TMI Blog2023 (1) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned Pr. CIT/CIT. In the present case, we find that there is no such credible material or information which would justify widening the scope of limited scrutiny. Therefore, Ld. Pr. CIT, in our considered opinion, could not term the assessment order as erroneous or prejudicial to the revenue since the flagged issues, could otherwise be not examined by Ld. AO during the course of regular assessment proceedings. The revision of the order could not be upheld in the eyes of law. By quashing the same, we allow the appeal of the assessee. - ITA No.612/Chny/2021 - - - Dated:- 6-12-2022 - HON BLE SHRI V. DURGA RAO, JUDICIAL MEMBER AND HON BLE SHRI MANOJ KUMAR AGGARWAL, AM For the Appellant by : Shri T. Banusekar (C.A) Ld. AR For the Respondent by : Shri M. Rajan (CIT) Ld. DR ORDER Manoj Kumar Aggarwal (Accountant Member) 1. By way of this appeal, the assessee challenges the validity of revisional jurisdiction u/s 263 as exercised by learned Principal Commissioner of Income Tax, Chennai-3 (Pr.CIT) vide order dated 30- 03-2021 against an assessment framed by Ld. Assessing Officer (AO) u/s. 143(3) of the Act on 20-12-2018 for Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, Ld. AR has drawn attention to CBDT Instruction No. F.No.225/402/2018/ITA.II dated 28.11.2018 to support the submission that credible material or information being provided by any law enforcement / intelligence / regularity authority / agency was a pre-condition for going beyond the scope of limited scrutiny . The issues flagged by Ld. Pr. CIT were not within the scope of limited scrutiny before Ld. AO. The phrase credible material has to be read in conjunction with the word information and not to be treated as a separate limb. The credible material as well as information has to be an input from any external agency to enlarge the scope of limited scrutiny . The Ld. CIT-DR, Shri M.Rajan, on the other hand, submitted that the issue of cash deposit was connected with the capital gains earned by the assessee during the year and therefore, the revision was justified. Having heard rival submissions, our adjudication would be as under. 4. Upon perusal of case records, it could be seen that the assessee was subjected to limited scrutiny under CASS to verify Whether capital gains / loss is genuine and has been correctly shown in the return of income? During th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in 'Limited Scrutiny' cases, the same presently cannot be acted upon. 3. The matter has been considered by the Board. In order to enable proper enquiry/investigation in pending 'Limited Scrutiny' cases which were selected through CASS cycles of 2017 and 2018, where credible material or information has been/is provided by any law-enforcement/intelligence/regulatory authority or agency regarding tax-evasion by an assessee, it has been decided by the Board that issues arising from such information can also be examined during the course of conduct of assessment proceedings in such 'Limited Scrutiny' cases with prior administrative approval of the concerned Pr. CIT/CIT. 4. It is pertinent to mention that unlike CASS 2015 and 2016 cycles, where consideration of any additional issue lead to the conversion of case to 'Complete Scrutiny' as laid down in Instruction No. 5/2016 dated 14.07.16, the pending 'Limited Scrutiny' cases of CASS 2017 and 2018 cycles would not be taken up for 'Complete Scrutiny' as the present directive is only to facilitate consideration of those issues wherein specific information of tax-evasion has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pr. CIT/CIT. However, in the present case, we find that there is no such credible material or information which would justify widening the scope of limited scrutiny. Therefore, Ld. Pr. CIT, in our considered opinion, could not term the assessment order as erroneous or prejudicial to the revenue since the flagged issues, could otherwise be not examined by Ld. AO during the course of regular assessment proceedings. 7. Our view is duly supported by the recent decision of this Tribunal in Mr. Yuvaraj vs. ITO (ITA No.1722/Chny/2019 order dated 07.03.2022) wherein the bench held as under: - 6. We have heard both the parties, perused material available on record and gone through orders of the authorities below. We find that the assessment for the impugned assessment year has been taken up for limited scrutiny to verify large cash deposits into savings bank account and the Assessing Officer has completed assessment after verifying cash deposits in savings bank account and has made additions, when the assessee was unable to explain source for part of cash deposits. It is an admitted position of law that in limited scrutiny assessments, scope of verification is limited to the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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