LATE SMT. GURBACHAN KAUR, THROUGH L/H SHRI DILPREET SINGH NARANG, GURGAON V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR

ITA 692/JPR/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2301 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 13-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROONI PAL DCIT DHK
• Keywords: Value adopted by valuation officer; Principle of natural justice; Fair market value; Competent authority; Assessment record; TDS; Set aside; CHAPTER IV
• Section: 143(3); 142(1); 143(2); 55A; 54; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S B, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 692/JP/2019 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 LATE SMT. GURBACHAN KAUR, THROUGH L/H SHRI DILPREET SINGH NARANG, B-902, BESTECH PARK VIEW, SPA NEXT, LANE NO. 1, SECTOR-67, GURGAON, HARYANA - 122002 CUKE VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AHGPK 0182 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDDARTH RANKA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROONI PAL (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/11/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 05/12/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 15/03/2019 OF LD. CIT(A)-I, JAIPUR ARISING FROM THE ORDER PASSED U/S 154 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). TH E ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT IN THE FACTS AND IN CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. A.O. HAS GROSSLY ERRED IN PASSING ORDER U/S 154 OF THE ACT AFTER PASSING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WHICH IS WITHOUT JURISDICTION AND BARRED BY THE LAW AND THUS IS BAD IN LAW, IS NULL AND VOID AND DESERVES TO BE QUASHED AND SET ASIDE. ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 2 1.1 THAT IN THE FACTS AND IN CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. LOWER AUTHORITIES GROSSLY ERRED IN ISSUING NOTICE U /S 154/155 OF THE ACT DATED 07/07/2017 ON THE BASIS OF DVO REPORT REC EIVED SUBSEQUENT TO PASSING OF ASSESSMENT ORDER U/S 143(3 ) OF THE ACT DATED 27/12/2016 AND IN PASSING ORDER U/S 154 OF TH E ACT DATED 22/08/2017. 2. THAT ON THE LAW AND IN THE FACTS AND CIRCUMSTANC ES OF THE CASE THE LD. LOWER AUTHORITIES GROSSLY ERRED IN CALCULATION LONG TERM CAPITAL GAIN AT RS. 75,25,770/- AS AGAINST RS. 14,71,577/- ADOPTED BY THE ASSESSEE. 2.1 THAT ON THE LAW AND IN THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE THE LD. LOWER AUTHORITIES GROSSLY ERRED IN ADO PTING THE FAIR MARKET VALUE OF THE PROPERTY AS AT 01/04/1981 AT RS . 1,57,000/- AS AGAINST RS. 8,01,749/- ADOPTED BY THE ASSESSEE. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY OR AMEND ANY GROUND ON OR BEFORE THE DATE OF HEARING. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND, WHI CH READS AS UNDER: THAT THE LD. A.O. GROSSLY ERRED IN REFERRING THE MA TTER TO THE LD. DEPARTMENTAL VALUATION OFFICER U/S 55A OF THE ACT W HICH WAS BEYOND THE SCOPE OF LIMITED SCRUTINY ASSESSMENT AND THUS ENTIRE ACTION IS BAD IN LAW, NULLITY AND VOID AND DESERVES TO BE QUASHED AND SET ASIDE. 