The Income Tax Appellate Tribunal (ITAT), Jaipur Bench held that the assessing officer couldn’t undertake complete scrutiny without seeking permission from the competent authority.
In the case of Sita Ram Swami vs. ITO, Jaipur it was ascertained that the Assessing Officer (AO) passed the order beyond his jurisdiction for the reason that the case for primarily selected for limited scrutiny and without seeking the permission of the competent authority to convert limited scrutiny into complete scrutiny.
The appellant was an individual who was engaged in the business of wholesale trading and repairing of electronic items. After filing the return additional amount was made, which was the unexplained investment in the property. The Assessing Officer (AO) in this case made the addition with respect to another transaction towards unexplained investment pertaining to the property. And issued a notice and ordered strict compliance. However, no addition was made towards the transaction to the sale of immovable property for which the matter was selected for the limited scrutiny.
The issue raised in this case was whether the Assessing Officer was justified in doing complete scrutiny without seeking permission from the competent authority or not?
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench comprising of a Judicial Member, Mr. Vijay Pal Rao, and a Accountant Member, Mr. Vikram Singh Yadav after hearing both the sides held that the Assessing Officer (AO) passed the order beyond his jurisdiction for the reason that the case for primarily selected for limited scrutiny and without seeking the permission of the competent authority to convert limited scrutiny into complete scrutiny.
The ITAT after due observation of facts set aside the order passed by the Assessing Officer (AO) and the tribunal allowed the appeal by the assessee.
Subscribe Taxscan Premium to view the Judgment
