Appeal Details
Counselvise Citation
[2022] 106 COUNSELVISE.COM (IT) 5699 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-09-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2017-2018
Appeal Filed On
18-04-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 706/MUM/2022 Assessment Year: 2017-18 Shree Aniruddha Upasana Foundation, Flat No. 702, Link Apartment, TPS III, Khari Village, Khar (West), Mumbai-400052. Vs. CIT (Exemption), 601, 6 th floor, Cumballa Hills MTNL TE Building, Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026. PAN No. AAICS 9217 L Appellant Respondent Assessee by : Snehal Shah, AR Revenue by : Smt. Shailja Rai, CIT-DR Date of Hearing : 01/08/2022 Date of pronouncement : 19/09/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against revision order dated 15/03/2022 passed by the Ld. Commissioner of Income-tax (Exemption), Mumbai [in short ‘the Ld. CIT’] for assessment year 2017-18, raising following grounds: 1. On the facts and circumstances Learned Commissioner of Income Tax (Exemptions), Mumbai has erred in setting aside the Order passed u/s 143(3) of the Act by the Learned Assessing Officer, ITO(E), Ward 2(3) and thereby erred in passing an order under section 2 appreciating that: a. Despite the fact that the purpose of utilization of funds u/s 11(2) of the Act of Rs.2,50,00,000/ was amply clear, specific and also supported through its application of funds deployed in the current year, the erred in concluding that the purpose of "Development Fund" is vague and not specific and does not have concrete plan for setting aside the amount as stated above. b. The Appellant duly furnished all the requisite details that were sought by the Learned Assessing Officer and there was no notice that was unanswered by the Appellant. The Appellant had also explained the use of the term Development Fund and the rationale behind the same and that how the amount of Rs.2,50,00,000/ 11(2) Act for AY 2015 towards the various projects carried out by the Appellant. c. The reduction in block of assets with respect to the sale of flat of Rs. 34,70,955/ Rs.8,48 Officer during the course of assessment proceedings and only after due verification and perusal of all the documents and materials on record and after duly understanding the facts and rationale of the Appe Officer pass the order u/s 143(3) of the Act for AY 2017 18. Shree Aniruddha Upasana Foundation On the facts and circumstances of the case and in law, the Learned Commissioner of Income Tax (Exemptions), Mumbai has erred in setting aside the Order passed u/s 143(3) of the Act by the Learned Assessing Officer, ITO(E), Ward 2(3) and thereby erred in passing an order under section 263 of the Act without appreciating that: Despite the fact that the purpose of utilization of funds u/s 11(2) of the Act of Rs.2,50,00,000/ was amply clear, specific and also supported through its application of funds deployed in the current year, the Learned CIT(Exemptions), Mumbai erred in concluding that the purpose of "Development Fund" is vague and not specific and does not have concrete plan for setting aside the amount as stated above. The Appellant duly furnished all the requisite details that ere sought by the Learned Assessing Officer and there was no notice that was unanswered by the Appellant. The Appellant had also explained the use of the term Development Fund and the rationale behind the same and that how the amount of Rs.2,50,00,000/- accumulated u/s 11(2) Act for AY 2015-16 is ultimately utilized in AY 2017 towards the various projects carried out by the Appellant. The reduction in block of assets with respect to the sale of flat of Rs. 34,70,955/- and sale of motor vehicle of Rs.8,48,026/- was duly explained to the Learned Assessing Officer during the course of assessment proceedings and only after due verification and perusal of all the documents and materials on record and after duly understanding the facts and rationale of the Appellant, did the learned Assessing Officer pass the order u/s 143(3) of the Act for AY 2017 18. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 2 of the case and in law, the Learned Commissioner of Income Tax (Exemptions), Mumbai has erred in setting aside the Order passed u/s 143(3) of the Act by the Learned Assessing Officer, ITO(E), Ward 2(3) and thereby 63 of the Act without Despite the fact that the purpose of utilization of funds u/s 11(2) of the Act of Rs.2,50,00,000/ was amply clear, specific and also supported through its application of funds deployed Learned CIT(Exemptions), Mumbai erred in concluding that the purpose of "Development Fund" is vague and not specific and does not have concrete plan for The Appellant duly furnished all the requisite details that ere sought by the Learned Assessing Officer and there was no notice that was unanswered by the Appellant. The Appellant had also explained the use of the term Development Fund and the rationale behind the same and cumulated u/s 16 is ultimately utilized in AY 2017-18 towards the various projects carried out by the Appellant. The reduction in block of assets with respect to the sale of and sale of motor vehicle of was duly explained to the Learned Assessing Officer during the course of assessment proceedings and only after due verification and perusal of all the documents and materials on record and after duly understanding the facts llant, did the learned Assessing Officer pass the order u/s 143(3) of the Act for AY 2017 18. d. (d) The Appellant had informed the Learned CIT (Exemptions), Mumbai that the reduction in CWIP is merely pertaining to accounting entries passed in the books of accounts for capitalization of assets and booking of bills under CWIP and nothing else. The Appellant explained the above facts along with the annexures in relation to reduction in CWIP to the Learned Assessing Officer during the course of assessment procee perusal of all the documents and materials on record and only after duly understanding the facts of the Appellant, did the learned Assessing Officer pass the order u/s 143(3) of the Act for AY 2017 2. The Learned appreciating that all the documentary evidences w.r.t all three issues have been submitted by the Appellant to the Learned Assessing Officer. The Assessing Officer, only after taking into consideration the submissio accepted the returned income and such a view, being a plausible view cannot be considered as erroneous or prejudicial to the interest of the revenue by any stretch of imagination and hence the inference drawn by the Learned C deserves to be "Dismissed" in liminee. 2. The assessee has f dated 06/07/2022, which are reproduced as under: 3. The learned CIT(E), Mumbai has failed to appreciate that the learned Assessing Officer has passed the order u/s 143(3) only Shree Aniruddha Upasana Foundation (d) The Appellant had informed the Learned CIT (Exemptions), Mumbai that the reduction in CWIP is merely pertaining to accounting entries passed in the books of ccounts for capitalization of assets and booking of bills under CWIP and nothing else. The Appellant explained the above facts along with the annexures in relation to reduction in CWIP to the Learned Assessing Officer during the course of assessment proceedings and only after due verification and perusal of all the documents and materials on record and only after duly understanding the facts of the Appellant, did the learned Assessing Officer pass the order u/s 143(3) of the Act for AY 2017-18. The Learned CIT(Exemptions), Mumbai has erred in not appreciating that all the documentary evidences w.r.t all three issues have been submitted by the Appellant to the Learned Assessing Officer. The Assessing Officer, only after taking into consideration the submissions filed by the Appellant, has accepted the returned income and such a view, being a plausible view cannot be considered as erroneous or prejudicial to the interest of the revenue by any stretch of imagination and hence the inference drawn by the Learned CIT(Exemptions) deserves to be "Dismissed" in liminee. assessee has further raised additional ground dated 06/07/2022, which are reproduced as under: The learned CIT(E), Mumbai has failed to appreciate that the learned Assessing Officer has passed the order u/s 143(3) only Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 3 (d) The Appellant had informed the Learned CIT (Exemptions), Mumbai that the reduction in CWIP is merely pertaining to accounting entries passed in the books of ccounts for capitalization of assets and booking of bills under CWIP and nothing else. The Appellant explained the above facts along with the annexures in relation to reduction in CWIP to the Learned Assessing Officer during the course of dings and only after due verification and perusal of all the documents and materials on record and only after duly understanding the facts of the Appellant, did the learned Assessing Officer pass the order u/s 143(3) of the CIT(Exemptions), Mumbai has erred in not appreciating that all the documentary evidences w.r.t all three issues have been submitted by the Appellant to the Learned Assessing Officer. The Assessing Officer, only after taking into ns filed by the Appellant, has accepted the returned income and such a view, being a plausible view cannot be considered as erroneous or prejudicial to the interest of the revenue by any stretch of imagination and IT(Exemptions) additional ground vide letter The learned CIT(E), Mumbai has failed to appreciate that the learned Assessing Officer has passed the order u/s 143(3) only after verification of the issue of payment made to specified person in the limited scrutiny category under CASS. 4. The learned CIT(E), submission dated 20/02/2019 of the Appellant wherein the issue of payment made to specified person [(Question No. 16 of Notice u/s 142(1)] is already been verified and examined by the learned AO. 5. Without prejudice passed order u/s 263 of the Act for aspects other than that covered under the scope of limited scrutiny and thereby ignoring CBDT Instruction No. 7/2014, 20/2015 and 5/2016 and CBDT letter dated 30/11/2017 which 2.1 We have heard submission of rival parties on admissibility of additional ground. In view of settled law in the case of NTPC Ltd. 229 ITR 283 (SC) being the issue of legal native and no fresh investigation of facts required, the ad adjudication. 