Case Law Details
Ravi Prakash Khandelwal Vs DCIT (ITAT Lucknow)
As per the assessment order, the case has been selected under Limited Scrutiny through CASS for scrutiny of (i) Large deduction claimed under section 54B, 54C, 54D, etc. and (ii) Large cash deposits in saving bank accounts.
Para 3 of the CBDT Instruction F.No. DGIT(Vig.)/HQ/SI/2017-18 dated 30/11/2017 states that the jurisdiction of the Assessing Officer while making assessments in Limited Scrutiny cases, by initiating inquiries on new issues has to comply with mandatory requirements of the relevant CBDT Instructions dated 09.2014, 29.12.2015 and 14.07.2016, i.e. the approval of the PCIT.
As is evident from the assessment order, in the present case, we find that the same is beyond the intent purpose and scope of the jurisdiction of the Assessing Officer, as the assessment has been made, exceeding his jurisdiction, because the case has been selected for limited scrutiny only on two issues, i.e. (i) Large deduction under section 54B, 54C, 54D etc., and (ii) Large cash deposits in savings account of the assessee; whereas the additions have been made on the indexed cost of acquisition at Rs. 17,59,545/- and indexed cost of improvement at Rs.20,90,319/-, which is covered under section 48 of the Act, and is outside the scope and purview of the reasons of limited Moreover, the approval of the PCIT is mandatorily required for converting the Limited Scrutiny to a Complete Scrutiny. So, the proper course for the AO before making these additional enquiries would have been to take approval from the administrative Commissioner to widen the scrutiny. This, however, was not done and therefore, the action of the AO is violative of the CBDT Instruction. Thus, the addition so made by the Assessing Officer, in gross violation of the CBDT Instruction, is liable to be deleted.
FULL TEXT OF THE ITAT JUDGEMENT
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