2. WE HAVE HEARD THE LD COUNSEL OF THE ASSESSEE AS WELL AS THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD FOR ADMISSION OF THE ADDITIONAL GROUND. THE LD COUNSEL OF THE ASSESSEE H AS SUBMITTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY LEGAL IN CHARACTER AND GOES TO THE ROOT OF THE MATTER AND THEREFORE, THE S AME MAY BE ADMITTED FOR ADJUDICATION ON MERITS. IN SUPPORT OF HIS CONTE NTION, HE HAS RELIED ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 3 UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN T HE CASE OF NTPC VS CIT (1998) 229 ITR 383 (SC). 3. ON THE OTHER HAND, THE LD DR HAS OBJECTED TO THE ADMISSION OF THE ADDITIONAL GROUND AND SUBMITTED THAT THE ASSESSEE H AS NOT RAISED SUCH OBJECTION EITHER BEFORE THE A.O. OR BEFORE THE LD. CIT(A). 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FULLY PERUSAL OF THE RECORD WE NOTE THAT THE ASSESSEE HAS NOT RAISED THIS ISSUE OF VALIDITY OF THE ADDITION MADE BY THE A.O. ON THE ISSUE OF LO NG TERM CAPITAL GAIN AND PARTICULARLY FAIR MARKET VALUE AS ON 01/4/1981 ON THE GROUND OF JURISDICTION OF THE A.O. BEYOND THE LIMITED SCRUTIN Y. THE ASSESSEE HAS QUESTIONED THE VALIDITY OF THE ASSESSMENT OF LONG T ERM CAPITAL GAIN ON THE POINT THAT THE ASSESSMENT WAS TAKEN UP BY THE A .O. IN CASS FOR LIMITED SCRUTINY ON THE ISSUE OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 54 OF THE ACT, LARGE AMOUNT OF SALE CONSIDERATION O F THE PROPERTY REPORTED IN THE RETURN OF INCOME BUT LESS THAN THE SALE CONSIDERED REPORTED IN THE TDS RETURN U/S 194IA OF THE ACT AND CASH DEPOSIT IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE, THEREFORE, TH E ISSUE OF FAIR MARKET VALUE OF THE PROPERTY AS ON 01/04/1981 WAS NOT WITH IN THE SCOPE OF LIMITED SCRUTINY WHICH CANNOT BE EXPANDED WITHOUT P RIOR APPROVAL OF THE APPROPRIATE AUTHORITY. FURTHER THE SCOPE OF THE LIM ITED SCRUTINY CANNOT ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 4 BE EXPANDED WHILE PASSING THE ORDER U/S 154 OF THE ACT WHEN THE SAID ISSUE WAS NOT WITHIN THE SCOPE OF SCRUTINY ASSESSME NT. THEREFORE, THE ISSUE RAISED IN THE ADDITIONAL GROUND IS PURELY LEG AL IN NATURE AND CAN BE ADJUDICATED ON THE BASIS OF FACTS AND MATERIAL AVAI LABLE ON ASSESSMENT RECORD. ACCORDINGLY, WE ADMIT THE ADDITIONAL GROUND FOR ADJUDICATION. 4.1 ON MERITS, THE LD. COUNSEL HAS SUBMITTED THAT T HE ORDER PASSED BY THE A.O. U/S 154 OF THE ACT IS INVALID AS THE SAME IS BEYOND THE SCOPE OF SCRUTINY ASSESSMENT UNDERTAKEN BY THE A.O. IN SUPPO RT OF HIS CONTENTION, HE HAS RELIED UPON THE FOLLOWING DECISI ONS: (I) CBS INTERNATIONAL PROJECTS PVT. LTD. VS CIT DAT ED 28/02/2019 PASSED BY THE HONBLE ITAT, NEW DELHI. (II) SARVAJIT BHATIA VS ITO, FARIDABAD DATED 21/08/ 2019 PASSED BY THE HONBLE ITAT, NEW DELHI. (III) SHRI VIJAY KUMAR VS ITO, PATIALA DATED 12/09/ 2019 PASSED BY ITAT, CHANDIGARH. (IV) LOKESH SADASHIV SHETTY VS ITO, AHMEDNAGAR, DAT ED 20/02/2019 PASSED BY ITAT, PUNE. 5. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT WHEN THE SCRUTINY ASSESSMENT WAS TAKEN UP ON THE ISSUE OF SA LE CONSIDERATION OF THE PROPERTY SOLD BY THE ASSESSEE AS WELL AS THE DE DUCTIONS CLAIMED BY ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 5 THE ASSESSEE UNDER CHAPTER-IV OF THE ACT THEN THE D ETERMINATION OF THE FAIR MARKET VALUE OF THE PROPERTY IS VERY MUCH WITH IN THE SCOPE OF SCRUTINY ASSESSMENT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE CA SE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS AND TH E SCOPE OF LIMITED SCRUTINY IS DISCERNABLE FROM THE NOTICE ISSUED U/S 142(1) DATED 07/04/2016 AS UNDER: SPECIFIC QUERIES RAISED, FOR WHICH INFORMATION TO BE FURNISHED: YOUR ITR HAS BEEN SELECTED FOR LIMITED SCRUTINY UND ER CASS FOR THE FOLLOWING REASONS: 1 LARGE DEDUCTION CLAIMED U/ S 54B, 54C, 54D, 54G, 54GA 2 LARGE VALUE SALE OF CONSIDERATION OF PROPERTY IN ITR IS LESS THAN SALE CONSIDERATION OF PROPERTY REPORTED IN TDS RETU RN UNDER SECTION 194IA 3 LARGE CASH DEPOSITS IN SAVINGS BANK ACCOUNT AND A SSESSEE HAS ALSO TRANSFERRED ONE OR MORE PROPERTY(IES) DURING T HE YEAR. THUS, THE A.O. RAISED SPECIFIC QUERIES UNDER LIMITE D SCRUTINY IN RESPECT OF THREE POINTS. THERE WAS NO QUERY RAISED ABOUT THE F AIR MARKET VALUE OF THE PROPERTY IN QUESTION AS ON 01/04/1981, THEREFOR E, THE SAID ISSUE CANNOT BE TREATED AS PART OF THE LIMITED SCRUTINY U NDER CASS WHEN NONE OF THE QUERIES RAISED UNDER THE SCRUTINY RELATING T O THE COMPUTATION OF THE CAPITAL GAIN BUT ALL ARE REGARDING DEDUCTION CL AIMED UNDER CHAPTER IV AND PARTICULARLY U/S 54 OF THE ACT AND THE VARIA TION OF THE SALE CONSIDERATION SHOWN IN THE ITR AND TDS RETURN AS WE LL AS THE DEPOSITS ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 6 MADE IN THE BANK ACCOUNT. THUS, WE FIND THAT THE IS SUE WHICH WAS TAKEN UP BY THE A.O. WHILE PASSING THE ORDER U/S 154 OF T HE ACT DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01/04/1 981 WAS NOT WITHIN THE SCOPE OF SCRUTINY ASSESSMENT. 7. ONCE THE ISSUE TAKEN UP BY THE A.O. WAS BEYOND T HE SCOPE OF LIMITED SCRUTINY UNDER CASS THEN UNTIL AND UNLESS T HE LIMITED SCRUTINY IS CONVERTED INTO COMPREHENSIVE SCRUTINY BY TAKING AN APPROVAL OF THE COMPETENT AUTHORITY, THE SAID ISSUE OF DETERMINATIO N OF FAIR MARKET VALUE OF THE PROPERTY AS ON 01/04/1081 IS BEYOND THE JURI SDICTION OF THE A.O. UNDER THE LIMITED SCRUTINY. SINCE THIS ISSUE WAS NO T RAISED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND IT REQUIR ES VERIFICATION OF THE ASSESSMENT RECORD TO ASCERTAIN WHETHER THE A.O. OBT AINED THE APPROVAL OF THE COMPETENT AUTHORITY FOR CONVERSION OF THE LI MITED SCRUTINY TO THE COMPREHENSIVE SCRUTINY. IF THE ISSUE OF DETERMINATI ON OF FAIR MARKET VALUE AS ON 01/04/1981 IS TAKEN UP BY THE A.O. WITH OUT EXPANSION OR CONVERSION OF THE LIMITED SCRUTINY TO COMPREHENSIVE SCRUTINY THEN SUCH