3. In the grounds raised, the assessee is agitated by action of the Ld. CIT in terms of section 263 of the ‘the Act’) for holding the assessment order dated 16/11/2019 Shree Aniruddha Upasana Foundation after verification of the issue of payment made to specified person in the limited scrutiny category under CASS. The learned CIT(E), Mumbai has erred in not referring to the submission dated 20/02/2019 of the Appellant wherein the issue of payment made to specified person [(Question No. 16 of Notice u/s 142(1)] is already been verified and examined by the learned AO. Without prejudice to the above, the learned CIT(E), Mumbai has passed order u/s 263 of the Act for aspects other than that covered under the scope of limited scrutiny and thereby ignoring CBDT Instruction No. 7/2014, 20/2015 and 5/2016 and CBDT letter dated 30/11/2017 which is self-explanatory. We have heard submission of rival parties on admissibility of additional ground. In view of settled law in the case of NTPC Ltd. 229 ITR 283 (SC) being the issue of legal native and no fresh investigation of facts required, the additional ground is admitted for the grounds raised, the assessee is agitated by action of the CIT in terms of section 263 of the Income-tax Act ) for holding the assessment order dated 16/11/2019 Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 4 after verification of the issue of payment made to specified person in the limited scrutiny category under CASS. Mumbai has erred in not referring to the submission dated 20/02/2019 of the Appellant wherein the issue of payment made to specified person [(Question No. 16 of Notice u/s 142(1)] is already been verified and examined by the to the above, the learned CIT(E), Mumbai has passed order u/s 263 of the Act for aspects other than that covered under the scope of limited scrutiny and thereby ignoring CBDT Instruction No. 7/2014, 20/2015 and 5/2016 explanatory. We have heard submission of rival parties on admissibility of additional ground. In view of settled law in the case of NTPC Ltd. 229 ITR 283 (SC) being the issue of legal native and no fresh ditional ground is admitted for the grounds raised, the assessee is agitated by action of the Act, 1961 (in short ) for holding the assessment order dated 16/11/2019 passed by the Assessing Officer to the interest of the Revenue 4. Briefly stated facts of the (i) the assessee is a registered charitable year under consideration 26/10/2017 declaring Nil income expenditure account, balance sheet Form No. 10 of income filed by the assessee scrutiny for specified persons issued notice under section 143(2) of the duly served upon the assessee. Thereafter the Officer issued notice under section 142(1) dated 8/02/2019 assessee. The assessee fi Shree Aniruddha Upasana Foundation Assessing Officer as erroneous insofar as Revenue. Briefly stated facts of the case are that : the assessee is a registered charitable trust year under consideration filed return of income 017 declaring Nil income, along with income and expenditure account, balance sheet and audit report in Form No. 10B of the Income-tax Rules, 1962. The of income filed by the assessee was selected for limited for verification of payment made specified persons. The Assessing Officer issued notice under section 143(2) of the duly served upon the assessee. Thereafter the issued notice under section 142(1) dated 8/02/2019 calling for detailed information from the assessee. The assessee filed reply of the queries asked Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 5 oneous insofar as prejudicial trust and for the return of income on along with income and and audit report in , 1962. The return was selected for limited verification of payment made to be Assessing Officer accordingly issued notice under section 143(2) of the Act, which was duly served upon the assessee. Thereafter the Assessing issued notice under section 142(1) dated ormation from the led reply of the queries asked vide letter dated 20/02/2019. After considering the submission of the assessee the the returned income 16/11/2019 passed under (ii) Subsequently, the Ld. CIT called for the record and after examination opinion that framed by the prejudicial to the interest of the meaning of section 263 of the show cause notice to the assessee observing that he was of prime facie view that assessment order was erroneous insofar as prejudicial to the interest of the view of the followings: (a) the Assessing Officer ₹6,75,25,296/ section 11 of the Shree Aniruddha Upasana Foundation letter dated 20/02/2019. After considering the submission of the assessee the Assessing Officer the returned income, vide assessmentorder dated 16/11/2019 passed under section 143(3) of the Subsequently, the Ld. CIT called for the record and after examination and verification of the records opinion that the assessment order dated 16/11/2019 framed by the Assessing Officer was erroneous insofar as prejudicial to the interest of the Revenue meaning of section 263 of the Act. Accordingly issued a show cause notice to the assessee observing that he was of prime facie view that assessment order was erroneous as prejudicial to the interest of the view of the followings: Assessing Officer has allowed deduction of 6,75,25,296/- towards the object of the trust under section 11 of the Act, without any enquiry. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 6 letter dated 20/02/2019. After considering the Assessing Officer, accepted , vide assessmentorder dated section 143(3) of the Act. Subsequently, the Ld. CIT called for the record and after and verification of the records, he was of the the assessment order dated 16/11/2019 was erroneous insofar as Revenue within the . Accordingly issued a show cause notice to the assessee observing that he was of prime facie view that assessment order was erroneous as prejudicial to the interest of the Revenue in has allowed deduction of towards the object of the trust under , without any enquiry. (b) The assessee set assessment year 2015 Act According to Ld. CIT, the purpose of development fund is vague and not a specific and not a concrete reason for setting aside the amount. He further ob consideration, the assessee claimed said accommodated fund and the called for details with documentary evidence with respect to the above fund, but the assessee neither replied nor submitte Assessing Officer According to the Ld. CIT same is not allowable under section 11(3) of the (c) From there is a reduction of Shree Aniruddha Upasana Foundation The assessee set-aside ₹2,50,00,000 assessment year 2015-16 under section 11(2) of the Act for the purpose of “development fund”. According to Ld. CIT, the purpose of development fund is vague and not a specific and not a concrete reason for setting aside the amount. He further observed that during the year under consideration, the assessee claimed accommodated fund and the Assessing Officer called for details with documentary evidence with respect to the above fund, but the assessee neither replied nor submitted documentary evidence. The Assessing Officer has also not verified the same. According to the Ld. CIT same is not allowable under section 11(3) of the Act. From the statement of the fixed asse there is a reduction of ₹43,18,981 Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 7 2,50,00,000/- in the 16 under section 11(2) of the development fund”. According to Ld. CIT, the purpose of said development fund is vague and not a specific and not a concrete reason for setting aside the amount. served that during the year under consideration, the assessee claimed utilization of Assessing Officer called for details with documentary evidence with respect to the above fund, but the assessee neither d documentary evidence. The has also not verified the same. According to the Ld. CIT same is not allowable under the statement of the fixed asset, it is seen that 981/- in tangible assets progress not offered the income return of income furnished and assets Officer (iii) After considering submission of the assessee, the Ld. CIT vide impugned order dated 15/03/2022 held the order of the Assessing Officer to the interest of the verification of the and non-verification of reduction in fi capital work in progress, which translated into income for the year under consideration. 5. Aggrieved, the assessee the grounds as reproduced above. Shree Aniruddha Upasana Foundation assets and ₹40,39,390/- from capital work in progress. According to The Ld. CIT the assessee has not offered the income on sale of the assets in the return of income furnished and the issue of sale of assets has not been examined by the Officer in assessment proceedings. After considering submission of the assessee, the Ld. CIT impugned order dated 15/03/2022 held the order of Assessing Officer as erroneous insofar as prejudicial to the interest of the Revenue on the ground of no verification of the utilization of the accumulated verification of reduction in fi capital work in progress, which translated into income for the year under consideration. Aggrieved, the assessee is in appeal before the Tr reproduced above. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 8 from capital work in . According to The Ld. CIT the assessee has sale of the assets in the the issue of sale of has not been examined by the Assessing After considering submission of the assessee, the Ld. CIT impugned order dated 15/03/2022 held the order of as erroneous insofar as prejudicial on the ground of non- accumulated amount verification of reduction in fixed asset and capital work in progress, which translated into income for Tribunal raising 6. Before us the assessee has filed a paperbook (pages 1 to 113) containing interalia, assessment proceedings issued in proceeding under section 263 of the assessee by the same. 7. We have heard rival submission of the parties and perused the relevant material on record. With reference to additiona that under the limited scrutiny assessment, the was authorized only to examine the limited issue of verification of payment to specified persons Ld. counsel referred to the quer 142(1) dated 08/02/2019 (PB reply at serial No. 15 of reply dated 20/02/2019(PB according to the Ld. which the case was selected for scrutiny, Assessing Officer during scrutiny proceedings. Shree Aniruddha Upasana Foundation Before us the assessee has filed a paperbook (pages 1 to 113) interalia, notices issued by the Assessing Officer proceedings, reply of the same by the assessee, notices issued in proceeding under section 263 of the Act and reply of the the same. We have heard rival submission of the parties and perused the relevant material on record. With reference to additiona that under the limited scrutiny assessment, the Assessing Officer ed only to examine the limited issue of verification of to specified persons in terms of section 13 of the counsel referred to the query No. 16 issued 142(1) dated 08/02/2019 (PB- 14). In response, the assessee filed at serial No. 15 of reply dated 20/02/2019(PB counsel of the assessee, the limited point on which the case was selected for scrutiny, was duly verified by the during scrutiny proceedings. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 9 Before us the assessee has filed a paperbook (pages 1 to 113) Assessing Officer during , reply of the same by the assessee, notices and reply of the We have heard rival submission of the parties and perused the relevant material on record. With reference to additional ground Assessing Officer ed only to examine the limited issue of verification of in terms of section 13 of the Act. The ed vide notice u/s 14). In response, the assessee filed at serial No. 15 of reply dated 20/02/2019(PB-18). Thus the limited point on was duly verified by the 7.1 The Ld. counsel of the assessee referred to instruction No. 7 of 2014 dated 26/09/2014 issued by the Central Board of Direct Taxes (CBDT) for restricting the scope of the enquiry proceedings to verification of particular aspects on the basis of the which the case was selected for scrutiny (PB:42 further issued clarification of the instruction No. 7/2014 which i 48-49. Further, the CBDT issued instruction on 14/07/2016 vide instruction No. 5/ 2016 in respect of the cases selected through Computer Assisted Selection o 2016 (PB-50-51). The for converting a lim mentioned in clause referred to letter of DG Vigilance dated 30/11/2017 advising the Assessing Officers to comply restricting in making enquiry in limited scrutiny cases and for Shree Aniruddha Upasana Foundation counsel of the assessee referred to instruction No. 7 of 2014 dated 26/09/2014 issued by the Central Board of Direct Taxes for restricting the scope of the enquiry during assessment to verification of particular aspects on the basis of the which the case was selected for scrutiny (PB:42- ther issued clarification vide letter dated 29/12/2015 in respect of the instruction No. 7/2014 which is placed on paperbook page Further, the CBDT issued instruction on 14/07/2016 vide instruction No. 5/ 2016 in respect of the cases selected through Computer Assisted Selection of Scrutiny (CASS ) cycle 2015 and 51). The Ld. counsel referred to procedure laid down for converting a limited scrutiny case to complete clause 2 to 6 of said Instruction. The Ld. referred to letter of DG Vigilance dated 30/11/2017 advising the s to comply with the instruction of the CBDT for restricting in making enquiry in limited scrutiny cases and for Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 10 counsel of the assessee referred to instruction No. 7 of 2014 dated 26/09/2014 issued by the Central Board of Direct Taxes during assessment to verification of particular aspects on the basis of the -43). The CBDT letter dated 29/12/2015 in respect s placed on paperbook page Further, the CBDT issued instruction on 14/07/2016 vide instruction No. 5/ 2016 in respect of the cases selected through CASS ) cycle 2015 and red to procedure laid down ited scrutiny case to complete scrutiny case Ld. counsel also referred to letter of DG Vigilance dated 30/11/2017 advising the with the instruction of the CBDT for restricting in making enquiry in limited scrutiny cases and for following the procedure for converting a limited complete scrutiny case (PB:52 7.2 The Ld. counsel submitted that the assessment order as of the revenue for non fund and non-verification of reduction in sale of assets and work in progress. According to him, these issues verification of limited scrutiny and limited scrutiny wa converted into complete exceeded his jurisdiction in holding that no enquiry was made by the Assessing Officer to be quashed. In support of the contention, the the decisions of the ITAT Delhi bench in the case of Kumar Vs PCIT reported in (2021) 125 taxmann.com 83 (Delhi) and Gift and Handicrafts Vs C reported in (2008) 19 SOT 5 Shree Aniruddha Upasana Foundation following the procedure for converting a limited scrutiny case into a scrutiny case (PB:52-51). counsel submitted that the Ld. CIT ha assessment order as erroneous insofar as prejudicial to the interest of the revenue for non-verification of utilisation of accumulative verification of reduction in sale of assets and work in progress. According to him, these issues were not included in the verification of limited scrutiny and limited scrutiny wa converted into complete scrutiny, therefore the L exceeded his jurisdiction in holding that no enquiry was made by Assessing Officer. Accordingly, the order of the Ld. CIT deserve In support of the contention, the Ld. counsel relied on of the ITAT Delhi bench in the case of Kumar Vs PCIT reported in (2021) 125 taxmann.com 83 (Delhi) Handicrafts Vs CIT in ITA No 2898/Del/2005 reported in (2008) 19 SOT 5. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 11 scrutiny case into a CIT has held the insofar as prejudicial to the interest verification of utilisation of accumulative verification of reduction in sale of assets and work in were not included in the verification of limited scrutiny and limited scrutiny was never scrutiny, therefore the Ld. CIT has exceeded his jurisdiction in holding that no enquiry was made by the order of the Ld. CIT deserve counsel relied on of the ITAT Delhi bench in the case of Balvinder Kumar Vs PCIT reported in (2021) 125 taxmann.com 83 (Delhi) IT in ITA No 2898/Del/2005 7.3 The Ld. counsel further submitted that for assessment year 2016-17 also the Ld. CIT issued notice for proceeding under section 263 of the Act on the ground for non the accumulated fund erroneous insofar as prejudicial to the interest of the order dated 11/03/2021. under section 143 (3) read with section 263 of the 26/03/2022, no addition was made by the issue of utilization submitted that order passed by the CIT accordingly quashed ITA No. 686/Mum/2021. 8. The Ld. DR on the other hand submitted that the CBDT instructions referred by the assessee for verification of the limited scrutiny cases and converting of lim scrutiny case relates to CASS cycle 2015 and 16 only and no Shree Aniruddha Upasana Foundation counsel further submitted that for assessment year 17 also the Ld. CIT issued notice for proceeding under section on the ground for non-verification of the d and held the order of the Assessing Officer erroneous insofar as prejudicial to the interest of the order dated 11/03/2021. In consequent assessment order passed under section 143 (3) read with section 263 of the , no addition was made by the Assessing Officer of the accumulated fund. The order passed by the CIT dated 11/03/2021 has been quashed by the ITAT vide order dated 05/05 No. 686/Mum/2021. DR on the other hand submitted that the CBDT instructions referred by the assessee for verification of the limited scrutiny cases and converting of limited scrutiny case to complete scrutiny case relates to CASS cycle 2015 and 16 only and no Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 12 counsel further submitted that for assessment year 17 also the Ld. CIT issued notice for proceeding under section verification of the utilization of Assessing Officer as erroneous insofar as prejudicial to the interest of the Revenue vide In consequent assessment order passed under section 143 (3) read with section 263 of the Act dated Assessing Officer on the The Ld. counsel 11/03/2021 has been order dated 05/05/2022 in DR on the other hand submitted that the CBDT instructions referred by the assessee for verification of the limited ited scrutiny case to complete scrutiny case relates to CASS cycle 2015 and 16 only and no instruction has been filed by the assessee relevant to the selection of the instant case, which falls in CASS cycle 2017 & 2018, CIT is justified in holding that no enquiry was made Officer on the issues other than the issues under the limited scrutiny reasons. 8.1 In the rejoinder, the issued with regard to CASS Cycle 2017 enquiry in limited scrutiny 9. We have heard dispute and perused the relevant material on record. In the case, return of income filed by the assessee for year under consideration was selected for limited scrutiny for verificati the specified persons. The issued by the Assessing Officer the Act dated 08/02/2019, which is placed on page Shree Aniruddha Upasana Foundation instruction has been filed by the assessee relevant to the selection of which falls in CASS cycle 2017 & 2018, is justified in holding that no enquiry was made by the on the issues other than the issues under the limited scrutiny In the rejoinder, the Ld. counsel filed a copy of the instruction issued with regard to CASS Cycle 2017 and 2018 for scope of enquiry in limited scrutiny cases. rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case, return of income filed by the assessee for year under consideration was selected for limited scrutiny for verification of payment made to the specified persons. The Ld. counsel has referred to the que Assessing Officer vide notice under section 142 (1) of dated 08/02/2019, which is placed on page Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 13 instruction has been filed by the assessee relevant to the selection of which falls in CASS cycle 2017 & 2018, therefore Ld. by the Assessing on the issues other than the issues under the limited scrutiny copy of the instruction 2018 for scope of rival submission of the parties on the issue in dispute and perused the relevant material on record. In the case, return of income filed by the assessee for year under consideration on of payment made to counsel has referred to the query under section 142 (1) of dated 08/02/2019, which is placed on page 12-14 of the paperbook. The relevant query raised reproduced as under: “16. Details of any amount paid during the previous year to any person referred to in Sub 9.1 The Ld. counsel has referred to the reply submitted by the assessee in response of the above query, which is placed on page 18 of the paperbook. The relevant reply is reproduced as under: “15. no amount has been paid by ‘A’ to any person referred u/s 13(3) of the I.T. Act. 9.2 Thus it is evident that the enquiry on the issue of verification of limited scrutiny reason. 9.3 Further, on perusal find that he has nowhere stated that no verification or any further verification has not been done by the of scrutiny for which the case was selected as limited scrutiny case. The Ld. CIT has held the order of the on the ground of no enquiry on other issues i.e. the issue of non Shree Aniruddha Upasana Foundation paperbook. The relevant query raised by the Assessing Officer reproduced as under: Details of any amount paid during the previous year to any person referred to in Sub-section (3) of section 13.” counsel has referred to the reply submitted by the assessee in response of the above query, which is placed on page 18 of the paperbook. The relevant reply is reproduced as under: no amount has been paid by ‘A’ to any person referred u/s I.T. Act.” it is evident that the Assessing Officer has carried out the enquiry on the issue of verification of limited scrutiny reason. perusal of the impugned order of the find that he has nowhere stated that no verification or any further verification has not been done by the Assessing Officer of scrutiny for which the case was selected as limited scrutiny case. CIT has held the order of the Assessing Officer on the ground of no enquiry on other issues i.e. the issue of non Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 14 Assessing Officer is Details of any amount paid during the previous year to any counsel has referred to the reply submitted by the assessee in response of the above query, which is placed on page 18 of the paperbook. The relevant reply is reproduced as under: no amount has been paid by ‘A’ to any person referred u/s has carried out the enquiry on the issue of verification of limited scrutiny reason. order of the Ld. CIT, we find that he has nowhere stated that no verification or any further Assessing Officer on the issue of scrutiny for which the case was selected as limited scrutiny case. sessing Officer as erroneous on the ground of no enquiry on other issues i.e. the issue of non- verification of utilization verification of reduction in t progress. 9.4 As far as scope of ve concerned the CBDT in instruction No. 7/2014 26/09/2014 has specified that scope of enquiry in limited scrutiny cases should be limited to verification of those particular aspects only and therefore questionnaire and subsequent enquiry or verification only on the specific points on the basis of which the particular return has been selected for scrutiny. It is further provided that if there’s a potential escapement of the income then case into detail scrutiny after prior approval of the higher authorities. The relevant clause of the (supra) is reproduced as under: “4. In case, during the course of assessment proceedings, it is found that there is potential escapement of income exceeding Shree Aniruddha Upasana Foundation utilization of the accumulated fund and non verification of reduction in tangible assets and capital work As far as scope of verification in limited scrutiny cases is concerned the CBDT in instruction No. 7/2014 vide 26/09/2014 has specified that scope of enquiry in limited scrutiny cases should be limited to verification of those particular aspects only and therefore the Assessing Officer shall confine questionnaire and subsequent enquiry or verification only on the specific points on the basis of which the particular return has been selected for scrutiny. It is further provided that if there’s a potential ent of the income then Assessing Officer may convert the case into detail scrutiny after prior approval of the higher authorities. The relevant clause of the Instruction is reproduced as under: 4. In case, during the course of assessment proceedings, it is found that there is potential escapement of income exceeding ₹10 lakhs Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 15 fund and non- angible assets and capital work-in- rification in limited scrutiny cases is vide letter dated 26/09/2014 has specified that scope of enquiry in limited scrutiny cases should be limited to verification of those particular aspects shall confine the questionnaire and subsequent enquiry or verification only on the specific points on the basis of which the particular return has been selected for scrutiny. It is further provided that if there’s a potential may convert the case into detail scrutiny after prior approval of the higher Instruction No. 7/2014 4. In case, during the course of assessment proceedings, it is found ₹10 lakhs (for non-metro charges, the monetary limit shall be any other issue(s) apart from the AIR/CIB/26AS informatio based on which the case was selected under CASS requiring substantial verification, the case may be taken up for comprehensive scrutiny with the approval of the Pr. CIT/DIT concerned. However, such an approval shall be accorded by the Pr. CIT/DIT in writ issue(s) necessitating wider and detailed scrutiny in the case. Cases so taken up for detailed scrutiny shall be monitored by the Jt. CIT/Addl. CIT concerned. 9.5 Regarding the scope of enquiry in limited scrutiny cases, the CBDT vide letter dated 29/12/2015 has further clarified as under: “3. As far as the returns selected for scrutiny through CASS are concerned, two type of cases have been selected for scruti the current Financial Year 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in 'Limited Scrutiny' or 'Complete Scrutiny' through notices issued under secti 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 s Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny. Shree Aniruddha Upasana Foundation metro charges, the monetary limit shall be ₹5 lakhs) on any other issue(s) apart from the AIR/CIB/26AS informatio based on which the case was selected under CASS requiring substantial verification, the case may be taken up for comprehensive scrutiny with the approval of the Pr. CIT/DIT concerned. However, such an approval shall be accorded 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 monitored by the Jt. CIT/Addl. CIT concerned.” Regarding the scope of enquiry in limited scrutiny cases, the letter dated 29/12/2015 has further clarified as under: 3. As far as the returns selected for scrutiny through CASS are concerned, two type of cases have been selected for scruti 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 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. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 16 ₹5 lakhs) on any other issue(s) apart from the AIR/CIB/26AS information based on which the case was selected under CASS requiring substantial verification, the case may be taken up for comprehensive scrutiny with the approval of the Pr. CIT/DIT concerned. However, such an approval shall be accorded by the Pr. ing 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 monitored by the Jt. Regarding the scope of enquiry in limited scrutiny cases, the letter dated 29/12/2015 has further clarified as under: 3. As far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in 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 on 143(2) of tax Act, 1961 ('Act'). The procedure for handling a. In 'Limited Scrutiny' cases, the reasons/issues shall be forthwith ection 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. fiv (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 approva 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 shall be monitored by the Range Head concerned. The procedure indicated at point 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). 9.6 For cases selected through CASS cycle 2015 and 2016 the CBDT has further emphasi scrutiny should be restricted to the relevant parameters which formed the basis for selecting the case for the scrutiny and the Assessing Officer shall not proceed to make other inquiries exce Shree Aniruddha Upasana Foundation Further, the scope of enquiry shall be restricted to the 'Limited Scrutiny' issues. s shall be completed expeditiously in a limited number 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. fiv (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 shall 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). For cases selected through CASS cycle 2015 and 2016 the has further emphasized that scrutiny proceeding in limited scrutiny should be restricted to the relevant parameters which formed the basis for selecting the case for the scrutiny and the shall not proceed to make other inquiries exce Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 17 Further, the scope of enquiry shall be restricted to the 'Limited s shall be completed expeditiously in a limited number 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 l 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 shall be monitored by the Range s (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).” For cases selected through CASS cycle 2015 and 2016 the that scrutiny proceeding in limited scrutiny should be restricted to the relevant parameters which formed the basis for selecting the case for the scrutiny and the shall not proceed to make other inquiries except with the prior approval of the higher authorities. clauses of the instruction are reproduced as under: “INSTRUCTION NO.5/2016 IF.NO.225/269/2015 vide Instruction No. 20/2015 dated 29.12.2015 in File of even number, has laid down Standard Operating Procedure for handling of cases under 'Limited Scrutiny' which were selected through Computer Aided Scrutiny Selection in 'CASS Cycle 2015'. in these cases, it was stated that the general scope of enquiry in scrutiny parameters which formed the basis for selecting the case for scrutiny. However, in revenue potential cases, it was further provided that 'Complete Scrutiny' could be conducted, if there was potential escapem prescribed monetary limit, subject to the approval of administrative Pr. CIT/CIT/Pr.DIT/DIT. 2. In order to ensure that maximum objectivity is maintained in converting a case falling under 'Limited Scrutiny' into a 'Complete Scrutiny' has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under Complete Scrutiny'. In this regard, the monetary limits and equirement of administrat as prescribed in Para 3(d) of earlier Instruction dated 9.12.2015, shall continue to remain applicable. Shree Aniruddha Upasana Foundation with the prior approval of the higher authorities. clauses of the instruction are reproduced as under: INSTRUCTION NO.5/2016 IF.NO.225/269/2015-ITA.111, DATED 14-7-2016 vide Instruction No. 20/2015 dated 29.12.2015 in File of even number, has laid down Standard Operating Procedure for handling of cases under 'Limited Scrutiny' which were selected through Computer Aided Scrutiny Selection in 'CASS Cycle 2015'. in these cases, it was stated that the general scope of enquiry in scrutiny proceedings should be restricted to the relevant parameters which formed the basis for selecting the case for scrutiny. However, in revenue potential cases, it was further provided that 'Complete Scrutiny' could be conducted, if there was potential escapement of income above a prescribed monetary limit, subject to the approval of administrative Pr. 