November to December) is reported as per SFT reporting, no return was filed for preceding assessment year and for current year, return filed after 7.11.2016.” From perusal of above, it is evident that, basically case was selected for scrutiny assessment to examine source of cash deposit made during demonetization period as Return of income of A.Y. 2016-17 was filed after 7.11.2016. During the course of assessment proceedings, ld.AO conveyed that information was received that assessee has deposited cash in following bank accounts: Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 19 Sl. No. Name of Bank Bank Account No. Sum deposited 1. Punjab National Bank 2967000100284199 16,000/- 2. Punjab National Bank 7571000100018763 7,27,000/- 3. Punjab National Bank 7571002100002205 4,55,500/- In response to above, it was explained by assessee the only cash worth Rs.4,55,500/- was deposited in her bank account during demonetization period. Ld.AO also made direct enquiries from bank u/s 133(6) and concluded that (page 3 para 2 of Assessment order) : “I have gone through the submission furnished by the A/R on e proceedings and on verification of the bank statements it reveals that during the demonetization period the cash amounting to Rs.7,27,000/- deposited in PNB saving bank account bearing no.75710001000 does not belong to the assessee.” Thus, ld.AO admitted that cash worth Rs.4,55,500/- and Rs.16,000/- only was deposited by assessee during demonetization period. Also, ld.AO has discussed the details sought and furnished by assessee, wherein no discrepancy whatsoever has been pointed out. Thereafter, the learned AO at para 3 of page 3 of the assessment order has observed that: “ Further, on 18.12.2018 some additional queries were raised and the assessee was required to submit her explanation on the issue till 20.12.2018 in respect of cash deposited of Rs. 8.50 lacs, commission income, cash in hand and sundry debtors. But on the fixed date of hearing, no explanation has been submitted by the assessee which itself proves that she had nothing to submit in the matter and accepted the discrepancies which were noticed and communicated to the assessee on 18.12.2018”. In this regard, it is submitted that, no notice dated 18.12.2018 as stated above, was communicated to the assessee, which is evident from the screenshot of Income Tax portal of assessee, where in E- proceeding Window (APB 39), no notice dated 18.12.2018 is seen and after notice dated 4.12.2018, assessment order is appearing. However, ld.AO has completed assessment on the basis of such additional queries stated to have been raised vide aforesaid notice dated 18.12.2018, which was not communicated and thus without providing assessee with opportunity of being heard. Therefore, addition made on account of cash deposit of Rs.8,50,000/- and Excess Cash of Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 20 Rs.10,48,737/- vide assessment order passed without communicating show cause notice, i.e. without giving opportunity is not in accordance with law. It is further submitted that cash worth Rs.8,50,000/- was deposited by assessee during the year under consideration in his bank account no. 2967000100284199 with PNB on following dates: Date Amount 05/02/2016 4,00,000/- 02/10/2015 1,10,000/- 06/10/2015 1,60,000/- 02/09/2015 1,80,000/- 8,50,000/- From perusal of above, it is evident that cash deposits of Rs.8,50,000/- as have been added by ld.AO, were made by assessee even prior to demonetization and cannot be treated to have been covered by the scope of Limited Scrutiny, which was initiated solely for the reason that assessee deposited cash during demonetization period and filed Return of Income for the year under consideration after 9/11/2016. Your honours would appreciate that what the ld.AO has added is cash deposits made from September 2015 to February 2016, which cannot, by any stretch of imagination be treated as with intention to explain source of deposits made in demonetization. For this reason also, addition of Rs.8,50,000/- cannot be covered by scope of “Limited Scrutiny” and ld.AO has exceeded his jurisdiction in making such addition without converting Limited Scrutiny to Complete Scrutiny, which can be done only after seeking approval from designated authority. Apart from this, ld.AO by observing that assessee had opening cash balance of Rs.23,150/- as on 31.03.2015 and after addition of surplus of Rs.1,73,883/-, it comes to Rs.1,97,033/- as against which assessee has shown closing cash in hand of Rs.12,45,770/-, alleged that assessee had excess undisclosed cash of Rs.10,48,737/- and made addition. Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 21 In this regard, ld.CIT(A) has confirmed the addition by observing that ld.AO has sought information related to the asset side of the Balance Sheet which includes cash in hand and sundry debtors in order to verify whether the appellant filed Return of Income belatedly to build an explanation for cash deposits made in bank during demonetization. Your honours would appreciate that it is an admitted fact that assessee deposited cash worth Rs.4,55,500/- only during demonetization period and therefore, scope of enquiry to be made by ld.AO for A.Y. 2016-17 was restricted to verify cash to this extent only and enquiries made beyond that are definitely outside the scope of Limited Scrutiny. Whereas in the instant case, ld.AO has been silent about cash deposit of Rs.4,55,500/- and rather has conducted other enquiries, which are in the nature of complete Scrutiny, i.e. cash of Rs.8,50,000/- deposited even prior to demonetization (which cannot in any way be treated as connected with deposits made during demonetization) and closing cash in hand worth Rs.10,48,737/- At this juncture, kind attention of your goodself is invited to the CBDT Instruction No.05/2016 dated 14.07.2016 (APB 40-42) which was issued in partial modification to Instruction No.20/2015 dated 29.12.2015 defines the “Direction regarding scope of enquiry in cases under “Limited Scrutiny” selected through CASS 2015 & 2016”. Para 4 of such instruction clarifies that “……..in cases under Limited Scrutiny, the scrutiny assessment proceedings would initially be confined to issues under Limited Scrutiny and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon conversion of case to Complete Scrutiny after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in Limited Scrutiny. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting Complete Scrutiny in such cases.” Further, para 2 of such Instruction lays down procedure for conversion of Limited Scrutiny cases in Complete Scrutiny, which reads 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 Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 22 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.” From perusal of above, it is evident that a case selected for Limited Scrutiny can be converted in Complete Scrutiny only after following the procedure laid down and not otherwise that too with the prior approval of the Pr. CIT/CIT as the case maybe, whereas in the instant case :- - No reasonable view was formed by ld.AO regarding possibility of under assessment of income if case was not assessed under Complete Scrutiny. - No approval was sought by ld.AO from Pr. CIT/CIT/Pr. DIT/DIT, as the case may, be before conducting enquiries on the issues other than those specified under CASS. - The inquiries made by ld. AO with reference to source of cash deposited prior to demonetization and with respect to difference in closing cash in hand and opening cash in hand (plus income for the year under consideration) is also without jurisdiction in view of the fact that cash worth Rs,4,55,500/- only was deposited during demonetization and ld.AO has made addition much more than that, which is contrary to specific mandate given by CBDT in case of limited scrutiny. It is therefore submitted that ld.AO has exceeded his jurisdiction in converting Limited Scrutiny to Complete Scrutiny without following the procedure laid down by the hon’ble CBDT. In view of above, addition of Rs.8,50,000/- being made in respect of cash deposits made even prior to announcement of demonetization, cannot be treated as planned affair and not at all connected with cash deposited by assessee during demonetization in any manner, and thus outside the scope of Limited Scrutiny, deserves to be deleted out rightly. Similarly, addition of Rs.10,48,737/- made on account of difference in cash in hand is also not covered under “Limited Scrutiny” as stated above and deserves to be deleted. Ground of Appeal No.3: Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 23 In this ground of appeal, assessee has challenged the action of ld. CIT(A) in confirming the addition of Rs.10,48,737/- made by ld.AO by alleging the difference between cash in hand as on 31.03.2016 and 31.03.2015 as undisclosed cash. In this regard, it is submitted that during the course of assessment proceedings as well as in appellate proceedings before ld.CIT(A), assessee furnished copies of Commission ledger, Sales and Purchase ledger, Cash book and also explained how opening balance of Capital was arrived at. Since, closing cash in hand as shown in balance sheet as on 31.03.2016 was computed according to cash book so furnished, wherein no discrepancy whatsoever was pointed out by lower authorities, the same deserves to be accepted as such. Also, as submitted above that, since show cause notice raising queries in this regard was not communicated to the assessee, no further clarification could be given by assessee. During the course of appellate proceedings before ld.CIT(A), it was submitted that assessee had also received advances from certain parties. Also, ld. CIT(A) himself has observed that from perusal of balance sheet it is seen that debtors have reduced, which also implies that a portion of increase in cash in hand is also attributable to recovery made from debtors. It is thus submitted that assessee has duly explained the source of cash in hand available as on 31.03.2016 and addition of Rs.10,48,737/- made by ld.AO deserves to be deleted. Without prejudice to above and in the alternative, it is submitted that, as stated above that case was selected for Limited Scrutiny to examine source of cash deposits made in demonetization, which was merely Rs.4,55,500/-. In the scenario if observation of ld.CIT(A) that ld.AO has acted within the scope of Limited Scrutiny to verify if assessee has tried to build explanation for making such deposits, then too addition made beyond Rs.4,55,500/- definitely falls beyond the scope of Limited Scrutiny and deserves to be deleted. 9. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the case of the Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 24 assessee was selected for deposit of cash only. Whereas the ld. AO made the addition on the different aspect of the matter and therefore, the addition made in this case is contrary to the various case laws cited in the case laws paper book filed by the ld. AR of the assessee. It is also evidently clear from the submission placed on record that the assessee has merely deposit of cash of Rs. 4,55,500/- for which the ld. AO recorded his satisfaction and has not made any addition. But he made the addition for an amount of Rs. 22,74,137/- on account of earlier year cash on hand and sundry debtors disclosed in earlier years. Since the case of the assessee was selected for limited scrutiny under CASS “Cash deposit for demonetization period (9th November to 31st December) is reported as per SFT reporting, no return was filed for preceding assessment year and for current year, return filed after 07.11.2016”. Therefore, the addition made by the ld. AO is outside the scope of the assessment. 10. On the other hand, ld. DR supported the order of lower authorities and particularly relied upon the para 5.3 of the order of ld. CIT(A) wherein he has discussed the arguments of the Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 25 assessee. Ld. DR also submitted that the ld. Assessing Officer vide page Nos. 3 and 4 of his order also recorded that the assessee could not substantiate the cash on hand and sundry debtors as on 31st day of March and therefore, he supported the orders of lower authorities. 11. We have heard the rival contentions and perused the material placed on record. Record reveals that the reasons for selection of the case for scrutiny reads as under ; “Cash deposit for demonetization period (9th November to December) is reported as per SFT reporting, no return was filed for preceding assessment year and for current year, return filed after 7.11.2016.” On this issue the bench noted that the ld. AO vide page 3 of this order noted as under ; I have gone through the submission furnished by the A/R on e- proceeding and on verification of the bank statements it reveals that during the demonetization period the cash amounting to Rs. 7,27,000/- deposited in PNB saving bank account bearing no. 7571000100018763 does not belongs to the assessee. The ld. AO also admitted that cash worth Rs. 4,55,500/- and Rs. 16,000/- only was deposited by the assessee and has examined that aspect also. Having this fact before him he went on to examine the other issue. But before doing so ld. AO need to convert the scope of limited scrutiny into complete if he found to do Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 26 so after taking appropriate approval for the same. Having not done the ld. AO proceeded to examine other issues which are beyond the scope of the limited scrutiny. Perusal of the assessment reveals that ld. AO at para 3 of page 3 of the assessment order has observed that: “ Further, on 18.12.2018 some additional queries were raised and the assessee was required to submit her explanation on the issue till 20.12.2018 in respect of cash deposited of Rs. 8.50 lacs, commission income, cash in hand and sundry debtors. But on the fixed date of hearing, no explanation has been submitted by the assessee which itself proves that she had nothing to submit in the matter and accepted the discrepancies which were noticed and communicated to the assessee on 18.12.2018”. On this issue ld. AR of the assessee submitted that, no notice dated 18.12.2018 as stated, was communicated to the assessee, which is evident from the screenshot of Income Tax portal of assessee, where in E-proceeding Window (APB 39), no notice dated 18.12.2018 is seen to have been issued. The screenshot shows that after notice dated 4.12.2018, assessment order is appearing. However, ld.AO has completed assessment on the basis of such additional queries stated to have been raised vide aforesaid notice dated 18.12.2018, which was not communicated. Thus without providing assessee with opportunity of being heard Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 27 the ld. AO made the addition on account of cash deposit of Rs.8,50,000/- and Excess Cash of Rs.10,48,737/- vide assessment order passed without communicating show cause notice, i.e. without giving opportunity is not in accordance with law. As it was submitted in the written submission that cash worth Rs.8,50,000/- was deposited by assessee during the year under consideration in his bank account no. 2967000100284199 with PNB on following dates: Date Amount 05/02/2016 4,00,000/- 02/10/2015 1,10,000/- 06/10/2015 1,60,000/- 02/09/2015 1,80,000/- 8,50,000/- From perusal of above, it is evident that cash deposits of Rs.8,50,000/- as have been added by ld.AO, were made by assessee even prior to demonetization and cannot be treated to have been covered by the scope of Limited Scrutiny, which was initiated solely for the reason that assessee deposited cash during demonetization period and filed Return of Income for the year under consideration after 9/11/2016. As is evident from the record Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 28 that the ld.AO has added cash deposits