SANDEEP P. PARIKH , MUMBAI V. PR. CIT -16, MUMBAI

ITA 678/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3433 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Appeal Filed On: 29-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ TOPRANI
• Keywords: Revision of order; Depreciation; TDS; Set aside; Capital Gains
• Section: 147; 263; 143(3); 142(1); 80HHC; 143(1); 143(2); 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 678/Mum/2021 (A.Y: 2015-16) Sandeep P. Parikh B-6, Anand Bhavan, Bajaj Road, Vile Parle (W), Mumbai – 400056 Vs. Pr. CIT- 16 Room No. 437, 4 th Floor, Aayakar bhavan, MK Road, Mumbai – 400020. ./ज आइआर ./PAN/GIR No. : AAJPP8447R Appellant .. Respondent Appellant by : Shri. Pankaj Toprani.AR Respondent by : Shri Ajay. K. Srivastava.DR Date of Hearing 24.03.2022 Date of Pronouncement 20.04.2022 आद श / O R D E R PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the Principle Commissioner of Income Tax (Pr.CIT)-16, Mumbai passed U/sec 263 of the Act, 1961. At the time of hearing, the Ld.AR of the assessee submitted that there is a delay in filing the appeal before the Hon’ble Tribunal due to Covid-19 pandemic. The assessee has filed an affidavit for condonation of ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 2 - delay and we find the facts mentioned in the affidavit are reasonable and acceptable. The Ld.DR has no specific objections. Accordingly, we condone the delay and admit the appeal.The assessee has raised the following grounds of appeal: 1. The Ld. Principal Commissioner of Income tax - 16, (hereinafter referred to as the Principal CIT) erred in law and on facts in holding that the assessment order dated 28-11-2017 passed by the Assessing Officer is erroneous in so for as it is prejudicial to the interests of revenue thereby cancelling the same with the direction to pass fresh assessment order. 2. The Principal CIT erred in law and on facts in not appreciating that the assessment order was not erroneous as a result of which the same cannot be revised under section 263 of the I.T. Act. 3. The principal CIT failed to appreciate that where a case is selected for a limited scrutiny under CASS, as per CBDT Instruction No 20 of 2015 dated 291h December 2015 , and then assessment order is passed, the same cannot be revised under section 263 of the I.T. Act. 4. The Principal CIT failed to appreciate that the appellant who is a Chartered Accountant who was receiving remuneration from his CA Firm, expenses relating to car , depreciation ,travelling expenses etc. are allowable as deductible expenses from remuneration received from the firm. 5. The Principal CIT failed to appreciate that revision ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 3 - jurisdiction u/s 263 cannot be exercised on debatable issues. 6. The Principal CIT failed to appreciate that the order passed by the AO was not unsustainable in law to invoke jurisdiction u/s 263 of the Act. 7. The Principal CIT failed to appreciate that assessment order cannot be revised u/s 263 of the I.T. Act if another view on the particular issue is also available. 8. The Principal CIT failed to appreciate that assessment order cannot be revised u/s 263 of the I.T. Act merely because the AO has not discussed the allowability of expenses by him against remuneration received from the firm assessable u/s 28(v) of the Act. 9. The Principal CIT erred in law and on fact in invoking jurisdiction u/s 263 of the I.T. Act relying on certain court decisions which are distinguishable on the facts. The Appellant prays that reliefs on the aforesaid grounds be allowed and the order passed by the Principal CIT be quashed accordingly. The Appellant craves leave to add, to alter, amplify, modify and delete all or any of the aforesaid grounds at or before the hearing. 2. The brief facts of the case that the assessee is a chartered accountant and has field the return of income for the A.Y 2015-16 on 28.07.2016 disclosing a total income of Rs.27,57,220/- and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for limited scrutiny under CASS and notice u/s 143(2) and 142(1) ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 4 - are issued. In compliance to the notice, the ld. AR of the assessee appeared from time to time and furnished the details and the case was discussed. The assessee has filed the return of income disclosing the income from house property and income from business/profession and income from other sources. The assessing officer(A.O) has accepted the returned income and passed the order u/s 143(3) of the Act dated 28.11.2017 with assessed income of 27,57,220/- Subsequently, the Pr.CIT on perusal of the records and the assessment order found that the assessee is receiving the remuneration from the partnership firm and has claimed expenses with respect to depreciation, car maintenances, electric expenses, travelling expenses amounting to Rs.17,31,133/- and the net income from partnership firm was disclosed at Rs.6,68,867/- and therefore such deductions cannot be allowed u/s 28(v) of the Act and remuneration received by the partner is taxable and the claim has to be disallowed and there is an under assessment of income of Rs. 17,71,133/- and issued the revision notice. In compliance, the assessee has filed the submissions referred at Para 3 of the revision order. ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 5 - 3. The contentions raised before the Pr.CIT that the order passed by the A.O is not erroneous and prejudicial to the interest of revenue. The assessee has filed the elaborate submissions and complied with the notices. The Ld. AR submitted that the case was selected for limited scrutiny and the basis/ reasons of limited scrutiny has been examined and verified by the A.O. But the Pr. CIT invoked the provisions of Sec. 263 of the Act r.w. explanation 2 and observed that the A.O has not applied his mind on the expenses claimed by the assessee and set aside the order of the A.O. Observing as erroneous and prejudicial to the interest of the revenue and directed the A.O. to pass afresh assessment order after giving adequate opportunity to the assessee and the Pr.CIT has passed order u/s 263 of the Act dated 20.02.2020. Aggrieved by the order, the assessee has filed an appeal before the Hon’ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that the Pr. CIT erred in directing the A.O to pass a fresh assessment order overlooking the fact that the case was selected for limited scrutiny. The A.O. has considered the reasons of limited scrutiny and ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 6 - accepted the income. The Ld.AR substantiated the submissions with judicial decisions and paper book and prayed for allowing the appeal. 5. Contra, the Ld. DR supported the order of the Pr. CIT and emphasized on the fact of claim of deductions not verified by the A.O. 6. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue that the Pr.CIT has set aside the order of the AO on the ground that it is erroneous and prejudicial to the interest of the revenue as the A.O has not applied his mind in respect of claim of deduction of expenses from the remuneration received from the partnership firm. The Ld. AR submitted that the case was selected for limited scrutiny and the scope of limited scrutiny is limited to the extent of facts has been disclosed. The Ld. AR demonstrated the page 31 of the paper book with the notice of scrutiny. On perusal, we find notice U/sec143 (2) of the Act dated 23.09.2017 mentioned that “whether investment and income relating to foreign financial interest are duly disclosed”. On this issue, the A.O has issued the notice u/s 142(1) of the ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 7 - Act referred at page 29 of the paper book in particular item 8 where it is mentioned as under: “Please explain regarding investment and relating to foreign financial interest” 7. In compliance to the notice u/sec142(1) of the Act, the Ld.AR demonstrated reply filed on 27-11-17 dealt at page No. 35 of the paper book and at Para 8, the assessee has filed the explanations on the foreign investments and the A.O. has acknowledged the facts. Whereas, under revision proceedings, the issue raised by the Pr. CIT is on other issues. The Pr. CIT cannot travel beyond the limited scrutiny issues and the Ld.AR relied on the judicial decisions on the scope of the limited scrutiny as under: 1. M/s. Su-Raj Diamond Dealers Pvt Vs Pr CIT, 203 TTJ 137. 2. Jeewanlal (1929) Ltd Vs. ACIT, 108 ITR 407. 3. Malbar Industrial Co. Ltd, 109 taxan 66. 4. CIT Vs. Max India Ltd, (SC), 2008, 166 taxman 188 5. Cit Vs. Nirav Modi, 2016, 71 taxmann.com 272. 6. CIT Vs. M/s Shreepati Holdings & Finance Pvt Ltd. 1879 of 2013. 7. ACIT Vs. Delite Enterprises (P) Ltd, 2011, 135 TTJ 663 8. G. Chella Krishna Vs. ACIT, 2018 168 ITD 117. 8. The Ld.AR contentions are that the case was selected for limited scrutiny and as per the limited ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 8 - scrutiny guidelines and the reasons were informed to the assessee. The Ld. AR has demonstrated the notice issued u/s 143(2) and 142(1) of the Act along with questionnaire and compliance to the notice with requisite details which cannot be disputed. When the assessee has complied with the directions issued u/s 142(1) of the Act, the Pr.CIT cannot observe that the order passed by the A.O is erroneous and the income has escaped assessment. 9. TheLd.AR demonstrated the income tax return ITR-3 filed electronically referred at page 3 where the assessee has clearly disclosed the financial claims in the return of income filed. The assessee in compliance to the notice issued in the assessment proceedings has filed Audited financial statements and detailed explanations. The A.O has accepted the fact of limited scrutiny and the genuineness of the case and the expenditure claimed is not doubted. In the limited scrutiny, the A.O.s scope is limited to the extent of recorded reasons for selection of scrutiny and the assessing officer has examined the case. Therefore the order passed by the Pr. CIT is devoid of merits. We find the Co-ordinate bench of the Honble Tribunal in Mrs ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 