TaxTMI 
TaxTMI 
2019 (12) TMI 822
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.... appeal. 3.1 The learned AO has erred in holding that agreement for sale dated 1/4/2013 filed before him was a sham transaction and after thought of the assessee. 3.2. The learned AO has erred in making addition in the name of 'Share application money as discussed above' Rs. 65,44,426/- whereas there was no such case. 4. The learned AO has erred in not following the binding decisions of Supreme Court and other High Courts holding that provisions giving incentive for growth and development should be interpreted liberally. The learned CIT(A) has erred in not allowing this ground of appeal. 5. The learned AO has erred in not accepting the claim of the assessee that agriculture land sold was out of the purview of definition of capital assets as given in section 2(14) of Income Tax Act. Therefore no Capital Gain tax was chargeable in this case. The learned CIT(A) has erred in not allowing this ground of appeal.'' The assessee has subsequently modified the Ground No. 2 which reads as under:- ''In the facts and circumstances of the case, and in law, the learned AO has erred in converting the case from limited scrutiny to complete scrutiny. The action of learned AO....
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....he Act and even after the limitation period for issue of notice u/s 143(2) is invalid and liable to be quashed. He has referred to CBDT Instruction No. 5/2016 dated 14-07-2016 and submitted that CBDT has issued specific instruction that the case selected for limited scrutiny cannot be taken up for full scrutiny without prior approval of the competent authority. These instructions have been repeated by the CBDT time and again vide Instruction Nos. 7/2014 dated 26-09-2014, 20/2015 dated 29-12-2015 and 5/2016 dated 14-07-2016 that the AO shall expeditiously intimate the tax payers concerned regarding conducting complete scrutiny in the cases where the AO proposed to convert the limited scrutiny to complete scrutiny . He has further contended that the assessee came to know about this fact only through the assessment order that the AO converted her case from limited scrutiny to complete scrutiny. Therefore, there is a gross violation of instructions CBDT which renders the assessment order null and void. The ld.AR of the assessee has relied on various decisions of this Tribunal on this point. 3.3 On the other hand, the ld. DR has submitted that the AO has converted the limited scrutiny....
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.... for which case was selected for scrutiny under CASS. CBDT has issued instructions from time to time in this respect and has specifically instructed the taxing authorities that scope of enquiry should be limited to verification of all the particulars for which limited scrutiny was taken up under CASS. However, in case during the assessment proceeding if the AO is of the view that substantial verification of other issue is also required then the case may be taken up for comprehensive scrutiny with the approval of the Pr.CIT/DIT concerned. It is also instructed that such an approval shall be accorded by the Pr.CIT/DIT in writing after being satisfied about the merits of the issue (s) necessitating wider and detailed scrutiny in the case. In the latest Instruction No. 5/ 2016 dated 14-07-2016, CBDT has again instructed the taxing authorities in para 2 to 4 as under:- ''2. In order to ensure that maximum objectivity is maintained in converting a case falling under 'Limited Scrutiny' into a 'Complete Scrutiny' case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while pro....
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....ssue and held in para 13 to 16 as under:- "13. CBDT Instruction No. 20/2015 is as under: "Scrutiny Assessments-some important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection ('CASS')-reg. The Central Board of Direct Taxes ('CBDT'), vide Instruction No.7/2014 dated 26.09.2014 had clarified the extent of enquiry in certain category of cases specified therein, which are selected for scrutiny through CASS. Further clarifications have been sought regarding the scope and applicability of the aforesaid Instruction to cases being scrutinized. 2. In order to facilitate the conduct of scrutiny assessments and to bring further clarity on some of the issues emerging from the aforesaid Instruction, following clarifications are being made: i. Year of applicability: As stated in the Instruction No.7/2014, the said Instruction is applicable only in respect of the cases selected for scrutiny through CASS-2014. ii. Whether the said Instruction is applicable to all cases selected under CASS: The said Instruction is applicable where the case is selected for scrutiny under CASS only on the parameter(s) of AIR/CIB/26AS data. If a case has been s....
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.... concerned. The procedure indicated at points (a), (b) and (c) above shall no longer remain binding in such cases. (For the present purpose, 'Metro charges' would mean Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Ahmedabad). 4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the Assessing Officer shall issue an appropriate show-cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances, due consideration shall be given to the submissions made by the assessee in response to the show-cause notice. 5. The contents of this Instruction should be immediately brought to the notice of all concerned for strict compliance. 6. Hindi version to follow. Sd/- (Ankita Pandey) Under Secretary to Government of India" 14. With Instruction 7 of....
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..... 3. The reason(s) for selection of cases under CASS are displayed to the Assessing Officer in AST application and notice u/s 143(2), after genera ion from AST, is issued to the taxpayer with the remark 'Selected under Computer Aided Scrutiny Selection (CASS)". The functionality in AST is being modified suitably to flag the reasons for scrutiny selection in AIR/CIB/26AS cases. This functionality is expected to be operationalised by 15th October, 2014. Further, the Assessing Officer while issuing notice under section 142(1) of the Act which is enclosed with the first questionnaire would proceed to verify only the specific aspects requiring examination/verification. In such cases, all efforts would be mad to ensure that assessment proceedings are completed expeditiously in minimum possible number of hearings without unnecessarily dragging the case till the time-baring date. 4. In case, during the course of assessment proceedings it is found that there is potential escapement of income exceeding Rs. 10 lakhs (f non -metro charges, the monetary limit shall be Rs. 5 lakhs) on any other issue(s) apart from the AIR/CIB/26AS information based on 14 which the case was elected unde....