made from September 2015 to February 2016, which cannot, by any stretch of imagination be treated as with intention to explain source of deposits made in demonetization. For this reason also, addition of Rs.8,50,000/- cannot be covered by scope of “Limited Scrutiny” and ld.AO has exceeded his jurisdiction in making such addition without converting Limited Scrutiny to Complete Scrutiny, which can be done only after seeking approval from designated authority. Leaving a side the ld. AO noted that assessee had opening cash balance of Rs.23,150/- as on 31.03.2015 and after addition of surplus of Rs.1,73,883/-, it comes to Rs.1,97,033/- as against which assessee has shown closing cash in hand of Rs.12,45,770/-, alleged that assessee had excess undisclosed cash of Rs.10,48,737/- and made addition. On this issue ld. CIT(A) confirmed the addition by observing that ld.AO has sought information related to the asset side of the Balance Sheet which includes cash in hand and sundry debtors in order to verify whether the appellant filed Return of Income belatedly to build an explanation for cash deposits made in bank during demonetization. As is not disputed that assessee deposited cash worth Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 29 Rs.4,55,500/- only during demonetization period and therefore, scope of enquiry to be made by ld.AO for A.Y. 2016-17 was restricted to verify cash to this extent only and enquiries made beyond that are definitely outside the scope of Limited Scrutiny. Whereas in the instant case, ld.AO has been silent about cash deposit of Rs.4,55,500/- and rather has conducted other enquiries, which are in the nature of complete Scrutiny, i.e. cash of Rs.8,50,000/- deposited even prior to demonetization (which cannot in any way be treated as connected with deposits made during demonetization) and closing cash in hand worth Rs.10,48,737/-. Therefore, we considered the CBDT Instruction No.05/2016 dated 14.07.2016 (APB 40-42) which was issued in partial modification to Instruction No.20/2015 dated 29.12.2015 defines the “Direction regarding scope of enquiry in cases under “Limited Scrutiny” selected through CASS 2015 & 2016”. Para 4 of such instruction clarifies that “……..in cases under Limited Scrutiny, the scrutiny assessment proceedings would initially be confined to issues under Limited Scrutiny and questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 30 conversion of case to Complete Scrutiny after following the procedure outlined above, the AO may examine the additional issues besides the issue(s) involved in Limited Scrutiny. The AO shall also expeditiously intimate the taxpayer concerned regarding conducting Complete Scrutiny in such cases.” Further, para 2 of such Instruction lays down procedure for conversion of Limited Scrutiny cases in Complete Scrutiny. Thus, a case selected for Limited Scrutiny can be converted in Complete Scrutiny only after following the procedure laid down and not otherwise that too with the prior approval of the Pr. CIT/CIT as the case maybe, whereas in the instant case we note that no reasonable view was formed by ld.AO regarding possibility of under assessment of income if case was not assessed under Complete Scrutiny having not done so he has not sought the necessary approval from Pr. CIT/CIT/Pr. DIT/DIT, as the case may, be before conducting enquiries on the issues other than those specified under CASS. The inquiries made by ld. AO with reference to source of cash deposited prior to demonetization and with respect to difference in closing cash in hand and opening cash in hand (plus income for the year under consideration) is also without jurisdiction in view of the fact that Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 31 cash worth Rs,4,55,500/- only was deposited during demonetization and ld.AO has made addition much more than that, which is contrary to specific mandate given by CBDT in case of limited scrutiny. Thus, we are of the considered view that ld.AO has exceeded his jurisdiction in converting Limited Scrutiny to Complete Scrutiny without following the procedure laid down by the hon’ble CBDT. Based on this observations addition of Rs.8,50,000/- being made in respect of cash deposits made even prior to announcement of demonetization, cannot be treated as planned affair and not at all connected with cash deposited by assessee during demonetization in any manner, and thus outside the scope of Limited Scrutiny, deserves to be deleted. Similarly, addition of Rs.10,48,737/- made on account of difference in cash in hand is also not covered under “Limited Scrutiny” as stated above and deserves to be deleted. In terms of these observations grounds no 1 to 3 raised by the assessee are allowed and ground no. 4 being general does not require our finding. In the result, Miscellaneous Application as well as appeal of the assessee is allowed. Order pronounced in the open court on 21/08/2025. Printed from counselvise.com MA No. 21/JP/2025 Gita vs. ITO 32 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 21/08/2025 *Ganesh Kumar, PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Smt. Gita, Bharatpur 2. izR;FkhZ@ The Respondent- ITO, Ward-2, Bharatpur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {MA No. 21/JP/2025} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "