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TMI Blog2019 (4) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... 9405/-. The A.O. has adopted 8% profit on the gross receipt in spite the assessee maintained regular books of account which are duly audited. The book profit may kindly be accepted and the addition made by the A.O. may kindly be deleted. 2. On the facts and circumstances of the case and in law, the CIT Appeal-1, Aurangabad has erred in confirming the order of the A.O. in rejecting the deduction U/S.80P (ii) (a) (vi) of the I.T. Act the same may kindly be allowed. 3. On the facts and circumstances of the case and in law the A.O. has erred in not following the instruction of CBDT and has scrutinized and made addition on the issues which was not covered under the CASS while selecting the case under scrutiny. Therefore, the deduction U/S.80P (ii) (a) (vi) may kindly be allowed as the same is not disallowed as per law / instruction framed by the board. 4. The learned Authorized Representative for the assessee at the outset pointed out that the ground of appeal No.3 raised by assessee is the jurisdiction issue and needs to be adjudicated first. 5. Briefly, in the facts of the case, the assessee was Labour Co-operative Society and for the year under consideration had filed return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es picked up for limited scrutiny, can any other issue be decided without taking necessary permission from the concerned Commissioner? In this regard, first we will make reference to CBDT, which vide Instruction No.5/2016, dated 14.07.2016 had clearly pointed out that in the cases falling under limited scrutiny or complete scrutiny, it is clarified that in cases under limited scrutiny, the scrutiny assessment proceedings would initially be confined only to the issue under limited scrutiny and only upon conversion of case to complete scrutiny after following the procedure i.e. after taking approval from the Pr.CIT / CIT, the Assessing Officer may examine additional issues beside the issue involved in limited scrutiny. 10. The Tribunal in the case of Nazare Vikas Karyakari Seva Sahakari Society Ltd. Vs. ITO (supra) on similar circumstances of extension of scope of scrutiny to other issues and making addition on such issues, where the case of assessee was picked up for scrutiny under CASS have held as under:- "3. On hearing the parties and the precedent, we find the similar issue was the subject-matter of adjudication before Pune Bench of the Tribunal in the case of Suresh Jugraj M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e monitored by the Jt. CIT/Addl.CIT concerned." 10. We also perused the CBDT letter dated 08-09-2010 which deals with selection of cases for scrutiny on the basis of data in AIR returns and subsequent assessment proceedings. The instructions given in the said letter reads as under : "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 aspects of information received through AIR. However, a case may be taken up for wider scrutiny with the approval of the administrative Commissioner, where it is felt that apart from the AIR information there is a potential escapement of income more than Rs. 10 Lacs. 3. It has also been decided that in all the cases which are picked for scrutiny only on the basis of AIR information, the notice u/s.143(2) of Income Tax Act, 1961 should clearly be stamped with "AIR" case. 11. Further, on perusing the orders of the Revenue, we find the facts are similar to the ones already decided by the Pune Bench of the Tribunal in the case of M/s. S.F. Chougule Vs. JCIT (supra) is relevant to the facts present case of the assessee. We therefore proceed to ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y made, then the previous approval of the CCIT was compulsory. Referring to the order of CIT(A), the assessee pointed out that the CIT(A) states that the case of assessee was selected through CASS and also mentions that the contention of assessee would have been acceptable had the case been manually selected for scrutiny. The learned Authorized Representative for the assessee further placed reliance on the ratio laid down by the Hyderabad Bench of Tribunal in Smt. Nayana P. Dedhia Vs. ACIT (2003) 86 ITD 398 (Hyd) for the proposition of binding nature of CBDT circulars upon the IT authorities. He further pointed out that the said decision has been approved by the Hon‟ble High Court of Andhra Pradesh in CIT Vs. Smt. Nayana P. Dedhia (2004) 270 ITR 572 (AP). Further, he referred to the ratio laid down by the Hon‟ble High Court of Delhi in CIT Vs. Best Plastics (P) Ltd. (2007) 295 ITR 256 (Del) for the proposition that where the guidelines are laid down for selection of cases for scrutiny and if the case of the assessee was taken up for scrutiny in violation of CBDT Instructions, then the assessment order has to be set aside. He further referred to the decision of Hon‟ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Survey under section 133A of the Act was carried out at the premises of assessee on 30.01.2008. During the course of Survey, the assessee made declaration of additional income of Rs. 45,93,467/- which was offered as additional income over and above the income to be returned for the year under consideration. The assessee claims that it had disclosed the said additional income in its return of income wherein the return was filed declaring income of Rs. 81,64,598/-. However, the perusal of computation of income reflected that net profit shown in Profit & Loss Account was Rs. 11,62,084/- and certain disallowances were made on account of personal expenses, capital expenses and disallowances under section 40(a)(ia) of the Act at Rs. 68,31,574/- and other disallowances and the income was aggregately shown at Rs. 85,69,672/- The Assessing Officer and CIT(A) thus, were of the view that the assessee had not included the additional income of Rs. 45,93,467/-, where it had declared the business income at only Rs. 11,62,084/-, though it had filed the return of income declaring income of Rs. 81,64,590/-. The case of authorities below is that the assessee had not fulfilled the conditions laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer may select any return for scrutiny after recording reasons and after obtaining the approval of CCIT / DGIT. The cases under this category should be selected, if there are compelling reasons and cases not selected under CASS. These cases are watched by the CCIT / CIT for the quality of assessment. The said guidelines are as per F.No.225/93/2009/ITA.II. The reply under RTI also refers to the said guidelines and admittedly, these guidelines were used to select the case of assessee for scrutiny. Further, the assessee also filed on record letter dated 13.05.2013 issued by the ACIT, Circle (1), Sangli, wherein in reply to the letter of assessee, it has been informed that there is no record to show that previous approval of CCIT / DGIT was obtained to select the case manually for scrutiny for assessment year 2008-09. So, taking into consideration the said correspondence which has come into existence after the date of passing of assessment order and appellate order, the first thing to be taken note of is that the case of assessee was not selected for scrutiny in CASS which is the reply given in answer to RTI query as per letter dated 12.04.2012. The second aspect is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch an administrative approval before making the said addition. As such, the Pune Bench of the Tribunal has already taken the favourable view in these matters in favour of the assessee. We do not understand why AO failed to take approval for such conversion. Considering the settled nature of the issue, we allow the legal ground raised by the assessee vide Ground No.1 and hold that the assessment order passed by the AO is bad in law and void-ab initio. Consequently, we find adjudication of other grounds by the assessee on merits becomes academic. Therefore, the said grounds are dismissed are academic." 4. From the above, it is settled legal issue at the level of the Tribunal, Pune Bench, in the cases, selected under CASS, the additions on the nonCASS issues can only be made after obtaining due permission from the superior authorities and the said approval of the superior authorities in writing should be available on records. In all these ten appeals under consideration, we find there is no whisper about the obtaining of such approval from the superior authorities before the scrutiny scope is extended to non-CASS issues. In any case, the Assessing Officer did not make any addition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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