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 utiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under Complete Scrutiny'. In this regard, the monetary limits and equirement of administrative approval from Pr. CIT/CIT/Pr.IT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 9.12.2015, shall continue Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 18 with the prior approval of the higher authorities. The relevant ITA.111, DATED vide Instruction No. 20/2015 dated 29.12.2015 in File of even number, Board has laid down Standard Operating Procedure for handling of cases under 'Limited Scrutiny' which were selected through Computer Aided Scrutiny Selection in 'CASS Cycle 2015'. in these cases, it was stated that the general proceedings should be restricted to the relevant parameters which formed the basis for selecting the case for scrutiny. However, in revenue potential cases, it was further provided that 'Complete Scrutiny' ent of income above a prescribed monetary limit, subject to the approval of administrative Pr. 2. In order to ensure that maximum objectivity is maintained in converting a 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 utiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under Complete Scrutiny'. In this regard, the monetary ive approval from Pr. CIT/CIT/Pr.IT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 9.12.2015, shall continue 3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on such view; b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct nexus between the available material and formation of such view. 4. It is further clarified that in cases under 'Limited Scrutiny', the scrutiny assessment proceedings would initially be confined only '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 conce 'Complete Scrutiny' in such cases. 5. It is also clarified that once a case has been converted to 'Complete Scrutiny', the AO can deal with any issue emerging from ongoing scrutiny proceedings notwithstanding the fact that the have not been included in the Note. 6. To ensure proper monitoring in cases which have been converted from 'Limited Scrutiny' to 'Complete Scrutiny', it is suggested, that provisions of section 144A of the Act may be invoked in suitab of fishing and roving enquiries in such cases, it is desirable that these cases Shree Aniruddha Upasana Foundation 3. Further, while forming the reasonable view, the Assessing Officer would e material or information available on record for forming this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and there must be a direct nexus between the available material and formation of 4. It is further clarified that in cases under 'Limited Scrutiny', the scrutiny assessment proceedings would initially be confined only to issues under 'Limited Scrutiny' and questionnaires, enquiry, investigation etc. would be ues. 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. 5. It is also clarified that once a case has been converted to 'Complete Scrutiny', the AO can deal with any issue emerging from ongoing scrutiny proceedings notwithstanding the fact that the reason for such issue have not been included in the Note. 6. To ensure proper monitoring in cases which have been converted from 'Limited Scrutiny' to 'Complete Scrutiny', it is suggested, that provisions of section 144A of the Act may be invoked in suitable cases. To prevent possibility of fishing and roving enquiries in such cases, it is desirable that these cases Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 19 3. Further, while forming the reasonable view, the Assessing Officer would record for forming this reasonable view should not be based on mere suspicion, conjecture or there must be a direct nexus between the available material and formation of 4. It is further clarified that in cases under 'Limited Scrutiny', the scrutiny to issues under 'Limited Scrutiny' and questionnaires, enquiry, investigation etc. would be ues. 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 rned regarding conducting 'Complete Scrutiny', the AO can deal with any issue emerging from ongoing reason for such issue 6. To ensure proper monitoring in cases which have been converted from 'Limited Scrutiny' to 'Complete Scrutiny', it is suggested, that provisions of le cases. To prevent possibility of fishing and roving enquiries in such cases, it is desirable that these cases should invariably be picked up while conducting Review or Inspection by the administrative authorities. 7. The above Instruction shall be appli cover the cases selected under CASS 2015 which are pending scrutiny cases as well as cases selected/being selected under the CASS 2016. 8. The contents of this Instruction may be brought to the notice of all for necessary compliance. 10. In respect of cases selected under CASS cycle 2017 and 2018, the CBDT issued instruction the Assessing Officer directed to comply the earlier instruction issued for scope of enquiry in limited directed that in case of any information of tax evasion received from the Enforcement Agencies that information with the prior approval of the concerned of higher authorities. For ready re reproduced as under: “To All Principal Chief-Commissioners of Income Generals of Income-tax Shree Aniruddha Upasana Foundation should invariably be picked up while conducting Review or Inspection by the administrative authorities. The above Instruction shall be applicable from the date of its issue and would cover the cases selected under CASS 2015 which are pending scrutiny cases as well as cases selected/being selected under the CASS 2016. 8. The contents of this Instruction may be brought to the notice of all for ecessary compliance.” In respect of cases selected under CASS cycle 2017 and 2018, the CBDT issued instruction vide letter dated 28/11/2018, wherein the Assessing Officer directed to comply the earlier instruction issued for scope of enquiry in limited scrutiny cases and further directed that in case of any information of tax evasion received from Enforcement Agencies, then the Assessing Officer that information with the prior approval of the concerned of higher uthorities. For ready reference, the relevant instruction is reproduced as under: Commissioners of Income-tax/All Principa tax Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 20 should invariably be picked up while conducting Review or Inspection by the cable from the date of its issue and would cover the cases selected under CASS 2015 which are pending scrutiny cases as 8. The contents of this Instruction may be brought to the notice of all for In respect of cases selected under CASS cycle 2017 and 2018, letter dated 28/11/2018, wherein the Assessing Officer directed to comply the earlier instruction scrutiny cases and further directed that in case of any information of tax evasion received from Assessing Officer may examine that information with the prior approval of the concerned of higher , the relevant instruction is tax/All Principal Director- Sir/Madam, Subject: Scope of enquiry in Limited Scrutiny cases selected under CASS cycles 2017 and 2018 in the intelligence/regulatory authority or agency Under CASS cycles 2017 and 2018, some of the cases were selected for scrutiny as a "Limited Scrutiny" case. It Limited Scrutiny' cases, A travel beyond the issues) for which the case was selected. a stipulation is to enforce checks and balances up Officer to do fishing and roving enquiries in cases under 'Limited Scrutiny' 2. In this regard, several representations have been received in the Board from the field authorities that in several cases under 'Limited Scrutiny', information pointing out specific tax enforcement/intelligence/regulatory authority or agency is available with the concerned Assessing Officer, however, in view of the restrictive nature of enquiry/investigation which can be made in 'Limited Scrutiny" cases, the same presently cannot be acted upon. 3. The matter has been considered by the Board. In order to enable proper enquiry/ investigation in pending through CASS cycles of 2017 and 2018, where credible material or information has been/is provided by any law authority or agency regarding tax by the Board that issues arising from such information can also be examined during the course of conduct of assessment proceedings in such "Limited Scrutiny' cases with prior administrative approval of the concerned Pr. CIT/CIT. 4. It is pertinent to mention that unlike CASS 2015 and 2016 cycles, where consideration of any additional issue lead to the conversion of case to Shree Aniruddha Upasana Foundation Subject: Scope of enquiry in Limited Scrutiny cases selected under CASS cycles context of information provided by any law intelligence/regulatory authority or agency redg.- Under CASS cycles 2017 and 2018, some of the cases were selected for scrutiny as a "Limited Scrutiny" case. It Limited Scrutiny' cases, Assessing Officer cannot travel beyond the issues) for which the case was selected. The idea behind such o enforce checks and balances upon powers of an Assessing Officer to do fishing and roving enquiries in cases under 'Limited Scrutiny' 2. In this regard, several representations have been received in the Board from the field authorities that in several cases under 'Limited Scrutiny', information pointing out specific tax-evasion for the relevant year, given by any law igence/regulatory authority or agency is available with the concerned Assessing Officer, however, in view of the restrictive nature of enquiry/investigation which can be made in 'Limited Scrutiny" cases, the same presently cannot be acted upon. er has been considered by the Board. In order to enable proper enquiry/ investigation in pending 'Limited Scrutiny' cases which were selected ycles of 2017 and 2018, where credible material or information has been/is provided by any law-enforcement/intelligence/regulatory authority or agency regarding tax-evasion by an assessee, it has been decided by the Board that issues arising from such information can also be examined during the course of conduct of assessment proceedings in such "Limited Scrutiny' cases with prior administrative approval of the concerned Pr. 4. It is pertinent to mention that unlike CASS 2015 and 2016 cycles, where consideration of any additional issue lead to the conversion of case to Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 21 Subject: Scope of enquiry in Limited Scrutiny cases selected under CASS cycles context of information provided by any law-enforcement/ Under CASS cycles 2017 and 2018, some of the cases were selected for scrutiny ssessing Officer cannot The idea behind such on powers of an Assessing Officer to do fishing and roving enquiries in cases under 'Limited Scrutiny'. 