ITAT Order: Procedural Violation in Limited Scrutiny Assessment ...

Legal Scrutiny Breach: Assessing Officer Overreaches Jurisdictional Limits, Violates Procedural Safeguards in Tax Assessment

May 23, 2025

Case Laws     Income Tax     AT

ITAT Order: Procedural Violation in Limited Scrutiny Assessment The ITAT held that the Assessing Officer (AO) exceeded jurisdictional limits by expanding the scope of 'limited scrutiny' without following mandatory procedural requirements. The AO improperly investigated issues beyond the specified limited scrutiny parameters, disallowed capital loss, and determined business loss without obtaining prior approval. Furthermore, the AO violated Section 144C by failing to issue a draft assessment order to the non-resident assessee before passing the final order. Consequently, the assessment order was deemed null and void due to jurisdictional defects and statutory non-compliance. The assessee's appeal was allowed, effectively invalidating the assessment proceedings.

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