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2021 (6) TMI 887 - AT - Income TaxRevision u/s 263 - limited scrutiny assessment -Scope of Limited scrutiny - unexplained of sundry creditors and unexplained investment - HELD THAT:- The perusal of the order shows that the assessing officer has not only the posed questions with respect to share application as well as sundry creditors by the detailed questionnaire to the assessee but had also made additions on of sundry creditors. The assessing officer had mentioned that the shares were allotted in the financial year 2014 - 2015 on the basis of the share money received by the assessee. No discrepancy was found no additions were made on this head. However in respect of sundry creditor, the assessing officer had made the additions. In our considered opinion once the assessing officer has examined both the issues as referred to him under the limited scrutiny, then it is not incumbent upon him to expand the scope of the assessment without seeking the approval from the principal Commissioner of income tax in accordance with the board instruction 19 and 20/2015 2015 dated 29th December 2015 and Instruction number 5/2016 dated 14/07/2016. Assessing officer, can only deviate from the limited scrutiny and converted into the only after following the procedure provided under the circular (5/16 supra). In the present case it is not the case of the principal Commissioner that case was required to be converted into the complete scrutiny and the proposal should have been made by the assessing officer. In our view the assessing officer had acted within the limits circumscribed by the limited scrutiny in accordance with the material available in is file after the last date of deciding the assessment. If the assessing officer during the course of assessment comes to the conclusion that some investment were made in the books of account, then the addition can be made under section 69 of the act but for that procedure as provided by the circulars, were required to be followed by the assessing officer. In our considered opinion once the order was passed based on the material available on record and investment in shares and subsequent allotment have been accepted by the assessing officer and additions were made on account of sundry creditors, then no fault can be found in the order passed by the assessing officer. The sole basis for initiating the proceedings under section 263 was the enquiry report by the ITO whereby he had estimated the investment to the tune of ₹ 2,85,60,000/- and subsequent reference by the assessing officer to the valuation cell under section 142A of the income tax act. The revisional Commissioner in his order though has mentioned that the valuation was referred to the valuation cell under section 142(2A) of the Income Tax Act. In our considered opinion the wrong provisions has been mentioned by the revisional Commissioner as the valuation of the assets by the valuation officer is mention under section 142A and not under section 142(2A) Once the valuation report has not been sent by the valuation officer to the assessing officer/assessee, within the period stipulated by the act that alleged report cannot found basis of "RECORD" to invoke the judicial under section 263 by the revisional Commissioner. The twin requirement of the order being erroneous and prejudicial to the interests of revenue should be satisfied and that the CIT should invoke the powers u/s. 263 only after an enquiry by him to establish the twin conditions. Merely the assessing officer has formed an opinion which is not in line of thinking of the revisional Commissioner and there are two possible views, then also the revisional Commissioner cannot exercise the power for provision under section 263 - we found that the order passed by PCIT, was not in accordance with law and therefore we quash the same. - Decided in favour of assessee.
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