2. In this regard, several representations have been received in the Board from the field authorities that in several cases under 'Limited Scrutiny', information evasion for the relevant year, given by any law- igence/regulatory authority or agency is available with the concerned Assessing Officer, however, in view of the restrictive nature of enquiry/investigation which can be made in 'Limited Scrutiny" cases, the same er has been considered by the Board. In order to enable proper 'Limited Scrutiny' cases which were selected ycles of 2017 and 2018, where credible material or information cement/intelligence/regulatory evasion by an assessee, it has been decided by the Board that issues arising from such information can also be examined during the course of conduct of assessment proceedings in such "Limited Scrutiny' cases with prior administrative approval of the concerned Pr. 4. It is pertinent to mention that unlike CASS 2015 and 2016 cycles, where consideration of any additional issue lead to the conversion of case to "Complete Scrutiny" as laid pending 'Limited Scrutiny' cases of CASS 2017 and 2018 taken up for "Complete consideration of those issues wherein specific in tax-evasion has been furnished by any law enforcement/intelligence/regulatory authority or agency. Assessing Officer shall not expand the scope issue(s) on which the case w from nature of information mentioned in para 2 and 3. Above 5. The following procedure shall be adopted while examining the additional issue: i. The Assessing Officer shall duly record the reasons for expan 'Limited Scrutiny" to the extent mentioned in para 2 and 3, above; ii. The same shall be placed before the Pr. CIT/CIT concerned and upon his approval, further issue can be considered during the assessment proceeding: iii. The Assessing Officer shall issue an intimation to the assessee concerned that additional issue would also be considered during the course of pending assessment proceeding: iv. To ensure proper monitoring in these cases, provisions of section 144A of the Income-tax Act, 1961 may be invoked in suitable cases. Further, to prevent fishing and roving enquiries in these cases, it is desirable that these cases are invariably picked up for Review/Inspection by the administrative authorities. 6. The above directive shall be appli apply to the pending "Limited Scrutiny' cases which were selected under the CASS 2017 and 2018 cycles. It is reiterated that the grounds mentioned in para 3 above are the only grounds on which a 'Limited Scrutiny' Shree Aniruddha Upasana Foundation "Complete Scrutiny" as laid down in Instruction No. 5/2016 dated 14.07.16. the pending 'Limited Scrutiny' cases of CASS 2017 and 2018 cycles would not be taken up for "Complete Scrutiny" as the present directive is only to facilitate consideration of those issues wherein specific information Therefore, in such evasion has been furnished by any law nforcement/intelligence/regulatory authority or agency. 'Limited Scrutiny’ Assessing Officer shall not expand the scope enquiry/investigation beyond the issue(s) on which the case was flagged for Limited Scrutiny' & issue arising from nature of information mentioned in para 2 and 3. Above. 5. The following procedure shall be adopted while examining the additional i. The Assessing Officer shall duly record the reasons for expanding the scope of 'Limited Scrutiny" to the extent mentioned in para 2 and 3, above; . The same shall be placed before the Pr. CIT/CIT concerned and upon his approval, further issue can be considered during the assessment proceeding: fficer shall issue an intimation to the assessee concerned that additional issue would also be considered during the course of pending assessment proceeding: iv. To ensure proper monitoring in these cases, provisions of section 144A of the 1961 may be invoked in suitable cases. Further, to prevent fishing and roving enquiries in these cases, it is desirable that these cases are invariably picked up for Review/Inspection by the administrative authorities. 6. The above directive shall be applicable from the date of its issue and shall apply to the pending "Limited Scrutiny' cases which were selected under the CASS 2017 and 2018 cycles. It is reiterated that the grounds mentioned in para 3 above are the only grounds on which a 'Limited Scrutiny' case of CASS 2017 Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 22 down in Instruction No. 5/2016 dated 14.07.16. the ycles would not be Scrutiny" as the present directive is only to facilitate Therefore, in such of evasion has been furnished by any law- 'Limited Scrutiny’ enquiry/investigation beyond the as flagged for Limited Scrutiny' & issue arising 5. The following procedure shall be adopted while examining the additional ding the scope of 'Limited Scrutiny" to the extent mentioned in para 2 and 3, above; . The same shall be placed before the Pr. CIT/CIT concerned and upon his approval, further issue can be considered during the assessment proceeding: fficer shall issue an intimation to the assessee concerned that additional issue would also be considered during the course of pending iv. To ensure proper monitoring in these cases, provisions of section 144A of the 1961 may be invoked in suitable cases. Further, to prevent fishing and roving enquiries in these cases, it is desirable that these cases are invariably picked up for Review/Inspection by the administrative authorities. cable from the date of its issue and shall apply to the pending "Limited Scrutiny' cases which were selected under the CASS 2017 and 2018 cycles. It is reiterated that the grounds mentioned in para case of CASS 2017 and 2018 cycles can be expanded in its scope and that too only to the extent of the issues referred to by the law authority or agency. 7. It may be brought to the notice of all for necessary compliance 10.1 In view of above Assessing Officer was not authorized to travel beyond the enquiry on the issue for which case was selected for scrutiny and enquiry on the issues as observed the Act on the issue of non accumulated fund and reduction in sale of progress, were beyond the scope of the limited scrutiny. The has not brought before the Assessing Officer for converting the limited scrutiny case into a completely scrutiny case. 10.2 Further, we find that (supra) after analyzing of limited scrutiny held that it would not be open for the PCIT to Shree Aniruddha Upasana Foundation and 2018 cycles can be expanded in its scope and that too only to the extent of the issues referred to by the law-enforcement/intelligence/regulatory 7. It may be brought to the notice of all for necessary compliance. above instruction of the CBDT, it is evident that was not authorized to travel beyond the enquiry on the issue for which case was selected for scrutiny and enquiry on as observed by the Ld. CIT in order under section 263 of the Act on the issue of non-verification of utilization of the fund and reduction in sale of asset and capital work in , were beyond the scope of the limited scrutiny. The has not brought before us whether any permission was sought by the Assessing Officer for converting the limited scrutiny case into a completely scrutiny case. we find that Tribunal in the case of Balvinder Kumar (supra) after analyzing CBDT instructions on the issue of the scope of limited scrutiny held that it would not be open for the PCIT to Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 23 and 2018 cycles can be expanded in its scope and that too only to the extent of enforcement/intelligence/regulatory .” , it is evident that Ld. was not authorized to travel beyond the enquiry on the issue for which case was selected for scrutiny and enquiry on CIT in order under section 263 of verification of utilization of the and capital work in , were beyond the scope of the limited scrutiny. The Ld. DR us whether any permission was sought by the Assessing Officer for converting the limited scrutiny case into a in the case of Balvinder Kumar sue of the scope of limited scrutiny held that it would not be open for the PCIT to pass revisionary order under section 263 in the case of limited scrutiny, where the Assessing Officer could not go beyond reason for which matter was selected for limited s of the Tribunal (supra) “8. We have gone through the record in the light of the submissions made on either side. There is no dispute that the case of the assessee was picked up for scrutiny under the category of limited scrutiny. This fact is established from the assessment order and also the notice issued under section 143(2) of the Act. It is also not in dispute that the CBDT issued the instructions relied upon by the assessee and for the sake of convenience we extract the relevant portions thereof hereunder: - “CBDT Instruction No. 7/2014 The reason(s) for selection of cases under CASS are displayed to the Assessing Officer in AST application and notice u/s 143(2), after generation from AST, is issued to the taxpayer with the remark ".Selected under Computer Aided Scrutiny Selec being modified suitably to flag the reasons for scrutiny selection in AIR/CIB/26AS cases. This functionality is expected to be operationalized by 15th October, 2014. Further, the Assessing Officer while issuing not section 142(1) of the Act which is enclosed with the first questionnaire would proceed to verify only the specific aspects requiring examination/verification. In such cases, all efforts would be made to ensure that assessment proceedings are completed expeditiously in minimum possible number of hearings without unnecessarily dragging the case till the time CBDT Instruction No. 20/2015 Shree Aniruddha Upasana Foundation order under section 263 in the case of limited scrutiny, where the Assessing Officer could not go beyond reason for which matter was selected for limited scrutiny. The relevant finding (supra) is reproduced as under: 8. We have gone through the record in the light of the submissions made on either side. There is no dispute that the case of the assessee was picked up for scrutiny under the category of limited scrutiny. This fact is established from the and also the notice issued under section 143(2) of the Act. It is also not in dispute that the CBDT issued the instructions relied upon by the assessee and for the sake of convenience we extract the relevant portions No. 7/2014 The reason(s) for selection of cases under CASS are displayed to the Assessing Officer in AST application and notice u/s 143(2), after generation from AST, is issued to the taxpayer with the remark ".Selected under Computer Aided Scrutiny Selection (CASS)". The functionality in AST is being modified suitably to flag the reasons for scrutiny selection in AIR/CIB/26AS cases. This functionality is expected to be operationalized by 15th October, 2014. Further, the Assessing Officer while issuing not section 142(1) of the Act which is enclosed with the first questionnaire would only the specific aspects requiring examination/verification. In such cases, all efforts would be made to ensure that assessment proceedings leted expeditiously in minimum possible number of hearings without unnecessarily dragging the case till the time-barring date. CBDT Instruction No. 20/2015 Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 24 order under section 263 in the case of limited scrutiny, where the Assessing Officer could not go beyond reason for crutiny. The relevant