The Income Tax Appellate Tribunal ( ITAT ), Pune has recently while allowing an appeal filed before it, held that the assessment shall not exceed the scope of prescribed limited scrutiny, except as per the due process of law.
The aforesaid observation was made by the Tribunal when a twin appeal was filed before it by an assessee, as against the CIT(A) 6, Pune’s separate orders; both dated 20.06.2018, passed in case Nos. PN/CIT(A)-6/DCIT Cir-8/10762/2016-17 and PN/CIT(A)-6/DCIT Cir-8/ 10075/2017-18, involving proceedings under Sections 143(3) and 271(1)(c) of the Income Tax Act, 1961, respectively.
The claim of the aggrievedassessee being that as per the CBDT Circular No. 20 of 2015 the impugned assessment itself is not valid once the Assessing Officer has not converted it from a “limited” to “complete” one, the Revenue raised vehement objections to admission of the assessee’s additional ground.
The Tribunal, however, identifying the issue involved in the appeal to be very much a legal one with all the relevant facts being already on record in assessee’s paper book, observed as follows:
“This tribunal’s Special Bench’s decision in All Cargo Global Logistics Ltd. Vs. DCIT (2012) 137 ITD 287 (Mum); after considering the hon’ble apex court’s landmark judgement in NTPC Ltd. vs. CIT 229 ITR 383, holds that we can very well entertain such a pure question of law in order to determine correct tax liability of an assessee, provided all the relevant facts form part of the records.”
“We make it clear that page 63 of the assessee’s paper book contains the assessee’s limited scrutiny notice dated 30.07.2016, indicating that the sole issue in his case is “interest income mismatch”, whereas the corresponding Section 143(3) assessment, dated 26.12.2016, added Section 68 unexplained cash credit of Rs.17,25,000/-, and that too, without converting it into a “complete” scrutiny as prescribed in the CBDT circular dated 14.07.2016 baring No. 5/2016.” – it added.
Thus, placing its reliance upon the Madras High Court decision in Padmavati case and finally allowing the assessee’s twin appeals in the open court, the Bench concluded:
“The learned DR could not place on record any material that the Assessing Officer had indeed undertaken all necessary steps as well as all approvals as prescribed in the foregoing twin CBDT circulars. Further, the case law (2020) 120 taxmann.com 187 CIT vs. Padmavati (Mad) (HC), holds that such an assessment could not exceed the scope of the prescribed “limited” scrutiny except as per the due process of law. And this is indeed coupled with various coordinate benches decisions reiterating the very legal proposition.
Faced with this situation, we hold that the learned Assessing Officer’s impugned assessment herein is non- est in the eyes of law and that the same stands quashed. The assessee thus, succeeds in his quantum appeal ITA No. 1615/Pun/2018.”
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