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TMI Blog2023 (1) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... usari submits that the case of the assessee was selected for limited scrutiny for the reason of "substantial increase in capital in a year" and drew my attention to para 2 of the assessment order. He submits that the AO passed order making addition u/s. 56(2)(vii)(b) of the Act for the issue which was not the reason for selecting the case under limited scrutiny through CASS. He vehemently argued that the AO without obtaining prior approval of the competent authority converted into complete scrutiny which is not permissible under law. The ld. AR drew my attention to the Instruction No. 20/2015 dated 29-12-2015 issued by the CBDT and argued that the said Instruction is binding on the AO, of any violation of the said Instruction therein, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case. He placed reliance of the decision of Co-ordinate Bench of this Tribunal in the case of Suresh Jugraj Mutha in ITA No. 05/PUN/2016 for A.Y. 2011-12 vide order dated 04-05-2018 and argued that this Tribunal held the assessment order passed by the AO is bad under law on account of converting the limited scrutiny into complete scrutiny. 4. On the other hand ld. DR, Shri G.J. Ninawe vehemently opposed the arguments of the ld. AR and submits that the AO correctly completed the assessment by making addition u/s. 56(2)(vii)(b) of the Act and he is within his jurisdiction. He submits that no prior approval is necessary in the facts and circumstances involved in the present case. The ld. DR heavily relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction which discloses that if during the course of assessment proceedings in limited scrutiny cases, if it is comes to the knowledge of AO that there is potential escapement of income exceeding Rs.5 lakhs (for metro charges, the monetary limit shall be Rs.10 lakhs) requiring substantial verification on any other issues, then, the case may be taken up for complete scrutiny with the approval of the PCIT/CIT concerned in writing after being satisfied about merits of the issues necessitating complete scrutiny. Therefore, it is clear when there is a potential escapement of income exceeding Rs.5 lakhs a limited scrutiny cases that the AO required to take prior approval of PCIT/CIT concerned. I find no such approval brought on record by the ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 21-12-2016. The Co-ordinate Bench reproduced the finding rendered in the case of M/s. S.H. Chougule (supra) at para 11 of the said decision. Therefore, considering the facts and circumstances of the case along with material evidence on record I hold that the AO has failed to follow the guidelines issued by the CBDT for converting the limited scrutiny into complete scrutiny without prior approval of PCIT/CIT concerned, therefore, in my opinion, the AO lacks jurisdiction to carry out the assessment and the addition made by the AO u/s. 56(2)(vii)(b) is not justified. Therefore, the order of CIT(A) in confirming the addition made by the AO on account of income from other sources fails and it is set aside. Thus, ground Nos. 1 and 2 raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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