finding 8. We have gone through the record in the light of the submissions made on either side. There is no dispute that the case of the assessee was picked up for scrutiny under the category of limited scrutiny. This fact is established from the and also the notice issued under section 143(2) of the Act. It is also not in dispute that the CBDT issued the instructions relied upon by the assessee and for the sake of convenience we extract the relevant portions No. 7/2014 The reason(s) for selection of cases under CASS are displayed to the Assessing Officer in AST application and notice u/s 143(2), after generation from AST, is issued to the taxpayer with the remark ".Selected tion (CASS)". The functionality in AST is being modified suitably to flag the reasons for scrutiny selection in AIR/CIB/26AS cases. This functionality is expected to be operationalized by 15th October, 2014. Further, the Assessing Officer while issuing notice under section 142(1) of the Act which is enclosed with the first questionnaire would only the specific aspects requiring examination/verification. In such cases, all efforts would be made to ensure that assessment proceedings leted expeditiously in minimum possible number of hearings without 3. As far as the returns selected for scrutiny through CASS two type of cases have been selected for scrutiny in the current Financial Yearone 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 no the Income-tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: (a) .... (b) The Questionnaire under section 142(1) of the Act in 1Limited Scrutiny * cases shallre nut in confi has been picked upforscrutiny.Further, the scope of enquiry shall be restricted to the Limited Scrutiny’ issues. CBDT Instruction No. 5/2016 “4. It is further clarified that in cases under 'Limited S assessment proceedings would initially be confined only to issues under 'Limited Scrutiny' and Questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon comers ion of case to 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.” C have come to notice of CBDT where some Assessing Officers are travelling beyond their jurisdiction while making assessments in Limited scrutiny cases by initiating inquiries on new issues without complying with manda requirements of the relevant CBDT Instructions dated 26 and 14-7-2016. These instances have been viewed very seriously by the CBDT and in one case the Central Inspection Team of the CBDT was tasked with Shree Aniruddha Upasana Foundation 3. As far as the returns selected for scrutiny through CASS-2015 are concerned, have been selected for scrutiny in the current Financial Yearone 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 tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: (b) The Questionnaire under section 142(1) of the Act in 1Limited Scrutiny * cases shallre nut in confined only to the specific reasons/issues for which case has been picked upforscrutiny.Further, the scope of enquiry shall be restricted to the Limited Scrutiny’ issues. CBDT Instruction No. 5/2016 “4. It is further clarified that in cases under 'Limited Scrutiny assessment proceedings would initially be confined only to issues under 'Limited Scrutiny' and Questionnaires, enquiry, investigation etc. would be restricted to such issues. Only upon comers ion of case to 'Complete Scrutiny' 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.” CBDT Letter dated 30.11.2017 J Instances have come to notice of CBDT where some Assessing Officers are travelling beyond their jurisdiction while making assessments in Limited scrutiny cases by initiating inquiries on new issues without complying with manda requirements of the relevant CBDT Instructions dated 26-9-2014, 29 2016. These instances have been viewed very seriously by the CBDT and in one case the Central Inspection Team of the CBDT was tasked with Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 25 2015 are concerned, have been selected for scrutiny in the current Financial Yearone is'Limited Scrutiny' and other is Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in 'Limited tices issued under section 143(2) of tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' (b) The Questionnaire under section 142(1) of the Act in 1Limited Scrutiny * ned only to the specific reasons/issues for which case has been picked upforscrutiny.Further, the scope of enquiry shall be restricted crutiny \ the scrutiny assessment proceedings would initially be confined only to issues under 'Limited Scrutiny' and Questionnaires, enquiry, investigation etc. would be 'Complete Scrutiny' 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 BDT Letter dated 30.11.2017 J Instances have come to notice of CBDT where some Assessing Officers are travelling beyond their jurisdiction while making assessments in Limited scrutiny cases by initiating inquiries on new issues without complying with mandatory 2014, 29-12-2015 2016. These instances have been viewed very seriously by the CBDT and in one case the Central Inspection Team of the CBDT was tasked with examination of assessment rec irregularities. Amongst other irregularities, it was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was taken from the PCIT for the conversion of the limited sc complete scrutiny case and the order sheet was maintained very perfunctorily. This gave rise to a very strong suspicion of mala fide intentions.” 9. The above CBDT instructions and the letter clearly establish that it’s not open for the learned Assessing Officer to travellers beyond the reason for selection of the matter for limited scrutiny and on that aspect the assessment order in this case is in accordance with the instructions governing the field. In such circumstances it has to be se assessment order to be erroneous insofar as it is prejudicial to the interest of the Revenue for the learned Assessing Officer not considering the aspects which are beyond the purview of limited scrutiny. 10. In the Deccan Paper Mills Co. Ltd. vs. CIT in ITA 1013 AND 1635/PUN/2015, Pune Bench of the Tribunal held, that, “40. Now, coming to the aspect of book profits which was considered by the Commissioner and the order of the Assessing Officer was held to be erroneous and prejudicial to the interest of revenue. In this regard, it may be pointed out that the case of assessee was picked up for scrutiny under CASS for the limited purpose of verifying the Chapter VI specific purpose under CASS, then it is outside the purview of the Assessing Officer to look into any other aspect oth up. Hence, the Assessing Officer has not formed any opinion in respect of computation of book profits in the hands of assessee. Once, no such opinion has been formed by the Assessing Officer, the Commissioner has e order of the Assessing Officer to be erroneous and prejudicial to the interest of revenue in this regard. Shree Aniruddha Upasana Foundation examination of assessment records on receipt of a I lee at ions of several Amongst other irregularities, it was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was taken from the PCIT for the conversion of the limited scrutiny case to a complete scrutiny case and the order sheet was maintained very perfunctorily. This gave rise to a very strong suspicion of mala fide intentions.” 9. The above CBDT instructions and the letter clearly establish that it’s not open earned Assessing Officer to travellers beyond the reason for selection of the matter for limited scrutiny and on that aspect the assessment order in this case is in accordance with the instructions governing the field. In such circumstances it has to be seen whether the Ld. PCIT is justified in holding the assessment order to be erroneous insofar as it is prejudicial to the interest of the Revenue for the learned Assessing Officer not considering the aspects which are beyond the purview of limited scrutiny. 10. In the Deccan Paper Mills Co. Ltd. vs. CIT in ITA 1013 AND 1635/PUN/2015, Pune Bench of the Tribunal held, that, “40. Now, coming to the aspect of book profits which was considered by the Commissioner and the order of the Assessing Officer was held to be erroneous and prejudicial to the interest of revenue. In this regard, it may be pointed out see was picked up for scrutiny under CASS for the limited purpose of verifying the Chapter VI-A deduction. Once the case is picked up for specific purpose under CASS, then it is outside the purview of the Assessing Officer to look into any other aspect other than the aspect for which it is picked up. Hence, the Assessing Officer has not formed any opinion in respect of computation of book profits in the hands of assessee. Once, no such opinion has been formed by the Assessing Officer, the Commissioner has erred in holding the order of the Assessing Officer to be erroneous and prejudicial to the interest of revenue in this regard. Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 26 a I lee at ions of several Amongst other irregularities, it was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was rutiny case to a complete scrutiny case and the order sheet was maintained very perfunctorily. 9. The above CBDT instructions and the letter clearly establish that it’s not open earned Assessing Officer to travellers beyond the reason for selection of the matter for limited scrutiny and on that aspect the assessment order in this case is in accordance with the instructions governing the field. In such en whether the Ld. PCIT is justified in holding the assessment order to be erroneous insofar as it is prejudicial to the interest of the Revenue for the learned Assessing Officer not considering the aspects which 10. In the Deccan Paper Mills Co. Ltd. vs. CIT in ITA 1013 AND 1635/PUN/2015, “40. Now, coming to the aspect of book profits which was considered by the Commissioner and the order of the Assessing Officer was held to be erroneous and prejudicial to the interest of revenue. In this regard, it may be pointed out see was picked up for scrutiny under CASS for the limited A deduction. Once the case is picked up for specific purpose under CASS, then it is outside the purview of the Assessing er than the aspect for which it is picked up. Hence, the Assessing Officer has not formed any opinion in respect of computation of book profits in the hands of assessee. Once, no such opinion has rred in holding the order of the Assessing Officer to be erroneous and prejudicial to the interest of Accordingly, we reverse the findings of the Commissioner. that the order passed by the Commissioner under se invalid and the same is quashed for both the assessment years.” In M/s R.H. Property vs. PCIT, ITA No. 1906/Mum/2019 it was held that, “As a matter of fact, what cannot be done directly cannot be done indirectly. Accordingly, in terms of our