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2023 (10) TMI 774 - AT - Income TaxScope of limited scrutiny - jurisdiction of AO to add delayed payment of provident fund - as argued case was selected for limited scrutiny and the provident fund was not the subject matter of the limited scrutiny - HELD THAT:- As in a limited scrutiny the jurisdiction of the AO is confined to those items which were the subject matter of the limited scrutiny and in case the AO has come across any item of disallowances or escaped income then the AO has first to form a reasonable opinion on the same and obtain a prior approval of the competent authority to convert the limited scrutiny into a complete scrutiny and only then the said addition can be made and not otherwise. In the present case the AO has not converted the limited scrutiny into complete scrutiny and therefore, the addition made is without jurisdiction. As relying on Sukhdham Infrastructures LLP [2023 (4) TMI 1157 - ITAT KOLKATA] we hold that the addition made by the AO is without jurisdiction and is accordingly directed to be deleted. Addition u/s 14A r.w. Rule 8D - Mandation to record satisfaction - HELD THAT:- AO has simply invoked the provisions of Rule 8D of the Rules without recording any satisfaction as is mandatory by Section 14 before resorting to the provisions of Section 14A - recording of satisfaction is prerequisite for invoking Section 14A of the Act r.w. Rule 8D of the Rules failing which the addition made by the AO cannot be sustained. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Appeal filed by the assessee is allowed.
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