9 - Sonali Hemant Bhavasar Vs Pr.CIT-29 in ITA.No.742/M/2019 dated 17-05-2019 has dealt on the scope of limited scrutiny and the revisionary jurisdiction at page 7 Para 6 of the order, which is read as under: 6. After hearing both the parties and perusing the materials before us, we observe from the notice issued under section 143(2) of the Act for limited scrutiny dated 19.09.2016 and find merits in the contentions of the assessee that the said limited scrutiny can not be expanded unless the AO converted it into complete scrutiny with the approval of Ld. Pr. CIT and if the AO after considering the submissions of the assessee does not come to the conclusion of potential escapement the Ld. Pr. CIT can not hold the order to be erroneous on the ground that AO ought to have reached to such conclusion. The case of the assessee is squarely covered by the decision of Kolkata Bench in the case of Sanjeev Kr. Khemka vs. Pr. CIT in ITA No.1361/Kol/2016 A.Y. 2011-12 dated 02.06.2017 wherein the co-ordinate bench of the Tribunal has held 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 and so the same is with the order passed u/s 263 of the Act. It is the further contention of the assessee that in the items which are not subject matter of AIR cannot subject matter of scrutiny. ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 10 - Such matters include salary of the assessee, loans & interest on loans, payment of LIC, Commission & brokerage income etc. It is the case of the assessee that in the assessment order passed u/s 143(3) of the Act, the AO has travelled beyond the points of the AIR on the basis of which the case of scrutiny was selected under CASS module. It is the plea of the assessee that when no addition/disallowance can be made beyond the points mentioned in AIR in the assessment proceedings then same is the case with proceedings initiated u/s 263 of the Act. 4.1 The first aspect which needs to be examined is as to whether the assessee is entitled to challenge the validity of initiation expanded in the proceedings u/s 143(3) of the Act in the present appeals in which he has challenged the validity of expanded order passed u/s 263 of the Act covering the points which are not part of the AIR. The ld. Counsel for the assessee submitted before us that it is open to an assessee in an appeal against the order u/s 263 of the Act which seeks to revise an order passed u/s 143(3) of the Act, to challenge the validity of the expansion of order passed u/s.143(3) of the Act covering the points which are not part of the AIR. In this regard we find that Lucknow Bench of Hon'ble ITAT in the case of Inder Kumar Bachani (HUF) vs ITO 99 ITD 621 (Luck) and ITAT Mumbai 'G' Bench in the case of M/s. Westlife Development Ltd. Vs Principal C.I.T. in ITA NO.688/Mum/2016 have taken a view that when an Assessment order passed u/s 147 of the Act was illegal the Ld.CIT cannot invoke the jurisdiction u/s 263 of the Act against such void or non-est order. In the second decision cited the Hon'ble Mumbai bench of the Tribunal has specifically framed the following questions :- "1.Whether the assessee can challenge the validity of an assessment order during the appellate proceedings pertaining to examination of validity of order passed u/s 263? 2. Whether the impugned assessment order passed u/s 143(3) dated 24-10- 2013 was valid in the eyes of law or a nullity as has been claimed by the assessee? ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 11 - 3. If the impugned assessment order passed u/s 143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non est assessment order?" On question no. 1 and 3 which is relevant to the present case the Hon'ble Mumbai bench of the Tribunal has taken the view that when the original assessment proceedings are null and void in the eyes of law for want of proper assumption of jurisdiction then such validity can be challenged even in collateral proceedings. The Mumbai bench took the view that the proceedings u/s 147 of the Act are primary proceedings and proceedings u/s 263 of the Act are collateral proceedings and in such collateral proceedings, the validity of initiation of the original proceedings u/s 147 of the Act can be challenged. The Mumbai bench of the Tribunal in this regard has placed reliance on several decisions, the principal decision being that of the Hon'ble Supreme Court in the case of Kiran Singh & Ors. V. Chaman Paswan & Ors. [1955] 1 SCR 117(SC) wherein the Hon'ble Supreme Court observed as follows :- "It is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties." Now coming to the facts of the instant case, we find that the instant case was selected on the basis of AIR Information as evident from the order of AO under section 143(3) of the Act. There is also no whisper in the order of the AO for expanding the scope of limited scrutiny after obtaining the permission from the Administrative CIT. The ld. DR has also failed to bring anything contrary to the argument of the ld. AR. Therefore in our considered view the scrutiny should have been limited only ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 