aforesaid observations, we are of the view that as the A.O had the assessee was selected for attributed to his order for the other issues which were clearly beyond the case of the assessee was selected for limited scrutiny We thus not being able to concur with the view order passed by the A.O under Sec. 143(3), dated 10.10.2016is erroneous, therefore, set aside his order and restore the order passed by the A.O. As wehave quashed the order passed by the Pr. CIT under Sec. 263 on the ground assumption of jurisdiction by him, therefore, we refrain from adverting to and therein adjudicating the contentions advanced by the Id. A. Ron the merits of the case, which thus are left open.” 11. Similarly, is the view taken consistently by the benches of this Tribunal in the other two cases also, relied upon by the assessee. In the circumstances, in view of the consistent view taken in similar matters we are of the considered opinion that when the assessing officer is bound to follow the CBDT and after verification of the material furnished by the assessee on the aspect covered by the limited scrutiny, is not open for the Ld. PCIT to say that not adverting to the other aspects of the competiti order erroneous and prejudicial to the interest of the Revenue. With this view of the matter we find that the impugned order cannot be sustained and, therefore, the same is liable to be quashed. We accordingly quash the same. Shree Aniruddha Upasana Foundation Accordingly, we reverse the findings of the Commissioner. Accordingly, we hold that the order passed by the Commissioner under section 263 of the Act is invalid and the same is quashed for both the assessment years.” In M/s R.H. Property vs. PCIT, ITA No. 1906/Mum/2019 it was held that, “As a matter of fact, what cannot be done directly cannot be done indirectly. terms of our aforesaid observations, we are of the O had aptly confined himself to the issue for which the case of the assessee was selected for limited scrutiny, therefore, no infjrmity can be attributed to his order for the reason. that he had failed to dwell other issues which were clearly beyond the realm of the reason for which the case of the assessee was selected for limited scrutiny as per the AIR information. We thus not being able to concur with the view taken by the f J r. CIT that the order passed by the A.O under Sec. 143(3), dated 10.10.2016is erroneous, therefore, set aside his order and restore the order passed by the A.O. As wehave quashed the order passed by the Pr. CIT under Sec. 263 on the ground assumption of jurisdiction by him, therefore, we refrain from adverting to and adjudicating the contentions advanced by the Id. A. Ron the merits of are left open.” 11. Similarly, is the view taken consistently he benches of this Tribunal in the other two cases also, relied upon by the assessee. In the circumstances, in view of the consistent view taken in similar matters we are of the considered opinion that when the assessing officer is bound to follow the CBDT instructions and while following such instructions and after verification of the material furnished by the assessee on the aspect covered by the limited scrutiny, is not open for the Ld. PCIT to say that not adverting to the other aspects of the competition would render the assessment order erroneous and prejudicial to the interest of the Revenue. With this view of the matter we find that the impugned order cannot be sustained and, therefore, the same is liable to be quashed. We accordingly quash the same.” Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 27 Accordingly, we hold ction 263 of the Act is In M/s R.H. Property vs. PCIT, ITA No. 1906/Mum/2019 it was held that,- “As a matter of fact, what cannot be done directly cannot be done indirectly. terms of our aforesaid observations, we are of the considered aptly confined himself to the issue for which the case of limited scrutiny, therefore, no infjrmity can be reason. that he had failed to dwell upon certain realm of the reason for which the as per the AIR information. taken by the f J r. CIT that the order passed by the A.O under Sec. 143(3), dated 10.10.2016is erroneous, therefore, set aside his order and restore the order passed by the A.O. As wehave 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 adjudicating the contentions advanced by the Id. A. Ron the merits of are left open.” 11. Similarly, is the view taken consistently he benches of this Tribunal in the other two cases also, relied upon by the assessee. In the circumstances, in view of the consistent view taken in similar matters we are of the considered opinion that when the assessing officer is instructions and while following such instructions and after verification of the material furnished by the assessee on the aspect covered by the limited scrutiny, is not open for the Ld. PCIT to say that not on would render the assessment order erroneous and prejudicial to the interest of the Revenue. With this view of the matter we find that the impugned order cannot be sustained and, therefore, ” 10.3 Further, the Tribunal in the case of Gift and Handicrafts (supra) has held as under: “17. With regard to allowing deduction under section 80HHC in spite of there being a loss as defined under clause (baa) of Explanation to section 80HHC, it is seen 80HHC(3) have been 1992 and in the light of the a foresaid amendment the claim of the assessee is in accordance with law. Even otherwise as already held by us, the claim for deduction subject-matter of the limited scrutiny assessment and therefore the Assessing Officer could not have considered the sa exercise of the j hold the order of th It is further seen that the Assessing Officers passed the orders of assessments in the case of present assesses on 10 and 29-12-2003 respectively. The decision of the Hon'ble Supreme Court in the case of IPCA Laboratory case (supra) was rendered much later in point of time. Prior to the said decision there was a considerable debate, on this issue. As already stated, the subsequent statutory amendment with retrospective effect also supports th claim of the assessee. Exercise of jurisdiction under section 263 on this ground cannot be sustained. 10.4 Respectfully following the above decision of the Tribunal, we hold that in the instant case the Assessing Officer was not authorized to carry out enquiry beyond the scope of the reasons for Shree Aniruddha Upasana Foundation the Tribunal in the case of Gift and Handicrafts (supra) 17. With regard to allowing deduction under section 80HHC in spite of there being a loss as defined under clause (baa) of Explanation to section 80HHC, it is seen that provisions of section 80HHC(3) have been amended retrospectively with effect from 1 1992 and in the light of the a foresaid amendment the claim of the assessee is in accordance with law. Even otherwise as already held by us, the claim for deduction under section 80HHC was never the matter of the limited scrutiny assessment and therefore the Assessing Officer could not have considered the same. The CIT in exercise of the jurisdiction under section 263 could not, therefore, hold the order of the Assessing Officer as erroneous on this ground. It is further seen that the Assessing Officers passed the orders of assessments in the case of present assesses on 10-4-2003, 8 2003 respectively. The decision of the Hon'ble Supreme n the case of IPCA Laboratory case (supra) was rendered much later in point of time. Prior to the said decision there was a considerable debate, on this issue. As already stated, the subsequent statutory amendment with retrospective effect also supports th claim of the assessee. Exercise of jurisdiction under section 263 on this ground cannot be sustained.” Respectfully following the above decision of the Tribunal, we hold that in the instant case the Assessing Officer was not authorized to carry out enquiry beyond the scope of the reasons for Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 28 the Tribunal in the case of Gift and Handicrafts (supra) 17. With regard to allowing deduction under section 80HHC in spite of there being a loss as defined under clause (baa) of that provisions of section ct from 1-4- 1992 and in the light of the a foresaid amendment the claim of the assessee is in accordance with law. Even otherwise as already held under section 80HHC was never the matter of the limited scrutiny assessment and therefore the me. The CIT in urisdiction under section 263 could not, therefore, ous on this ground. It is further seen that the Assessing Officers passed the orders of 2003, 8-9-2003 2003 respectively. The decision of the Hon'ble Supreme n the case of IPCA Laboratory case (supra) was rendered much later in point of time. Prior to the said decision there was a considerable debate, on this issue. As already stated, the subsequent statutory amendment with retrospective effect also supports the claim of the assessee. Exercise of jurisdiction under section 263 on Respectfully following the above decision of the Tribunal, we hold that in the instant case the Assessing Officer was not authorized to carry out enquiry beyond the scope of the reasons for which the case was selected under limited scrutiny and therefore the Ld. CIT is not justified in directing the Assessing Officer to carry out the enquiry on the issues other than the issues for which case was selected for limited scrutiny and holding the order as erroneous insofar prejudicial to the interest of the reve ground No. 3 of the appeal is accordingly allowed. 11. In the result, the appeal filed by the assessee is Order pronounced in the open Court in Sd/- (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 19/09/2022 Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// Shree Aniruddha Upasana Foundation which the case was selected under limited scrutiny and therefore CIT is not justified in directing the Assessing Officer to carry out the enquiry on the issues other than the issues for which case was selected for limited scrutiny and holding the order as erroneous insofar prejudicial to the interest of the revenue. The additional of the appeal is accordingly allowed. In the result, the appeal filed by the assessee is allowed. unced in the open Court in 19/09 Sd/ KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Shree Aniruddha Upasana Foundation ITA No. 706/M/2022 29 which the case was selected under limited scrutiny and therefore CIT is not justified in directing the Assessing Officer to carry out the enquiry on the issues other than the issues for which case was selected for limited scrutiny and holding the order as erroneous nue. The additional allowed. /09/2022. Sd/- OM PRAKASH KANT) MEMBER (Sr. Private Secretary) ITAT, Mumbai
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