ACT OF THE A.O. IS BEYOND HIS JURISDICTION AND THE ORDER PASSED BY THE A.O. U/S 154 R.W.S 155(15) OF THE ACT WOULD BE ILLE GAL AND VOID AB INITIO. THIS TRIBUNAL HAS TAKEN A CONSISTENT VIEW ON THIS I SSUE IN A SERIES OF DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE AS SESSEE. IN THE CASE OF ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 7 CBS INTERNATIONAL PROJECTS P. LTD. VS CIT (SUPRA), THE DELHI BENCHES OF THE TRIBUNAL HAS CONSIDERED RELEVANT INSTRUCTIONS I SSUED BY THE CBDT FOR LIMITED SCRUTINY UNDER CASS AND HELD IN PARA 13 TO 16 AS UNDER: 13. CBDT INSTRUCTION NO. 20/2015 IS AS UNDER: SCRUTINY ASSESSMENTS-SOME IMPORTANT ISSUES AND SCO PE OF SCRUTINY IN CASES SELECTED THROUGH COMPUTER AIDED S CRUTINY SELECTION (CASS)-REG. THE CENTRAL BOARD OF DIRECT TAXES (CBDT), VIDE IN STRUCTION NO.7/2014 DATED 26.09.2014 HAD CLARIFIED THE EXTENT OF ENQUIRY IN CERTAIN CATEGORY OF CASES SPECIFIED THEREIN, WHI CH ARE SELECTED FOR SCRUTINY THROUGH CASS. FURTHER CLARIFICATIONS H AVE BEEN SOUGHT REGARDING THE SCOPE AND APPLICABILITY OF THE AFORESAID INSTRUCTION TO CASES BEING SCRUTINIZED. 2. IN ORDER TO FACILITATE THE CONDUCT OF SCRUTIN Y 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 INSTRUC TION NO.7/2014, THE SAID INSTRUCTION IS APPLICABLE ONLY IN RESPECT OF THE CASES SELECTED FOR SCRUTINY THROUGH CASS-201 4. II. WHETHER THE SAID INSTRUCTION IS APPLICABLE TO ALL CASES SELECTED UNDER CASS: THE SAID INSTRUCTION IS APPLIC ABLE WHERE THE CASE IS SELECTED FOR SCRUTINY UNDER CASS ONLY ON THE PARAMETER(S) OF AIR/CIB/26AS DATA. IF A CASE HA S BEEN SELECTED UNDER CASS FOR ANY OTHER REASON(S)/PARAMET ER(S) BESIDES THE AIR/CIB/26AS DATA, THEN THE SAID INSTRU CTION WOULD NOT APPLY. III. SCOPE OF ENQUIRY: SPECIFIC ISSUE BASED ENQUI RY IS TO BE CONDUCTED ONLY IN THOSE SCRUTINY CASES WHICH HAVE B EEN SELECTED ON THE PARAMETER(S) OF AIR/CIB/26AS DATA. IN SUCH CASES, THE ASSESSING OFFICER, SHALL ALSO CONFINE TH E QUESTIONNAIRE ONLY TO THE SPECIFIC ISSUES PERTAININ G TO ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 8 AIR/CIB/26AS DATA. WIDER SCRUTINY IN THESE CASES CA N ONLY BE CONDUCTED AS PER THE GUIDELINES AND PROCEDURES S TATED IN INSTRUCTION NO. 7/2014. IV. REASON FOR SELECTION: IN CASES UNDER SCRUTINY FOR VERIFICATION OF AIR/CIB/26AS DATA, THE ASSESSING OF FICER HAS TO INTIMATE THE REASON FOR SELECTION OF CASE FOR SC RUTINY TO THE ASSESSEE CONCERNED. 3. AS FAR AS THE RETURNS SELECTED FOR SCRUTINY THRO UGH CASS-2015 ARE CONCERNED, TWO TYPE OF CASES HAVE BEEN SELECTED FOR SCRUTINY IN THE CURRENT FINANCIAL YEAR-- ONE IS LIMITED SCR UTINY AND OTHER IS COMPLETE SCRUTINY. THE ASSESSEES CONCERNED HAVE D ULY BEEN INTIMATED ABOUT THEIR CASES FALLING EITHER IN LIMI TED SCRUTINY OR COMPLETE SCRUTINY THROUGH NOTICES ISSUED UNDER SE CTION 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 PIC KED UP FOR SCRUTINY. FURTHER, THE SCOPE OF ENQUIRY SHALL BE RE STRICTED 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 