12 - to the information emanating from the AIR. Admittedly, the assessee has claimed to have filed an appeal before Ld. CIT(A) challenging the jurisdiction exceeded by the AO while framing the assessment order u/s 143(3) of the Act. We find that the impugned issue being legal in nature and goes to the root of the matter therefore we are inclined to proceed with this issue first by holding that, from the above submission and after examining of the records, we find that the Ld. CIT in his impugned order u/s 263 of the Act has exceeded his jurisdiction while holding the order of AO as erroneous in so far prejudicial to the interest of Revenue. In view of the above we hold that the ld. CIT has in his order u/s. 263 of the Act exceeded the jurisdiction by holding the order of AO as erroneous in so far as prejudicial to the interest of Revenue on those items which are not emanating from the AIR. Thus, we are inclined to adjudicate only those matters which are emanating from the AIR as discussed above. 4.2 The assessment was framed by AO for the A.Y. 2011-12 under section 143(3) of the Act vide order dated 29.03.2014 after making certain additions/ disallowances to the total income of assessee. Subsequently, Ld. CIT u/s 263 of the Act observed certain errors in the order of AO, therefore, he was of the view tht the order passed by the AO is erroneous in so far as prejudicial to the interest of Revenue on account of no proper-enquiry before completing assessment as discussed below:- (i) The assessee has deposited in its bank account in HDFC bank Goa for ₹17.56 lakh and out of that there was a withdrawal only for ₹1.50 lakh but the AO has made the addition only to the extent of ₹4 lakh on account of unexplained cash credit. Therefore, certain unexplained cash credit of the assessee has been under assessed by the AO. ii) There was another bank account of the assessee in HDFC bank in Goa where total deposits of Rs. ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 13 - ₹19,31,750/- was made by the assessee but the AO found credited amount of Rs. ₹5,76,056/- only. Thus, total deposits made in the bank were not brought to tax; (iii) There was transactions of ₹3 76,225/- through credit card which was not explained and thus the entire amount was liable to be added to the total income of assessee but the AO has added only a sum of ₹2,98,225/- to the total income of assessee. Thus, there was under assessment of income by ₹78,000/-; (iv) The assessee during the year has sold property for ₹36 lakh and exemption of ₹19,74,763/- was claimed by assessee u/s. 10(38) of the Act. This fact was not verified by the AO at the time of assessment proceedings. In view of above, the Ld. CIT found the order of AO is erroneous in so far as prejudicial to the interest of Revenue and therefore show-cause notice was issued u/s. 263 of the Act vide dated 13.10.2015 for the clarification of the above transactions. In compliance thereto, the assessee submitted as under : i) The deposit in HDFC bank account No. 03151930000609 was duly reflected in his IT return. Therefore, no cause has happened to the Revenue which is prejudicial to the interest of Revenue. ii) The deposit of ₹19,73,750/- was duly reflected in the IT return and therefore there was no error which is prejudicial to the interest of Revenue. iii) Regarding the credit card payment, the addition on account of undisclosed cash deposit has already been added by the AO and therefore there is no error causing prejudice to the interest of Revenue . iv) There was no sale of the property and therefore no exemption u/s10(38) of the Act was claimed. ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 14 - However the Ld. CIT after considering the submission of assessee has held the order of AO is error and prejudicial to the interest of Revenue by observing as under:- "I have carefully considered the issues with specific reference to the relevant assessment records as well as written submission furnished by the A/R. The AO has not taken cognizance of the following issues, despite being apparent from record:- (1) Addition of Rs. 4 lakhs only was made against total cash deposit of Rs.17,56,000/- without taking any explanation from the assessee. (2) The balance deposits in another account with HDFC, Porvorim, Goa was not considered in assessment. (3) Interest income from all savings accounts and FDRs was not considered at the time of assessment. (4) Submission of assessee regarding explanation of credit card payment of Rs.3,76,225/- was partly accepted in assessment without proper verification. (5) Although a salaried person, the assessee's bank account reflect huge transactions/transfer entries, which required further investigation. (6) Long term capital gain of Rs.19,74,763/- was not properly verified. (7) Loan transactions and interest on loans required proper verification. (8) Salary was received in cash without TDS, which should have been viewed adversely. (9) LIC premium was paid for a minor but assessee's capital account did not reflect the same. (10) Lastly, the assessee declared income from