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2022 (9) TMI 973 - ITAT MUMBAIRevision u/s 263 by CIT - revisionary order in the case of limited scrutiny - As per CIT, order of AO is erroneous on non-verification of utilization of the accumulated fund and non-verification of reduction in tangible assets and capital work-in-progress - return of income filed by the assessee for year under consideration was selected for limited scrutiny for verification of payment made to the specified persons - HELD THAT:- Assessing Officer has carried out the enquiry on the issue of verification of limited scrutiny reason. On perusal of the impugned order of the CIT, we find that he has nowhere stated that no verification or any further verification has not been done by the AO on the issue of scrutiny for which the case was selected as limited scrutiny case - CIT has held the order of the AO as erroneous on the ground of no enquiry on other issues i.e. the issue of non-verification of utilization of the accumulated fund and non-verification of reduction in tangible assets and capital work-in-progress. As far as scope of verification in limited scrutiny cases is concerned the CBDT in instruction No. 7/2014 vide letter dated 26/09/2014 has specified that scope of enquiry in limited scrutiny cases should be limited to verification of those particular aspects only and therefore the AO shall confine the questionnaire and subsequent enquiry or verification only on the specific points on the basis of which the particular return has been selected for scrutiny. It is further provided that if there’s a potential escapement of the income then Assessing Officer may convert the case into detail scrutiny after prior approval of the higher authorities. For cases selected through CASS cycle 2015 and 2016 the CBDT has further emphasized that scrutiny proceeding in limited scrutiny should be restricted to the relevant parameters which formed the basis for selecting the case for the scrutiny and the Assessing Officer shall not proceed to make other inquiries except with the prior approval of the higher authorities Assessing Officer was not authorized to travel beyond the enquiry on the issue for which case was selected for scrutiny and enquiry on the issues as observed by the Ld. CIT in order under section 263 of the Act on the issue of non-verification of utilization of the accumulated fund and reduction in sale of asset and capital work in progress, were beyond the scope of the limited scrutiny. The Ld. DR has not brought before us whether any permission was sought by the Assessing Officer for converting the limited scrutiny case into a completely scrutiny case. Tribunal in the case of Balvinder Kumar [2021 (3) TMI 649 - ITAT DELHI] after analyzing CBDT instructions on the issue of the scope of limited scrutiny held that it would not be open for the PCIT to pass revisionary order under section 263 in the case of limited scrutiny, where the Assessing Officer could not go beyond reason for which matter was selected for limited scrutiny. We hold that in the instant case the Assessing Officer was not authorized to carry out enquiry beyond the scope of the reasons for which the case was selected under limited scrutiny and therefore the Ld. CIT is not justified in directing the Assessing Officer to carry out the enquiry on the issues other than the issues for which case was selected for limited scrutiny and holding the order as erroneous insofar prejudicial to the interest of the revenue. Decided in favour of assessee.
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