TMI Blog2017 (6) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant Member:- This appeal of the assessee is for the assessment year 2011-12. The assessee is directed against the order of Commissioner of Income Tax-15, Kolkata dated 29.02.2016 passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act ). Shri Promod Kumar Himmatsinghka, Ld. Authorized Representative appeared on behalf of assessee and Shr Gouten Hangshing, Ld. Departmental Representative represented on behalf of Revenue. 2. At the outset, we find that there was a delay of 36 days in filing the appeal of assessee and therefore the petition for condonation of delay was filed which is on record. It was explained that the old counsel was not well versed with the tribunal work and therefore the assessee had to find out new counsel, as a result the delay in filing the appeal on time occurred. We have heard Ld. Counsel for the assessee and Ld. DR for the Revenue. We find that there was sufficient cause which prevented the assessee in filing the appeal within the stipulated time therefore we condone the delay and admit the same. We accordingly decided to proceed for hearing the appeal of assessee. 3. The assessee in this appeal has challenged the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the scrutiny in the instant case should have been limited only to the information emanating from AIR. However, the Assessing Officer while passing assessment order u/s. 143(3) of the Act has exceeded his jurisdiction and conducted scrutiny of those items as well which were not emanating from the AIR. Ld. AR also further submitted that CBDT has clarified in its instruction F.No. 225/26/2006-ITA (Pt) vide dated 08.09.2010 that the case selected on the basis of AIR should be subject-matter of scrutiny to the extent of the information of AIR. The relevant instruction of CBDT reads as under:- Subject:-Selection of cases for scrutiny on the basis of data in AIR returns and subsequent assessment proceeding-regarding. **** Reference is invited to Board s letter of even number dated 23rd May, 2007 regarding scope of enquiry in the scrutiny cases selected only on the basis of information received through the AIR returns. 2. The above mentioned guidelines have been reconsidered by the Board and it has been decided that the scrutiny of such cases would be limited only to the aspect of information received through AIR. However, a case may be taken up for wider s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was bad in law. The proceedings under section 143(3) of the Act should have been limited to the extent of the information gathered through AIR. Accordingly the proceedings u/s 263 of the Act cannot be expanded beyond the issue raised in AIR. Thus the order u/s 143(3) of the Act beyond the points of AIR is invalid in law and so the same is with the order passed u/s 263 of the Act. It is the further contention of the assessee that in the items which are not subject matter of AIR cannot subject matter of scrutiny. Such matters include salary of the assessee, loans interest on loans, payment of LIC, Commission brokerage income etc. It is the case of the assessee that in the assessment order passed u/s 143(3) of the Act, the AO has travelled beyond the points of the AIR on the basis of which the case of scrutiny was selected under CASS module. It is the plea of the assessee that when no addition/disallowance can be made beyond the points mentioned in AIR in the assessment proceedings then same is the case with proceedings initiated u/s 263 of the Act. 4.1 The first aspect which needs to be examined is as to whether the assessee is entitled to challenge the validity of initiatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Supreme Court in the case of Kiran Singh Ors. V. Chaman Paswan Ors. [1955] 1 SCR 117(SC) wherein the Hon ble Supreme Court observed as follows :- It is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties. Now coming to the facts of the instant case, we find that the instant case was selected on the basis of AIR Information as evident from the order of AO under section 143(3) of the Act. There is also no whisper in the order of the AO for expanding the scope of limited scrutiny after obtaining the permission from the Administrative CIT. The ld. DR has also failed to bring anything contrary to the argument of the ld. AR. Therefore in our considered view the scrutiny should have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Thus, there was under assessment of income by ₹78,000/-; (iv) The assessee during the year has sold property for ₹36 lakh and exemption of ₹19,74,763/- was claimed by assessee u/s. 10(38) of the Act. This fact was not verified by the AO at the time of assessment proceedings. In view of above, the Ld. CIT found the order of AO is erroneous in so far as prejudicial to the interest of Revenue and therefore show-cause notice was issued u/s. 263 of the Act vide dated 13.10.2015 for the clarification of the above transactions. In compliance thereto, the assessee submitted as under : i) The deposit in HDFC bank account No. 03151930000609 was duly reflected in his IT return. Therefore, no cause has happened to the Revenue which is prejudicial to the interest of Revenue. ii) The deposit of ₹19,73,750/- was duly reflected in the IT return and therefore there was no error which is prejudicial to the interest of Revenue. iii) Regarding the credit card payment, the addition on account of undisclosed cash deposit has already been added by the AO and therefore there is no error causing prejudice to the interest of Revenue. iv) There was no sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences and documents in respect of the above issues raised after giving opportunity to the assessee and in accordance with law. Being aggrieved by this order of Ld. CIT assessee is in appeal before us on the following grounds:- ( 1) For that the L d Pr. Commissioner of Income Tax erred in exercising the power of revision for the purpose of directing the AO to hold another investigation when the order passed by the AO was neither erroneous nor prejudicial to the interest of revenue. ( 2) For that the L d Pr.CIT erred and exceeded jurisdiction by giving direction in respect of the matters which are subject matters of appeal before the CIT(A), therefore order passed by Pr. CIT-15 is unlawful, beyond provision of law and therefore liable to be quashed. ( 3) For that the L d Pr. CIT had alleged arbitrarily irrelevant matters, factual and untrue position in the show cause notice u/s. 263 and therefore order passed by Pr. CIT-15 Kolkata u/s. 263 is nullity and liable to be quashed. ( 4) For that L d Pr. CIT has wrongly assumed the jurisdiction u/s. 263 by wrongly mentioning that deposits in HDFC Goa A/c HDFC Porvorim Goa A/c were under-assessed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- out of total credit card payment of ₹3,76,225/-. Therefore, it is clear that AO has applied his mind while framing the assessment proceedings u/s. 143(3) of the Act. Thus, the allegation of the AO in the impugned order or Ld. CIT u/s. 263 of the Act that there was no proper enquiry conducted by AO at the time of assessment proceedings is not true. d) Sale of property for consideration of ₹ 36 lakh. On perusal of AIR information which is placed on page 1 of the paper book, we find that no immovable property has been sold by assessee in the year under consideration. Besides the above, there is also no whisper in the assessment order for any addition on account of capital gains. Therefore, we find that the allegation of Ld. CIT that AO has not conducted sufficient enquiry in relation to sale of immovable property is not true. 5.1 In view of the above we find that Ld. CIT has passed impugned order u/s. 263 of the Act by holding the order of AO as erroneous in so far as prejudicial to the interest of revenue on account of inadequate enquiry made by AO while passing order u/s. 143(3) of the Act. However, we find that proper and sufficient enquiries were conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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