A SSESSING OFFICER THAT THERE IS POTENTIAL ESCAPEMENT OF INCOM E EXCEEDING RS. FIVE LAKHS (FOR METRO CHARGES, THE MONETARY LIM IT SHALL BE RS. TEN LAKHS) REQUIRING SUBSTANTIAL VERIFICATION O N ANY OTHER ISSUE(S), THEN, THE CASE MAY BE TAKEN UP FOR COMPL ETE SCRUTINY WITH THE APPROVAL OF THE PR. CIT/CIT CONC ERNED. HOWEVER, SUCH AN APPROVAL SHALL BE ACCORDED BY THE BY THE PR. CIT/CIT IN WRITING AFTER BEING SATISFIED ABOUT MERI TS OF THE ISSUE(S) NECESSITATING COMPLETE SCRUTINY IN THAT PARTICULAR ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 9 CASE. SUCH CASES SHALL BE MONITORED BY THE RANGE HE AD 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 AHMEDABA D). 4. THE BOARD FURTHER DESIRES THAT IN ALL CASES UND ER SCRUTINY, WHERE THE ASSESSING OFFICER PROPOSES TO MAKE ADDITIONS OR DISALLOWANCES, THE ASSESSEE WOULD BE GIVEN A FAIR OPPORTUNITY TO E XPLAIN HIS POSITION ON THE PROPOSED ADDITIONS/DISALLOWANCES IN ACCORDAN CE WITH THE PRINCIPLE OF NATURAL JUSTICE. IN THIS REGARD, THE A SSESSING OFFICER SHALL ISSUE AN APPROPRIATE SHOW-CAUSE NOTICE DULY INDICAT ING THE REASONS FOR THE PROPOSED ADDITIONS/DISALLOWANCES ALONG WITH NECESSARY EVIDENCES/REASONS FORMING THE BASIS OF THE SAME. BE FORE PASSING THE FINAL ORDER AGAINST THE PROPOSED ADDITIONS/DISALLOW ANCES, DUE CONSIDERATION SHALL BE GIVEN TO THE SUBMISSIONS MAD E BY THE ASSESSEE IN RESPONSE TO THE SHOW-CAUSE NOTICE. 5. THE CONTENTS OF THIS INSTRUCTION SHOULD BE IMMED IATELY BROUGHT TO THE NOTICE OF ALL CONCERNED FOR STRICT COMPLIANCE. 6. HINDI VERSION TO FOLLOW. SD/- (ANKITA PANDEY) UNDER SECRETARY TO GOVERNMENT OF INDIA 14. WITH INSTRUCTION 7 OF 2014, THE BOARD HAS MADE IT SPECIFICALLY CLEAR THAT THE SCOPE OF ENQUIRY SHOULD BE LIMITED T O VERIFICATION OF THE PARTICULAR ASPECTS ONLY. IT HAS ALSO BEEN DIRECTED THAT AN APPROVAL IS REQUIRED FROM THE PCIT/DIT, IN WRITING, AFTER BEING SPECIFIC ABOUT THE MERITS OF THE OTHER ISSUES FOR COMPREHENSIVE SCRUTI NY. 15. THE SAID INSTRUCTION READS AS UNDER: INSTRUCTION NO. 7/2014 GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE (CBDT) ROOM NO. 143E, NORTH-BLOCK, NEW-DELHI ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 10 DATED THE 26 TH OF SEPTEMBER, 2014 TO AU PR. CHIEF-COMMISSIONERS OF INCOME-TAX/CHIEF- COMMISSIONERS OF INCOME-TAX A ALL PR. DIRECTORS-GENERAL OF INCOME-TAX/DIRECTORS-G ENERAL OF INCOME-TAX SIR/MADAM, SUBJECT: - SCOPE OF ENQUIRY IN CASES SELECTED FOR S CRUTINY DURING THE FINANCIAL YEAR 2014-2015 ON BASIS OF AIR/C1B /2 6AS MIS- MATCH REGARDING IT HAS COME TO THE NOTICE OF THE BOARD THAT DURING THE SCRUTINY ASSESSMENT PROCEEDINGS SOME OF THE AOS ARE ROUTINEL Y CALLING FOR INFORMATION WHICH IS NOT RELEVANT, FOR ENQUIRY INTO THE ISSUES TO BE CONSIDERED. THIS HAS BEEN CAUSING UNDUE HARAS SMENT TO THE TAXPAYERS AND HAS ALSO DRAWN ADVERSE CRITICISM FROM SEVERAL QUARTERS. FURTHER, FEEDBACK AND ANALYSIS OF SUCH OR DERS INDICATES THAT MANY TIMES THE CORE ISSUES, WHICH FO RMED THE BASIS OF SELECTION OF THE CASE FOR SCRUTINY WERE NO T EXAMINED PROPERLY. SUCH INSTANCES PRIMARILY OCCURRED IN CASE S SELECTED FOR SCRUTINY UNDER COMPUTER AIDED SCRUTINY SELECTION (' CASS') FOR VERIFICATION OF SPECIFIC INFORMATION OBTAINED FROM THIRD PARTY SOURCES WHICH APPARENTLY DID NOT MATCH WITH THE DET AILS SUBMITTED BY THE TAX AVER IN THE RETURN OF-INCOME. 