CBS International Projects P. Ltd. Vs ACIT (ITAT Delhi)
Assessing Officer can widen the scope of scrutiny even if it is selected for scrutiny assessment under CASS. However, the condition precedent for such action of the Assessing Officer is that he has to seek prior approval of the higher authorities. A perusal of the assessment order shows that the Assessing Officer has not mentioned as to when the permission from the PCIT was sought to make further enquiries in the case of the assessee. Considering the facts of the case in totality, in the light of the CBDT Instruction No. 7/2014 dated 26.09.2014, qua notice u/s 143(2) of the Act, we are of the considered opinion that the assessment order so framed by the Assessing Officer is not in consonance with Instruction of the CBDT and, therefore deserves to be quashed.
FULL TEXT OF THE ITAT ORDER
This appeal by the assessee is preferred against the order of the ld. CIT(A) – 2, New Delhi dated 20.11.2018 pertaining to A.Y 2015-16.
2. Vide ground No. 1, the assessee has challenged the validity of the assessment order framed u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’ for short] claiming that the return selected for scrutiny assessment for limited scrutiny on two issues and the Assessing Officer has completed assessment by making additions on other issues. Ground No. 2 is in relation to merits of the disallowances made by the Assessing Officer.
3. Since Ground No. 1 goes to the root of the matter, we will address to it first.
4. Return for the year was filed on 30.09.2015 declaring loss of Rs. 4.11 crores. Return was selected for scrutiny assessment through CASS. The limited scrutiny was in respect of :
(i) higher turnover returned in Service Tax Return as compared to ITR, and
(ii) mismatch in profit before tax as per profit and loss account and schedule BP of return [Verification of MAT liability]
5. The assessee was asked to explain its case on the two issues, verification of which required the scrutiny assessment. The assessee filed a detailed reply explaining the issues and the Assessing Officer was satisfied with the reply of the assessee. However, while completing the assessment, the Assessing Officer made the following additions :
