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2023 (9) TMI 778 - ITAT AHMEDABADRevision u/s 263 - assessment is taken up for limited scrutiny - payment to contractors and tax deducted thereon - HELD THAT:- From the assessment order we note that the case was selected under “Limited Scrutiny” to examine the “expenses earned by the assessee for earning exempt income”. In the assessment order, AO observed that the assessee has submitted its reply on the above issue for which assessment was opened and no addition was made on this issue. Accordingly, the AO being satisfied with the reply/clarification filed by the assessee, accepted the returned income of the assessee and no additions were made in the assessment order. In the recent case of Sahita Construction Company [2022 (2) TMI 1298 - ITAT INDORE] the Tribunal held that when the assessment is taken up for limited scrutiny, Ld. Pr. CIT cannot hold the assessment order as erroneous and prejudicial to the interest of revenue in respect of issue which was not a reason for selection of the case for limited scrutiny. Since the assessee’s case was selected for limited scrutiny on certain issues and Ld. AO has examined these issues and framed the assessments and the issue of examination of payment to contractors was not a part of the limited scrutiny reasons, in our considered view, Ld. Pr. CIT erred in assuming jurisdiction under Section 263 of the Act and also erred in holding that assessment order is erroneous and prejudicial to the interest of revenue CIT has erred in assuming revisionary powers u/s 263 of the Act in the instant facts. The impugned order of Ld. Pr. CIT is accordingly quashed. Appeal of assessee allowed.
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