2. THEREFORE, FOR PROPER ADMINISTRATION OF THE INCO ME-TAX ACT, 1961 ('ACT'), CENTRAL BOARD OF DIRECT TAXES, BY VIR TUE OF ITS POWERS UNDER SECT ON 119 OF THE ACT, IN SUPERSESSIO N OF EARLIER INSTRUCTIONS/GUIDELINES ON THIS SUBJECT, HEREBY DIR ECTS THAT THE CASES SELECTED FOR SCRUTINY DURING THE FINANCIAL YE AR 2014-20(15 UNDER CASS, ON THE BASIS OF EITHER AIR DATA OR CIB INFORMATION OR FOR NON RE-CONCILIATION WITH 26AS DATA THE SCOPE OF ENQUIRY SHOULD BE LIMITED TO VERIFICATION OF THESE ARE PART ICULAR ASPECTS ONLY. THEREFORE, IN SUCH CASES, AN ASSESSING OFFICE R HALL CONFINE THE QUESTIONNAIRE AND SUBSEQUENT ENQUIRY OR VERIFIC ATION ONLY TO THESE SPECIFIC POINT(S) ON THE BASIS OF WHICH THE P ARTICULAR RETURN HAS BEEN SELECTED FOR SCRUTINY. ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 11 3. THE REASON(S) FOR SELECTION OF CASES UNDER CASS ARE DISPLAYED TO THE ASSESSING OFFICER IN AST APPLICATI ON AND NOTICE U/S 143(2), AFTER GENERA ION FROM AST, IS ISSUED TO THE TAXPAYER WITH THE REMARK 'SELECTED UNDER COMPUTER AIDED SCRU TINY SELECTION (CASS)'. THE FUNCTIONALITY IN AST IS BEIN G MODIFIED SUITABLY TO FLAG THE REASONS FOR SCRUTINY SELECTION IN AIR/CIB/26AS CASES. THIS FUNCTIONALITY IS EXPECTED TO BE OPERATIONALISED BY 15TH OCTOBER, 2014. FURTHER, THE ASSESSING OFFICER WHILE ISSUING NOTICE UNDER SECTION 142(1) O F THE ACT WHICH IS ENCLOSED WITH THE FIRST QUESTIONNAIRE WOUL D PROCEED TO VERIFY ONLY THE SPECIFIC ASPECTS REQUIRING EXAMINATION/VERIFICATION. IN SUCH CASES, ALL EFFORT S WOULD BE MAD TO ENSURE THAT ASSESSMENT PROCEEDINGS ARE COMPL ETED EXPEDITIOUSLY IN MINIMUM POSSIBLE NUMBER OF HEARING S WITHOUT UNNECESSARILY DRAGGING THE CASE TILL THE TIME-BARIN G DATE. 4. IN CASE, DURING THE COURSE OF ASSESSMENT PROCEED INGS IT IS FOUND THAT THERE IS POTENTIAL ESCAPEMENT OF INCOME EXCEEDING RS. 10 LAKHS (F NON -METRO CHARGES, THE MONETARY LI MIT SHALL BE RS. 5 LAKHS) ON ANY OTHER ISSUE(S) APART FROM THE A IR/CIB/26AS INFORMATION BASED ON 14 WHICH THE CASE WAS ELECTED UNDER CASS REQUIRING SUBSTANTIAL VERIFICATION, THE CASE M AY BE TAKEN U FOR COMPREHENSIVE SCRUTINY WITH THE APPROVAL OF THE PR. CIT/DIT CONCERNED. HOWEVER, SUCH AN APPROVAL SHALL BE ACCOR DED BY THE PR. CIT/DIT IN WRITING AFTER BEING SATISFIED ABOUT MERITS OF THE ISSUE(S) NECESSITATING WIDER AND DETAILED SCRUTINY IN THE CASE. CASES SO TAKEN UP FOR DETAILED SCRUTINY SHALL BE MO NITORED BY THE IT. CIT/ADDL. CIT CONCERNED. 5. THE CONTENTS OF THIS INSTRUCTION SHOULD BE IMMED IATELY BROUGHT TO THE NOTICE OF ALL CONCERNED FOR STRICT C OMPLIANCE. 