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2023 (4) TMI 1157 - AT - Income TaxConversion of limited scrutiny into complete scrutiny - whether AO has exceeded the jurisdiction in enquiring into the issues relating to unsecured loans even before prior to 14.12.2017 when the case was converted into complete scrutiny which is against the provisions of Act? - HELD THAT:- CBDT Instruction No. 5/2016, we are of the considered view that the AO has exceeded his jurisdiction in enquiring into those issues beyond the scope of limited scrutiny even prior to the date of conversion which is in clear violation of mandate given by CBDT in the said Circular and has been held by the Co-ordinate Bench of Delhi in the case of Dev Milk Foods Pvt. Ltd. [2020 (6) TMI 317 - ITAT DELHI] to be bad in law. CBDT has clarified that in a limited scrutiny, the scrutiny assessment proceedings would initially be confined only to issues and questionnaire, enquiry, investigation etc. would be restricted to such issues in the limited scrutiny. Only upon conversion of such case to complete scrutiny after following the procedure laid down as stated , the AO may examine the issues other than the issues involved in the limited scrutiny but in the present case the procedures were not followed and assessment was conducted in violation of this Instruction. In our opinion, the order passed by the AO is bad in law and cannot be sustained - Decided in favour of assessee.
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