|The Tax Publishers2020 TaxPub(DT) 4049 (Jab-Trib) : (2020) 208 TTJ 0409
INCOME TAX ACT, 1961
Section 263 Section 153A Section 153C
AO, satisfied with the availability of cash, making addition to the extent the deficit was in his opinion, unexplained/not satisfactorily explained, did not consider it necessary to expand the scope of the inquiry further, that is to say, that the AO's discretion in the matter, i.e., for the conversion of a limited scrutiny to a comprehensive scrutiny, cannot be questioned, there was, therefore, no difference could be drawn between the two categories of assessments, limited and comprehensive, except the Board Instruction limiting the scope of inquiry in one category of assessments.
Revision under section 263 - Erroneous and prejudicial order - Conversion of limited scrutiny case to complete scrutiny -
The assessee's return for the relevant year having been selected for limited scrutiny under Computer Aided Selection Scheme (CASS), i.e., on two issues, being :-- (a) Tax credit mismatch, and (b) Cash deposit, The AO can where he deems it proper, seek conversion of the limited scrutiny case into a complete scrutiny case by obtaining necessary permission for the same, but his discretion in matter cannot be questioned. Held: In fact, most of the cash transactions were with the only one partnership firms, with the 'cash gift' from wife, Priyanka Sharma, at Rs. 78.50 lacs, added in assessment. No wonder, then, that none of these queries translated into any adjustment to the assessee's returned income in the post section 263 assessment order. Though a matter subsequent, with which this Tribunal was not really concerned, particularly as it was the absence of proper inquiry per se that makes an order erroneous, but as pointed out herein, there was nothing to show lack of application of mind by the AO, with, in fact, most of the queries being not related to assessee. This Tribunal, as a matter of fact, observed a complete absence of inquiry in the matter, i.e., even from the limited stand point of cash availability, not to speak of from a wider perspective, as in fact, was warranted. The order passed by the Pr. CIT was, therefore, sustainable, albeit only qua this issue alone, i.e., the non-disclosure of the surrendered amount of Rs. 45.17 lakhs as per section 132(4) statement dated 17-10-2014 by the assessee as per his return of income for the relevant year. AO ought to have sought his approval for comprehensive scrutiny, and examined the issues referred to in his notice, for which reference is made by him to para 4 of the Board's Instruction No. 7/2014, dated 26-9-2014. AO, satisfied with the availability of cash, making addition to the extent the deficit was in his opinion unexplained/not satisfactorily explained, did not consider it necessary to expand the scope of the inquiry further. That was to say, that the AO's discretion in the matter, i.e., for the conversion of a limited scrutiny to a comprehensive scrutiny, cannot be questioned. Board Instructions are binding on the AO under section 119. However, the Board Instructions itself enjoins the AO to, where circumstances so warrant, extend the scope of inquiry; his purview, nay, duty and, rather, the whole purport of the assessment proceedings, was to bring to tax the correct income chargeable to tax. And which, again, represents trite law.
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