6. HINDI VERSION TO FOLLOW. (ROHIT GARG) DEPUTY SECRETARY TO THE GOVERNMENT OF INDIA 16. A PERUSAL OF THE AFORESAID INSTRUCTION SHOWS TH AT THE ASSESSING OFFICER CAN WIDEN THE SCOPE OF SCRUTINY EVEN IF IT IS SELECTED FOR SCRUTINY ASSESSMENT UNDER CASS. HOWEVER, THE CONDIT ION PRECEDENT ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 12 FOR SUCH ACTION OF THE ASSESSING OFFICER IS THAT HE HAS TO SEEK PRIOR APPROVAL OF THE HIGHER AUTHORITIES. A PERUSAL OF TH E ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS NOT MENTIONED AS TO WHEN THE PERMISSION FROM THE PCIT WAS SOUGHT TO MAKE FURTHER ENQUIRIES IN THE CASE OF THE ASSESSEE. CONSIDERING THE FACTS OF THE CASE IN TOTALITY, IN THE LIGHT OF THE CBDT INSTRUCTIONS MENTIONED HER EINABOVE, QUA NOTICE U/S 143(2) OF THE ACT, WE ARE OF THE CONSIDE RED OPINION THAT THE 15 ASSESSMENT ORDER SO FRAMED BY THE ASSESSING OFFICER IS NOT IN CONSONANCE WITH INSTRUCTION OF THE CBDT AND, THEREF ORE DESERVES TO BE QUASHED. THE ORDER OF THE LD. CIT(A) IS ACCORDIN GLY SET ASIDE. THUS, IF THE A.O. HAS TAKEN UP THE ISSUE OF DETERMI NING FAIR MARKET VALUE OF THE PROPERTY IN QUESTION AS ON 01/4/1981 WITHOUT CONVERTING THE LIMITED SCRUTINY TO COMPREHENSIVE SCRUTINY BY TAKIN G THE PRIOR APPROVAL OF THE COMPETENT AUTHORITY THEN THE SAID ORDER PASS ED BY THE A.O. WILL BE NULLITY AS BEYOND HIS JURISDICTION. THE AO NEIT HER IN THE ASSESSMENT ORDER NOR IN THE ASSESSMENT PROCEEDINGS SHEET HAS M ENTIONED ABOUT ANY PROPOSAL OF CONVERTING THE LIMITED SCRUTINY TO COMP REHENSIVE SCRUTINY AND CONSEQUENTIAL APPROVAL OF THE COMPETENT AUTHORI TY BEING PRINCIPAL CIT/DIT. THE LD. COUNSEL FOR THE ASSESSEE HAS PROD UCED THE CERTIFIED COPY OF THE ASSESSMENT PROCEEDINGS SHEET WHICH DOES NOT CONTAIN ANY SUCH PROPOSAL OF THE AO FOR EXPANDING THE LIMITED S CRUTINY TO COMPLETE SCRUTINY. FURTHER, THE REVENUE HAS ALSO NOT PRODUC ED ANYTHING TO SHOW THAT THE AO HAS OBTAINED THE NECESSARY APPROVAL FRO M THE COMPETENT ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 13 AUTHORITY FOR CONVERSION OF THE LIMITED SCRUTINY TO COMPREHENSIVE SCRUTINY. ACCORDINGLY, THE ISSUE WHICH IS TAKEN U P BY THE AO IN THE PROCEEDINGS UNDER SECTION 154 IS ILLEGAL AND VOID B EING BEYOND HIS JURISDICTION TO FRAME THE LIMITED SCRUTINY ASSESSME NT. ACCORDINGLY, WE SET ASIDE AND QUASH THE ORDER PASSED BY THE AO UNDE R SECTION 154 OF THE ACT. 8. SINCE WE HAVE QUASHED THE ORDER PASSED BY THE AO UNDER SECTION 154 OF THE ACT FOR WANT OF HIS JURISDICTION ON THIS ISSUE, THEREFORE, WE DO NOT PROPOSE TO TAKE UP THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH DECEMBER, 2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 5 TH DECEMBER, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- LATE SMT. GURBACHAN KAUR, THROUGH L/ H SHRI DILPREET SINGH NARANG, GURGAON, HARYANA. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR ITA 692/JP/2019_ LATE SMT. GURBACHAN KAUR VS DCIT 14 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 692/JP/2019) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR