TMI Blog2019 (11) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... e additional enquiries would have been to take approval from the administrative Commissioner to widen the scrutiny. This, however, was not done and therefore, the action of the AO is violative of the CBDT Instruction. Thus, the addition so made by the Assessing Officer, in gross violation of the CBDT Instruction, is liable to be deleted. Finding merit in the grievance sought to be raised by the assessee by way of additional Ground No. 7, the same is accepted, resultant to which ground Nos. 1 to 3 originally raised by the assessee become infructuous, requiring no specific adjudication. Deduction under section 54EC - objection of the Assessing Officer that investment in excess of ₹ 50 lakhs is not permitted in a year was introduced in the statute by the Finance (No. 2) Act, 2014 w.e.f. 1/4/2015 i.e. relevant to assessment year 2015-16 - The case under consideration relates to assessment year 2014- 15, hence the same is not applicable to the facts of the present case. Secondly, the objection that the investment in bulk is not required and piecemeal is not permitted also does not hold good, as the assesse purchased Bonds of ₹ 50 lakhs on a particular date and claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, we set aside the orders of the authorities below on the issue relating to allowability of claim under section 54F of the Act and restore the same to the file of the Assessing Officer for final computation of the capital gains. Appeal of the assessee is partly allowed. - ITA No.665/LKW/2017 - - - Dated:- 8-11-2019 - Shri. A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Appellant : Shri Yogesh Agarwal, Advocate For the Respondent : Shri Amit Nigam, D.R. ORDER PER A. D. JAIN, V.P.: This is assessee s appeal against the order of the ld. CIT(A), Bareilly, dated 11/8/2017 for assessment year 2014-15, taking the following grounds: 1) That the lower Courts were not at all justified to adopt the rates of land @ ₹ 45.10 per sq. Yard as against ₹ 75/- per sq. Yard shown by the assessee and thus the addition towards indexed value of land at ₹ 17,59,545/- is uncalled for unjustified. 2) That calculation mistake pointed out before learned CIT (A) towards valuation of land by DVO by ₹ 73,542/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed is beyond the intent purpose and scope of the jurisdiction of the AO as assessment has been made by exceeding his jurisdiction as same was picked up for limited scrutiny case only on the aspect of large deduction u/s 54B, 54C, 54D etc. and large cash deposits in savings account of the assessee and additions have been made on cost of acquisition and cost of improvement which is covered u/s 48 and is outside the scope and purview of reasons of limited scrutiny and thus the additions so made illegally without following the settled norms and laws that too only on the basis of an illegal reference to DVO and thus the order so passed suffers from an inherent illegality which be ordered to be quashed and additions so made be ordered to be deleted. 3. The ld. A.R. of the assessee submitted that the additional grounds taken by the assessee are purely a legal grounds, which do not necessitate any verification of additional facts and all the facts are already on record, therefore, the same may be admitted for hearing. In this regard, the ld. A.R. of the assessee placed reliance on the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2017-18 dated 30/11/2017 and as to whether in the present case, while computing capital gain and denying benefit of section 54EC to the assessee, the AO has contravened the said instructions, thereby rendering the assessment order invalid; and secondly, as to whether the ld. CIT(A) is correct in upholding the assessment order. 8. Section 119(1) of the Act reads as follows: The Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. 9. In Crystal Phosphates Ltd. vs. ACIT , 34 CCH 136 (Del. Trib.), it has been held that once the CBDT had issued instructions, the same have to be followed in letter and spirit by the AO.14. 10. In Amal Kumar Ghosh vs. Addl. CIT , 361 ITR 458 (Cal.), it has been held that when the department has set down a standard for itself, the department is bound by that standard and it cannot act with discrimination. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile making assessments in Limited Scrutiny cases by initiating inquiries on new issues without complying with mandatory requirements of the relevant CBDT Instructions dated 26.09.2014, 29.12.2015 and 14.07.2016. These instances have been viewed very seriously by the CBDT and in one case the Central Inspection Team of the CBDT was tasked with examination of assessment records on receipt of allegations of several irregularities. Amongst other irregularities, it was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was taken from the PCIT for conversion of the limited scrutiny case to a complete scrutiny case and the order sheet was maintained very perfunctorily. This gave rise to a very strong suspicion of mala fide intentions. The Officer concerned has been placed under suspension. 4. In view of discussion in the preceding paragraphs it is once again reiterated that the Assessing Officers should abide by the instructions of CBDT while completing limited scrutiny assessments and should be scrupulous about maintenance of note sheets in assessment folders. (Rakesh Gupta) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted ₹ 50 lakhs in REC bonds on 31/5/2013 (₹ 16.80 lakhs pertaining to assessment year 2013-14 and ₹ 33.20 lakhs pertaining to assessment year 2014-15). The Assessing Officer did not allow the same and the ld. CIT(A) too confirmed the order of the Assessing Officer, on this issue. 20. Before us, the ld. A.R. of the assessee submitted that the AO has disallowed this deduction under section 54EC of the Act on frivolous grounds, i.e., firstly, that deduction cannot be made in excess of ₹ 50 lakhs in one particular year, secondly, the investment in bulk is not required to claim deduction in piecemeal in different years, and thirdly, that most of the plots have been transferred after the investment made in specified assets. 21. We find that firstly, the objection of the Assessing Officer that investment in excess of ₹ 50 lakhs is not permitted in a year was introduced in the statute by the Finance (No. 2) Act, 2014 w.e.f. 1/4/2015 i.e. relevant to assessment year 2015-16. The case under consideration relates to assessment year 2014- 15, hence the same is not applicable to the facts of the present case. Secon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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