Case Law Details
Preetiben Chhatrasingh Chauhan Vs PCIT (ITAT Surat)
ITAT Surat held that AO cannot go beyond reason for which matter was selected for limited scrutiny. Thus, PCIT cannot pass revisionary order u/s. 263 of the Income Tax Act on other aspects outside the scope of limited scrutiny.
Facts- The assessee earned income from house property, business, agriculture income, and income from other sources during the year. The case was selected for limited scrutiny assessment, on the issue that assessee has introduced capital during the year, which is very high as compared to the profit after tax of the assessee. The assessment was completed u/s 143(3) on 13.01.2021 accepting the returned income as such.
Later on, PCIT has exercised his jurisdiction u/s 263 of the Act. On perusal of assessment records, it was noticed by PCIT that assessee has introduced capital in M/s Sai Nath Petroleum from various sources after claiming capital gains and business income on sale of land and a number of The computation of such transaction which led to build of capital in Sai Nath Petroleum was also perused and it was noted by PCIT that there is huge discrepancy which needs to be explained by the assessee, considering these facts a notice was issued to the assessee on 10.03.2023 stating that why assessment framed for assessment year (A.Y) 2018-19 should not be revised u/s 263.
PCIT held that AO has passed the assessment order without making inquiries or verification on the issue which ought to have been made in the assessee`s case therefore the assessment order u/s 143(3) of the Act by AO is erroneous in so far it is prejudicial to the interest of revenue. Therefore, PCIT directed AO to frame the assessment de- novo after making proper enquiries. Being aggrieved, the present appeal is filed.
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