TMI Blog2023 (9) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... arification filed by the assessee, accepted the returned income of the assessee and no additions were made in the assessment order. In the recent case of Sahita Construction Company [ 2022 (2) TMI 1298 - ITAT INDORE ] the Tribunal held that when the assessment is taken up for limited scrutiny, Ld. Pr. CIT cannot hold the assessment order as erroneous and prejudicial to the interest of revenue in respect of issue which was not a reason for selection of the case for limited scrutiny . 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate relief on above grounds of appeal. 3. The Learned Principal Commissioner of Income Tax, Range-1 Ahmedabad erred in directing the Assessing Officer, to carry out proper inquiries / verification on the issue of deduction claimed on account of investment depreciation provision in the Profit Loss account. 4. The appellant craves leave to add, alter, amend, substitute or withdraw any of the grounds of appeal stated hereinabove. 3. The brief facts of the case are that the original assessment order was passed by the Assessing Officer under Section 143(3) of the Act vide order dated 20.01.2021. In the original assessment, the case of the assessee was selected for limited scrutiny assessment under e-assessment scheme, 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer in this regard. Therefore, this amounts to an erroneous action on the part of the Assessing Officer, which resulted in loss of revenue, hence the order which was passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue. 4. The assessee is in appeal before us against the aforesaid order passed by the Principal CIT setting aside the assessment order as being erroneous and prejudicial to the interests of the Revenue. Before us, the Counsel for the assessee submitted that the findings of the Principal CIT holding the assessment order as being erroneous on an issue which is beyond the scope of limited scrutiny, is not in accordance with law. The Counsel for the assessee placed reliance on variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or selection of the case for limited scrutiny . The ITAT observed that perusal of records shows that assessee s case was selected for limited scrutiny through CASS for verification of contract receipts/fees mismatch, sales turnover mismatch and tax credit mismatch . The issue of payment to contractors and tax deducted thereon was never a part of reasons for the limited Therefore, there was no occasion for the Ld. AO to examine this issue for payment to contractors. It is well settled that in case of limited scrutiny matter Ld. AO has to work within the parameters observed by the Central Board of Direct Taxes; instruction dated 29.12.2015 and various other circular issued in this behalf. Since the assessee s case was selected for limited sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O even when assessee's case was selected for limited scrutiny to verify introduction of capital in NBFC/investment companies which was linked to such disallowance, since issue of disallowance under Section 14A was not an issue selected for limited scrutiny, Principal Commissioner could not make a roving enquiry in guise of a limited scrutiny and thus, impugned revisionary order was to be quashed. In the case of Balvinder Kumar v. Principal CIT [2021] 125 taxmann.com 83 (Delhi - Trib.) , the ITAT held that in case of limited scrutiny, 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 asp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations in this regard: As a matter of fact, what cannot be done directly cannot be done indirectly. Accordingly, in terms of our aforesaid observations, we are of the considered view that as the A.O had aptly confined himself to the issue 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 were clearly beyond the realm of the reason for which the case of the assessee was selected for limited scrutiny as per the AIR information. 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 10-10-2016 is erroneous, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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