TMI Blog2023 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny assessment can be expanded by PCIT in 263 proceedings? - Since the assessee s case was selected for limited scrutiny on certain issues and Ld. AO has examined these issues and framed the assessments and the issue of examination of payment to contractors was not a part of the limited scrutiny reasons, in our considered view, Ld. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act and also erred in holding that assessment order is erroneous and prejudicial to the interest of revenue. In the case of Balvinder Kumar [ 2021 (3) TMI 649 - ITAT DELHI ] the ITAT held that in case of limitedscrutiny, Assessing Officer could not go beyond reason for which matter was selected for limited scrutiny thus, it would not be open to Principal Commissioner to pass revisionary order under section 263 on other aspects and remit matter to Assessing Officer for fresh assessment. Thus we hold that Ld. Pr. CIT erred in assuming revisionary powers u/s 263 of the Act and the impugned order of Ld. Pr. CIT is hereby set aside. Decided in favour of assessee. - ITA No. 123/Rjt/2022 - - - Dated:- 24-2-2023 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of such huge of cash deposits in the bank account for the year under consideration was not verified by the Assessing Officer. Accordingly, the PCIT issued notice to the assessee u/s. 263 of the Act. 4. Before the PCIT, the submissions of the assessee were two fold. Firstly, the issue under consideration with respect to cash deposited by the assessee in various bank accounts has already been examined by the Assessing Officer who had called for various details, bank statements of the assessee and after examination of such details and reply, the assessment has been completed by the Assessing Officer. The second contention of the assessee before the PCIT was that the case of the assessee was selected for limited scrutiny under CASS for the reason of default in TDS and disallowance for such default. So, the Assessing Officer only verified the limited reason/scope for which the case was selected for scrutiny and scope of assessment cannot expanded in proceedings u/s. 263 of the Act. In support of its contention, the assessee relied on various judicial precedents that scope of limited scrutiny assessment cannot be expanded/enhanced during the course of 263 proceedings by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nquiry, non application of mind by AO by adapting assessee's self serving contention in this regard. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx As per instruction No.20 of 2015 dated 21-12-2015, during the course of assessment proceedings in limited scrutiny cases it comes to the AO that there is potential escapement of income of Rs. 5 lakhs in respect of his charge, requiring substantial verification on any other issue, then the case would have been taken up for complete scrutiny with the approval of PCIT/CIT concerned. However, the AO has not extended the scope of limited scrutiny in the case inspite of the requirement of the verification over the issue of huge cash deposits. Similarly, the other instruction of CBDT dated 05-09-2019 also states that in the cases selected for limited scrutiny in which credible information has been received then such issues can be examined during the course of assessment proceedings with prior administrative approval of the Pr CIT/CIT concerned as per the procedure laid down in Board's circular dated 28-11-2018. Again the AO has not applied his mind while considering the al instruction of the CBDT. So, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch limited scrutiny cases with prior approval PCIT/CIT as per procedure laid down in Board Circular dated 28-11-2018. Accordingly, the contention of the counsel for the assessee before us is that in the instant case, since the case was opened under limited scrutiny, the scope thereof cannot be expanded by the PCIT to look into those issues which were not in the scope of limited scrutiny assessment . In response, ld. Departmental Representative submitted that order of the Assessing Officer is prejudicial since the officers of the Department are bound by the Instructions/Circulars issued by the CBDT and therefore looking into the facts of the instant case, the Assessing Officer should have converted the limited scrutiny assessment to full scrutiny assessment looking into the instant facts. 6. We have heard the rival contentions and perused the material on record. In the present case, we observe that during the course of assessment proceedings, various details including bank statements were called for by the AO and were submitted by the assessee by way of reply dated 18-11-2019. We also observe that the assessment proceedings were initiated under limited scrutiny assessment und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected for limited scrutiny on certain issues and Ld. AO has examined these issues and framed the assessments and the issue of examination of payment to contractors was not a part of the limited scrutiny reasons, in our considered view, Ld. Pr. CIT erred in assuming jurisdiction u/s 263 of the Act and also erred in holding that assessment order is erroneous and prejudicial to the interest of revenue. In the case of Balvinder Kumar v. Principal CIT [2021] 125 taxmann.com 83 (Delhi - Trib.) , the ITAT held that in case of limitedscrutiny, Assessing Officer could not go beyond reason for which matter was selected for limited scrutiny thus, it would not be open to Principal Commissioner to pass revisionary order under section 263 on other aspects and remit matter to Assessing Officer for fresh assessment. On the aspect, the Pune Tribunal in the case of Deccan Paper Mills Co. Ltd. v. CIT [IT Appeal no. 1013 1635 (Pun.) of 2015, made the following observations: 40. Now, coming to the aspect of book profits which was considered by the Commissioner and the order of the Assessing Officer was held to be erroneous and prejudicial to the interest of revenue. In this regard, it may be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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