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2021 (10) TMI 873 - AT - Income TaxRevision u/s 263 by CIT - scope of enquiry as assigned under 'limited scrutiny' - assessment so framed under section 143(3) should be modified/set aside on the ground that such order is erroneous in so far as prejudicial to the interest of the revenue - Discrepancy in turnover shown,Some of the expenses have considerably increased as compared to last year and unexplained unsecured loan - HELD THAT:- It is the PCIT who has acted in haste and without due application of mind to such glaring facts. Significantly, the assessment was made under 'limited scrutiny' on specific points. The issue aforesaid raised by the PCIT does not form part of the issues raised in the notice under section 142(1) dated 24.07.2017. A.O. was having no mandate to expand the scope of enquiry beyond the points for which case was put under limited scrutiny. The action of the A.O. for not making alleged enquiry on increase in the expenses thus cannot be levelled as erroneous. Thus, looking from any perspective, the action of the PCIT cannot be countenanced on this score. Allegation towards non-verification of nature and source of loan from Goldfeather Ventures PCIT issued show cause notice for verification merely because the Company is a Kolkata based Co. This approach, in our view, is highly untenable. Consequent directions of the PCIT is clearly in the realm of suspicion and surmises entertained by him for the reason that the loan has been availed from a Kolkata based Company. Such action, if endorsed, may tantamount to saying that all loans given by a Company addressed at Kolkata carries lesser bona fides in financial transactions. We cannot reckon such approach on judicial parameters. Secondly and importantly, the aforesaid issue also did not form part of the subject matter of limited scrutiny. Thus, the A.O. was actually prevented from carrying out enquiries on the point beyond the scope of limited scrutiny having regard to the guidelines issued by CBDT vide Instruction No. 5 dated 14.07.2016 in this regard. PCIT cannot ask the A.O. to travel beyond the scope of enquiry assigned by him under 'limited scrutiny'. We thus have no hesitation to hold that the action of the A.O. cannot be branded as erroneous. The exercise of jurisdiction under section 263 of the Act is thus without authorities of law and hence fails. Objections raised on behalf of the assessee towards serious lack of opportunity to the assessee while remanding the matter back to the A.O. for fresh assessment. PCIT, in the instant case, apparently has not given any effective opportunity to the assessee to counter the allegations raised in the show cause notice. - Decided in favour of assessee.
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