Case Law Details
JDB Finance Vs DCIT (ITAT Kolkata)
Assessee’s case has been selected for ‘limited scrutiny’ under the CASS. Therefore, we note that the assessee’s case was selected for ‘limited scrutiny’ only and the assessing officer should not have expanded the scope of ‘limited scrutiny’ without recording reasons for doing so and without taking permission from the concerned Pr.CIT/CIT.
The ld. Counsel also drew our attention to the notice issued by assessing officer under section 142(1) dated 07.06.2016 which is placed at page no. 45 & 46 of the Paper Book wherein the assessee was directed to reconcile the sales turnover reported in the audit report vis-à-vis turnover in the Income Tax Return. We note that in order to make the compliance of the notice under section 142(1) dated 07.06.2016 (supra), the assessee appeared before the Assessing Officer along with the books of accounts and has reconciled the mismatch between turnover reported in the audit report vis-à-vis turnover in the Income Tax Return and the Assessing Officer has not taken any adverse view in respect of this issue for which the CASS has selected the return of income of the assessee for scrutiny u/s 143(3) of the Act. We note that the CBDT Circular issued u/s 119 of the Income Tax Act is binding on the Income Tax Authorities.The Assessing Officer’s jurisdiction is limited to the issue identified by the CASS in case of ‘Limited Scrutiny’ cases. In the assessee`s case under consideration the issue of mismatch of sales shown in the audit report vis-à-vis ITR was for ‘Limited Scrutiny’ but the assessing officer has expanded the scope of limited scrutiny without taking permission from the concerned Pr.CIT/CIT, since there is no whisper of any sanction or approval of the Pr.CIT/CIT therefore action of Assessing Officer to assess the loss of Rs.42,97,440/- is beyond his jurisdiction and in violation of the CBDT circular which he was bound to obey. Therefore, we find merit in the assessee’s grounds of appeal that the action of the Assessing Officer to make addition on account of loss of Rs.42,97,440/- is beyond jurisdiction and therefore null in the eyes of law and hence we delete the addition of Rs.42,97,440/-.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned appeal filed by the assessee, pertaining to assessment year 2014-15, is directed against the order passed by the Commissioner of Income Tax (Appeal)-2, Guwahati, in appeal no.763297561240417/432, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the ‘Act’) dated 09/12/2016.
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