commission/brokerage in the previous two AYs but no such income was shown in this year. "An incorrect assumption of facts or an incorrect application of law will always make the order passed by the Assessing Officer erroneous. The Assessing Officer has not made proper enquiry before completing assessment regarding above issues. By not checking the ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 15 - above issues and by not making adequate enquiry the Assessing Officer has not assessed the proper income and the order has become erroneous and prejudicial to the interest of the revenue. In view of the above, the order dated 29/03/2014 passed by ACIT, Circle-43, Kolkata is found to be erroneous and prejudicial to the interest of revenue and hence it is set aside with the direction to pass fresh assessment order after examining the evidences and documents in respect of the above issues raised after giving opportunity to the assessee and in accordance with law." Being aggrieved by this order of Ld. CIT assessee is in appeal before us on the following grounds:- "(1) For that the L'd Pr. Commissioner of Income Tax erred in exercising the power of revision for the purpose of directing the AO to hold another investigation when the order passed by the AO was neither erroneous nor prejudicial to the interest of revenue. (2) For that the L'd Pr.CIT erred and exceeded jurisdiction by giving direction in respect of the matters which are subject matters of appeal before the CIT(A), therefore order passed by Pr. CIT-15 is unlawful, beyond provision of law and therefore liable to be quashed. (3) For that the L'd Pr. CIT had alleged arbitrarily irrelevant matters, factual and untrue position in the show cause notice u/s. 263 and therefore order passed by Pr. CIT-15 Kolkata u/s. 263 is nullity and liable to be quashed. (4) For that L'd Pr. CIT has wrongly assumed the jurisdiction u/s. 263 by wrongly mentioning that deposits in HDFC Goa A/c & HDFC Porvorim Goa A/c were under- assessed by the AO despite these two a/cs were disclosed in the balance sheet and deposits were explained, therefore allegation so made is bad in law and void ab-initio. ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 16 - (5) For that on the facts & in the circumstances of the case L'd Pr. CIT was not justified in initiating proceeding u/s. 263. (6) For that your petitioner craves the right to put additional grounds and/or to alter/amend/modify the present grounds before or at the time of hearing." The ld. AR before us filed two paper books which are running from pages 1 to 27 and 28 to 31. The ld. AR before us submitted that the necessary enquiries were made by the AO at the time of assessment. Thus the order of the AO cannot be held erroneous and prejudicial to the interest of Revenue on account of non enquiry whereas the ld. DR vehemently supported the order of the ld. CIT. 5. We have heard the rival contentions & perused the materials available on record. From the foregoing discussion, we find that order of AO has been treated erroneous and prejudicial to the interest of revenue on the ground that proper enquiry was not made by the AO. Therefore, Ld. CIT held that the order of AO is erroneous and prejudicial to the interest of revenue. However, after examining the order of Authorities Below and other relevant records our observations are as follows:- a) deposit of cash of ₹17.56 lakh in HDFC bank a/c No.03151930000609 From the order or AO, we find that the AO at the time of assessment proceedings has applied his mind while determining the undisclosed income from the said bank account for Rs. 4 lacs. Thus the AO after considering the bank statements of the assessee has consciously made the addition of ₹ 4 lakh as unexplained cash credit against which assessee claimed to have filed appeal before Ld. CIT(A). Therefore, in our considered view, the allegation of Ld. CIT that proper enquiry was not made by the AO is not true. b) Deposit of cash ₹19,31,750/- in HDFC bank A/c 0315100006743 From the order of AO we find that AO has already made the addition of the entire amount as unexplained cash credit. Therefore, the allegation of the ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 17 - ld. CIT-A that the order of AO is erroneous and prejudicial to the interest of Revenue is not true. c) Credit card payment of ₹3,76,225/- From the order of AO, we find that the AO has made the addition of ₹2,78,225/- out of total credit card payment of ₹3,76,225/-. Therefore, it is clear that AO has applied his mind while framing the assessment proceedings u/s. 143(3) of the Act. Thus, the allegation of the AO in the impugned order or Ld. CIT u/s. 263 of the Act that there was no proper enquiry conducted by AO at the time of assessment proceedings is not true. d) Sale of property for consideration of ₹ 36 lakh. On perusal of AIR information which is placed on page 1 of the paper book, we find that no immovable property has been sold by assessee in the year under consideration. Besides the above, there is also no whisper in the assessment order for any addition on account of capital gains. Therefore, we find that the allegation of Ld. CIT that AO has not conducted sufficient enquiry in relation to sale of immovable property is not true. 5.1 In view of the above we find that Ld. CIT has passed impugned order u/s. 263 of the Act by holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the Act. However, we find that proper and sufficient enquiries were conducted by the AO at the time of assessment as evident from the order of AO. Therefore it cannot be concluded that no proper enquiry has been conducted by the AO at the time of assessment proceedings. The AO has taken conscious view after considering the facts and circumstances of the case and giving proper opportunity to the assessee. Thus, the view expressed by AO in the form in his assessment order cannot be replaced with the view of Ld. CIT u/s 263 of the Act. In holding so, we find support and guidance from the judgment of Hon'ble jurisdictional High Court in the case of CIT vs. M/s. J.L. Morrison (India) Ltd.(ITA No 168 of 2011) in GA No 1541 of 2012 dated 15.05.2014, wherein it was held as under:- ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 18 - "By sections 3 and 4, the Indian Income-tax Act, 1922, imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision." We also rely on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Max India Limited reported in 295 ITR 282 wherein it was held as under : "When the CIT passed the impugned order under s. 263, two views were inherently possible on the word "profits" occurring in the proviso to s.80HHC(3) and therefore, subsequent amendment of s. 80HHC made in the ITA No.1361/Kol/2016 A.Y. 2011-12 S.K. Khemka Vs. Pr. CIT- 15 Kol. Page 12 year 2005, though retrospective, did not render the order of the AO erroneous and prejudicial to the interest of the Revenue, and CIT could not exercise powers under s. 263." In view of the above proposition, and respectfully following principle laid down by the Hon'ble courts and keeping in view all these discussion, as also bearing in mind entirety of the case, we deem it fit and proper to uphold the grievance of the assessee and quash the impugned revision order as devoid of jurisdiction. The assessee gets the relief, accordingly. 6. In the result, assessee's appeal stands allowed.” 7. We have perused the letter dated 09.11.2016 addressed by the DDIT (Inv.), Mumbai to ITO-29(3)(4), Mumbai wherein the details of on money in the case of Runwal Green (shops) were given and we find that on money was determined by taking the rate @ Rs.26,000/- per sqr. ft. while agreements were for lower amounts. However, in the case of the assessee we observe that the agreement value was executed @ Rs.26,000/- per sqr. ft. Thus we find merits in the contention of the assessee that there is no question of on money as the agreement value was even higher than the maximum rate which was taken by the DDIT ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 19 - (Inv.), Mumbai to ascertain the amount of on money received by the builder. Moreover, the case of M/s. Runwal Homes Pvt. Ltd. vs. DCIT in ITA No.5621/M/2017 A.Y. 2015-16 the issue of on money has been decided in favour of the M/s. Runwal Homes Pvt. Ltd. by deleting the addition on account of on money. In view of the aforesaid facts, we are of the view that the revisionary order passed by the Ld. Pr. CIT(A) is without jurisdiction and has to be quashed on legal issue as well as on merit. Accordingly, we quash the revisionary order passed under section 263 of the Act by Ld. Pr. CIT. 8. In the result, the appeal of the assessee is allowed. Similarly in the case of M/s Su-Raj Diamond Dealers Pvt Ltd., Vs. Pr. CIT (ITA No. 3098/Mum/2019 dated 27-11-2019 has observed at page5 para 6 read as under: 6. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Admittedly, the case of the assessee was selected for limited scrutiny through CASS for two reasons viz. (i). Large other expenses claimed in the P&L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares. Insofar the fact that the case of the assessee was selected for limited scrutiny for the aforesaid reasons is concerned, the same as observed by us hereinabove is not disputed and is clearly discernible from the order passed by the Pr. CIT under Sec. 263 of the Act. In fact, we find, that the Pr. CIT in his order had categorically observed that the case of the assessee was not selected for examination on the issue relating to „closing stock‟, but was selected for limited scrutiny for the aforesaid two reasons viz. (i). Large other expenses claimed in the P&L A/c.;and (ii). Low income in comparison to High Loans/advance /Investment in shares. We find that as per the CBDT Instruction No. 20/2015, dated 29.12.2015, scrutiny in cases selected through Computer Aided Scrutiny Selection ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 20 - (CASS) is to be confined only to the specific reasons/issues for which the case has been picked up for scrutiny. In order to appreciate the issue under consideration, we deem it fit to cull out the CBDT instruction No. 20/2015, dated 29.12.2015., which reads as under: “ INSTRUCTION NO. 20/2015, DATED: 29-12-2015 29/12/2015 Subject : Scrutiny Assessments-some Important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection ('CASS') - Reg.