TMI Blog2019 (5) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... rities in writing should be available on records. In this appeal, I 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 on account of the issues of sales of the assessee. Therefore, in my considered view, the said order of the Tribunal covers the common solitary preliminary issue raised before me in this appeal. Accordingly, the preliminary issue raised by the assessee in his appeal is allowed. - ITA No.741/PUN/2018 - - - Dated:- 20-2-2019 - Shri D. Karunakara Rao, AM For the Appellant : Smt. Deepa Khare For the Respondent : Shri M. K. Verma ORDER PER D. KARUNAKARA RAO, AM : This appeal is filed by the assessee against the order of CIT(A)-2, Pune dated 01.08.2017 for the Assessment Year 2014-15. 2. The grounds raised by the assessee are as under :- 1. The learned CIT(A) erred in law and on facts in confirming action of the ld. A.O. in assessing income at ₹ 21,92,520/- by exceeding the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no dispute on the fact that the Assessing Officer took any formal approval from the Superior Authorities for converting limited scrutiny to full scrutiny. Ignoring the above procedural issues, the Assessing Officer proceeded to make additions on various accounts. In the backgrounds of these facts, ld. AR submitted that, this being a case of CASS selected for limited scrutiny purpose, the addition linked to the turnover issue may be confirmed and all other additions required to be deleted. A perusal of the assessment order at para 9, I find the Assessing Officer made four additions and the same are extracted hereunder :- (i) 20% disallowance out of purchase - ₹ 14,76,497/- (ii) 20% disallowance out of labour charges - ₹ 1,69,160/- (iii) Difference in receipts - ₹ 1,842/- (iv) Interest u/s 244A - ₹ 2,23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ones which are authorised the Board in this regard under CASS. It is also a fact that judgment cited by the Ld. DR for the Revenue in the case of Banque Nationale De Paris Vs. CIT 237 ITR 518 (Bom.) was not issued in connection with the jurisdiction of the AO in matters relating to extension of areas of scrutiny to the ones than the authorised ones by the Board. In this connection, we perused the CBDT Instruction No.7/2014, dated 26-09-2014 and find it relevant to extract the relevant lines. The same reads as under : 4. In case, during the course of assessment proceedings, it is found that there is potential escapement of income exceeding ₹ 10 lakhs (for non-metro charges, the monetary limit shall be ₹ 5 lakhs) on any other issue(s) apart from the AIR/CIB/26AS information based on which the case was selected under CASS requiring substantial verification, the case, may be taken up for comprehensive scrutiny with the approval of the Pr.CIT/DIT concerned. However, such an approval shall be accorded by the Pr.CIT/DIT in writing after being satisfied about merits of the issue(s) necessitating wider and detailed scrutiny in the case. Cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny norms. In answer, it was pointed out that the case was selected for scrutiny, in view of guidelines for selection of scrutiny issue during financial year 2010-11; copies of RTI application and the reply are placed at pages 20 to 22 of the Paper Book. The learned Authorized Representative for the assessee further referred to the criteria of guidelines for income-tax scrutiny, copy of which is placed at page 23 and 24 of the Paper Book and reiterated that in the case of assessee, Survey was carried out and criteria was fixed for not picking up the case under scrutiny and the assessee clearly fulfils the same. He further pointed out that in case the criteria is not met with, then as per clause (g), the Assessing Officer can select any return for scrutiny after recording reasons and after obtaining the approval of CCIT/DGIT. In this regard, he pointed out that no such approval was received from the CCIT. Our attention was drawn to the letter dated 13.05.2013 issued from the office of ACIT, Circle (1), Sangli, wherein the Assessing Officer informed the assessee that there was no record to show that previous approval of CCIT was obtained to select the cases manually for scrutiny for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee in rejoinder pointed out that in the case of assessee, he declared additional income during the course of Survey. He further pointed out that the details of expenses were compared by the Assessing Officer. 13. We have heard the rival contentions and perused the record. The preliminary issue raised in the present appeal by way of ground of appeal No.5 is against the validity of assessment made in the hands of assessee. The assessee claims that the case of assessee was not selected for scrutiny under CASS but was selected manually. For selection of any return for scrutiny manually by the Assessing Officer, the requirement of guidelines issued for this purpose for relevant assessment year was that the same should be after obtaining approval of the CCIT / DGIT. Since no such approval was received from the CCIT / DGIT, the Assessing Officer had no jurisdiction to proceed with the scrutiny assessment in the case of assessee. The assessee had raised the issue before the Assessing Officer and CIT(A) but the facet of argument before the authorities below was that the case of assessee could not be selected for scrutiny under CASS since in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and why the same was picked up for scrutiny. The assessee also asked that under which norms the case was selected for scrutiny and whether relaxation in selection of cases in which survey action was carried out on fulfilling the criteria was available in the said norms or not. In reply, it was stated that the guidelines / instructions were followed and since the guidelines were confidential in nature, the copy of same could not be provided. In reply to the next question whether the case was selected under CASS, the categorical answer was No . The said RTI reply further stated that the case was selected for scrutiny in view of the guidelines contained in F.No.225/93/2009/ITA.II. 15. The said guidelines for selection of scrutiny were published and it was pointed out that the said guidelines were only for the use of Officers of Income Tax Department and the same could not be disclosed even under the RTI Act, 2005. The said application under the RTI Act and the order under the RTI Act are placed at pages 20 to 22 of the Paper Book. The assessee has also placed the copy of guidelines issued for scrutiny, copy of which is placed at page 23 of Paper Book. The said guide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer is bad in law. The instructions issued by the CBDT are to be strictly followed by the authorities i.e. Assessing Officer and in the absence of the same, the assessment order passed in the case is annulled. Such is the proposition laid down by the Hon ble High Court of Andhra Pradesh in CIT Vs. Smt. Nayana P. Dedhia (supra) and the Hon ble High Court of Delhi in CIT Vs. Best Plastics (P) Ltd. (supra). In view thereof, we hold that where the Assessing Officer has failed to follow the guidelines issued for selecting the cases for scrutiny and in the facts of the present case, where the case was selected manually for scrutiny, but no previous approval of CCIT was obtained, then the Assessing Officer lacks jurisdiction to carry out the scrutiny assessment in the present case and accordingly, assessment order passed by the Assessing Officer is bad in law. Hence, we hold so. Since the assessment order is held to be bad in law, the issue on merits becomes academic and the grounds of appeal raised by both the assessee and the Revenue in their respective appeals are infructuous. The appeal of assessee is thus, allowed and the appeal of Revenue is dismi ..... 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