TMI Blog2019 (12) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... directly. A.O had aptly confined himself to the issues for which the case of the assessee was selected for limited scrutiny, therefore, no infirmity can be attributed to his order, for the reason, that he had failed to dwell upon certain other issues which did not form part of the reasons for which the case was selected for limited scrutiny under CASS. We thus not being able to concur with the view taken by the Pr. CIT that the order passed by the A.O under Sec. 143(3), dated 08.12.2016 is erroneous, therefore, set aside his order and restore the order passed by the A.O. As we have quashed the order passed by the Pr. CIT u/s 263 on the ground of invalid assumption of jurisdiction by him, therefore, we refrain from adverting to and therein adjudicating the contentions advanced by the ld. A.R on the merits of the case, which thus are left open. - ITA No. 3098/Mum/2019 - - - Dated:- 27-11-2019 - Shri S. Rifaur Rahman, Accountant Member And Shri Ravish Sood, Judicial Member For the Appellant : Shri Raj esh Shah Ms. Ruchita Jain, A.R s. For the Respondent : Shri T-Kipgen, CIT D.R ORDER PER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequently, the case of the assessee was selected for Limited scrutiny through CASS and notice under Sec. 143(2) was served upon the assessee. As is discernible from the order of the Pr. CIT, the case of the assessee was selected for Limited scrutiny under CASS for two reasons viz. (i). Large other expenses claimed in the P L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares. On the basis of the order passed under Sec. 143(3), dated 08.12.2016 the income of the assessee was assessed by the A.O under the normal provisions at a loss of (-) ₹ 6,31,90,753/-, while for the book profit under Sec. 115JB was worked out at a loss of (-) ₹ 6,65,17,726/-. 3. In exercise of the powers vested with him under Sec. 263 of the Act, the Pr. CIT called for the records of the assessee. After perusing the financial statements of the assesssee company, it was observed by him that the assessee during the year under consideration had out of its manufactured goods of ₹ 14,78,69,007/- sold goods worth ₹ 6,86,49,334. Observing, that the closing stock of the finished goods with the assessee company should have been reflecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also assailed the validity of the order passed by the Pr. CIT under Sec. 263 of the Act. It was submitted by the ld. A.R, that as the case of the assessee was selected for limited scrutiny under CASS for two reasons viz. (i). Large other expenses claimed in the P L A/c.; and (ii). Low income in comparison to High Loans/advance/Investment in shares, therefore, the A.O was divested of his jurisdiction to advert to the other aspects except for those on the basis of which the case was taken up for scrutiny assessment. It was submitted by the ld. A.R, that the fact that the case of the assessee was selected for limited scrutiny under CASS for the aforesaid reasons viz. (i). Large other expenses claimed in the P L A/c; and (ii). Low income in comparison to High Loans/advance /Investment in shares, was an admitted fact and was categorically admitted by the Pr. CIT in his order passed under Sec. 263 of the Act. In order to drive home his aforesaid contention, the ld. A.R had drawn our attention to the order passed by the Pr. CIT under Sec. 263, wherein the aforesaid factual position was clearly discernible. In the backdrop of the aforesaid facts, it was submitted by the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Admittedly, the case of the assessee was selected for limited scrutiny through CASS for two reasons viz. (i). Large other expenses claimed in the P L A/c.; and (ii). Low income in comparison to High Loans/advance /Investment in shares. Insofar the fact that the case of the assessee was selected for limited scrutiny for the aforesaid reasons is concerned, the same as observed by us hereinabove is not disputed and is clearly discernible from the order passed by the Pr. CIT under Sec. 263 of the Act. In fact, we find, that the Pr. CIT in his order had categorically observed that the case of the assessee was not selected for examination on the issue relating to closing stock , but was selected for limited scrutiny for the aforesaid two reasons viz. (i). Large other expenses claimed in the P L A/c.;and (ii). Low income in comparison to High Loans/advance /Investment in shares. We find that as per the CBDT Instruction No. 20/2015, dated 29.12.2015 , scrutiny in cases selected through Computer Aided Scrutiny Selection (CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year-- one is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The assessees concerned have duly been intimated about their cases falling either in Limited Scrutiny' or 'Complete Scrutiny' through notices issued under section 143(2) of the Income-tax Act, 1961 ('Act'). The procedure for handling 'Limited Scrutiny' cases shall be as under: a. In 'Limited Scrutiny' cases, the reasons/issues shall be forthwith communicated to the assessee concerned. b. The Questionnaire under section 142(1) of the Act in 'Limited Scrutiny' cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny Further, the scope of enquiry shall be restricted to the Limited Scrutiny' issues. c. These cases shall be completed expeditiously in a limited number of hearings. d. During the course of assessment proceedings in 'Limited Scrutiny' cases, if it comes to the notice of the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parison to High Loans/advance /Investment in shares. 7. As observed by us hereinabove, as per the CBDT instruction No. 20/2015, dated 29.12.2015, in a case which had been selected for scrutiny assessment on the basis of Computer Aided Scrutiny Selection ('CASS'), the scrutinising of such case would be confined only to the specific reasons/issues for which the case has been picked up for scrutiny. However, the case may thereafter be taken up for complete scrutiny with the approval of the administrative Principal commissioner of income-tax/Commissioner of income-tax, where it is felt that apart from the CASS information there is potential escapement of income of more than ₹ 10,00,000/-. Accordingly, the CBDT had in clear and unequivocal terms clarified that for broadening the scope of a case selected for limited scrutiny as per CASS information the approval of the administrative Principal commissioner of income-tax/Commissioner of income-tax would be required. In the case before us, it is an admitted fact that the case of the assessee was selected for limited scrutiny under CASS ,for the reasons, viz. (i). Large other expenses claimed in the P L A/c.; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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