- The Central Board of Direct Taxes ('CBDT'), vide Instruction No. 7/2014 dated 26.09.2014 had clarified the extent of enquiry in certain category of cases specified therein, which are selected for scrutiny through CASS Further clarifications have been sought regarding the scope and applicability of the aforesaid instruction to cases being scrutinized 2. In order to facilitate the conduct of scrutiny assessments and to bring further clarity on some of the issues emerging from the aforesaid Instruction, following clarifications are being made: i. Year of applicability: As stated in the Instruction No. 7/2014, the said Instruction is applicable only in respect of the cases selected for scrutiny through CASS-2014. ii. Whether the said Instruction is applicable to all cases selected under CASS: The said Instruction is applicable where the case is selected for scrutiny under CASS only on the parameters) of AIR/CIB/26AS data. If a case has been selected under CASS for any other reason(s)/parameter(s) besides the AIR/CIB/26AS data, then the said instruction would not apply. iii. Scope of Enquiry: Specific issue based enquiry is to be conducted only in those scrutiny cases which have been selected on the parameter(s) of AIR/CIB/26AS data. In such cases, the Assessing Officer, shall also confine the Questionnaire only to the specific issues pertaining to AIR/CIB/26AS data. Wider scrutiny in these cases can only be conducted as per the guidelines and procedures stated in Instruction No 7/2014 ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 21 - iv. Reason for selection: In cases under scrutiny for verification of AIR/CIB/26AS data, the Assessing Officer has to intimate the reason for selection of case for scrutiny to the assessee concerned 3. As far as the returns selected for scrutiny through CASS- 2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year-- one is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in Limited Scrutiny' or 'Complete Scrutiny' through notices issued under section 143(2) of the Income-tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: a. In 'Limited Scrutiny' cases, the reasons/issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under section 142(1) of the Act in 'Limited Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny Further, the scope of enquiry shall be restricted to the Limited Scrutiny' issues. c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'Limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs five lakhs (for metro charges, the monetary limit shall be Rs. ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for 'Complete Scrutiny' with the approval of the Pr CIT/CIT concerned. However, such an approval shall be accorded by the by the Pr. CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating Complete Scrutiny' in that particular case Such cases Shalt be monitored by the Range Head concerned The procedure indicated at points (a), (b) and (c) above shall no longer remain binding in such cases (For the present purpose, 'Metro charges' would mean Delhi, Mumbai, Chennai, Kolkata. Bengaluru, Hyderabad and Ahmedabad}, ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 22 - 4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the Assessing Officer shall issue an appropriate show- cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances, due consideration shall be given to the submissions made by the assessee in response to the show- cause notice. 5. The contents of this Instruction should be immediately brought to the notice of all concerned for strict compliance. 6. Hindi version to follow Now, the case of the assessee before us was selected for limited scrutiny through CASS, for the reasons, that there were viz. (i). Large other expenses claimed in the P&L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares.. Accordingly, it can safely be concluded that the assessment framed by the A.O fell within the realm of the limited purpose for which its case was selected for scrutiny assessment viz. viz. (i). Large other expenses claimed in the P&L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares. 7.As observed by us hereinabove, as per the CBDT instruction No. 20/2015, dated 29.12.2015, in a case which had been selected for scrutiny assessment on the basis of Computer Aided Scrutiny Selection ('CASS'), the scrutinising of such case would be confined only to the specific reasons/issues for which the case has been picked up for scrutiny. However, the case may thereafter be taken up for complete scrutiny with the approval of the administrative Principal commissioner of income-tax/Commissioner of income-tax, where it is felt that apart from the CASS information there is ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 23 - potential escapement of income of more than Rs.10,00,000/-. Accordingly, the CBDT had in clear and unequivocal terms clarified that for broadening the scope of a case selected for limited scrutiny as per CASS information the approval of the administrative Principal commissioner of income-tax/Commissioner of income-tax would be required. In the case before us, it is an admitted fact that the case of the assessee was selected for “limited scrutiny” under CASS for the reasons, viz. (i). Large other expenses claimed in the P&L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares. In fact, it is neither a fact nor the case of the revenue that the said case was thereafter taken up for complete scrutiny with the approval of the administrative commissioner. In the backdrop of the aforesaid facts, we are of the considered view that as the scope of the assessment framed by the A.O under Sec. 143(3), dated 08.12.2016 was circumscribed by the limited reasons for which the case of the assessee was selected for scrutiny assessment, therefore, he was absolutely divested of his powers from traversing on issues which did not fall within the realm of the said limited purpose for which the said case was selected for being scrutinised. 8. We shall now in the backdrop of our aforesaid observations deliberate on the validity of the order passed by the Pr. CIT under Sec. 263. As observed by us hereinabove, the Pr. CIT had held the order passed by the A.O under Sec. 143(3), dated 08.12.2016 as erroneous, in so far it was prejudicial to the interest of the revenue, for the reason, that he had failed to carry out proper investigation as regards the issue of valuation of the „closing stock‟ as reflected in the audited accounts of the assessee. We are of a strong conviction that now when the case of the assessee was selected for limited scrutiny for the reasons viz. (i). Large other expenses claimed in the P&L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares, therefore, no infirmity could be attributed to the assessment framed by the A.O on the ground that he had failed to deal with other issues which though did not fall within the realm of the limited reasons for which the case was selected for scrutiny assessment. In other words, the ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 24 - Pr. CIT in the garb of his revisional jurisdiction u/s 263 cannot be permitted to traverse beyond the jurisdiction that was vested with the A.O while framing the assessment. In sum and substance, revisional jurisdiction cannot be exercised for broadening the scope of jurisdiction that was vested with the A.O while framing the assessment. 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 issues for which the case of the assessee was selected for limited scrutiny, therefore, no infirmity can be attributed to his order, for the reason, that he had failed to dwell upon certain other issues which did not form part of the reasons for which the case was selected for limited scrutiny under CASS. We thus not being able to concur with the view taken by the Pr. CIT that the order passed by the A.O under Sec. 143(3), dated 08.12.2016 is erroneous, therefore, „set aside‟ his order and restore the order passed by the A.O. As we have quashed the order passed by the Pr. CIT under Sec. 263 on the ground of invalid assumption of jurisdiction by him, therefore, we refrain from adverting to and therein adjudicating the contentions advanced by the ld. A.R on the merits of the case, which thus are left open. 9. The appeal of the assessee is allowed in terms of our aforesaid observations. 6. In the result, assessee’s appeal stands allowed. 10. We considering the ratio of the judicial decisions on limited scrutiny and the facts submitted by the Ld.AR with the supporting evidences are of the substantive opinion that the Pr CIT has not made any specific observations or enquiry with respect to expenditure claims and made de-novo assessment and directed the A.O to pass fresh assessment order. We find the ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 25 - assessee has complied diligently with the notices issued u/sec 142(1) of the Act along with the questioner and the Ld.AR demonstrated the replies in the paper book. We find that the A.O has considered one of the possible views based on the information and it is not necessary that the A.O should put all the discussions/observations in the assessment order, as per explanation 2 to sec 263 of the Act the authority has to invoke provisions only when there is no verification and enquiry conducted by the A.O. Further we are of the view that the order of the Pr. CIT does not satisfy the twin conditions of erroneous and prejudicial to the interest of the revenue. Accordingly, we set aside the order of the Pr.CIT and allow the grounds of appeal of in favour of the assessee. 11. In the result, the appeal filed by the assessee is allowed. Sd/- Sd/- (PRASHANT MAHARISHI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 20.04.2022 KRK, PS ITA No. 678Mum/2021 Sandeep P. Parikh, Mumbai. - 26 - Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. Concerned CIT 5. DR, ITAT, Mumbai 6. Guard file. आदेशान ु सार/ BY ORDER, //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai