LAVANYA ESTATES PRIVATE LIMITED,PATNA vs. ITW WARD 2 (1) PATNA, PATNA
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Income Tax Appellate Tribunal, PATNA BENCH, PATNA
Before: SHRI RAJPAL YADAV & SHRI RAJESH KUMAR
आदेश/O R D E R PER SHRI RAJESH KUMAR, ACCOUNTANT MEMBER:
This appeal is filed by the Lavanya Estates Private Limited (Assessee / Appellant) against the appellate order passed by the National Faceless Appeal Centre, Delhi [hereinafter referred as Ld. CIT(A)] dated 2nd November, 2023, for Assessment Year 2017-18, whereby the appeal filed by the Assessee against the assessment order dated 25.11.2019, passed by the Income Tax Officer, Patna
Besides the grounds raised in the memorandum of appeals , the assessee has also raised additional grounds before us which are reproduced hereunder
“1. For that on the facts of the case the AO was wrong in adding other points when the scrutiny was fixed on CASS basis and the only reason was huge cash deposit in demonization period, but there was no addition on the same point, therefore the whole assessment is completely arbitrary, unjustified and illegal. 2. For that on the facts of the case the AO was wrong in adding other points when the limited scrutiny was fixed on CASS basis and the only reason was huge cash deposit in demonization period, but there was no addition on the same point, therefore the whole assessment is completely arbitrary, unjustified and illegal.” 3. After hearing both the parties and perusing the material available on record, we find that the issues in the additional grounds raised by the assessee are purely legal issues the facts qua which are available in the assessment folder and do not require any further verification of facts at the level of the AO. The assessee submitted that the issue is supported by the decision of Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 0383, wherein it was held that the Tribunal will have the discretion to allow or not allow a new ground raised but where the Tribunal is required to consider the question of law arising from the facts which are on record in the assessment proceedings such a question should be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Therefore considering the facts and circumstances, we are inclined to admit the additional grounds raised by the assessee for adjudication.
Facts in brief are that the assessee engaged in the business of real estate filed the return of income during the year on 31st March, 2018, showing nil income. The case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) and the reasons for selection of scrutiny was that large cash deposits during demonetization period. Notice u/s 143(2) of the Act was issued on 22.09.2018 followed by notice u/s 142(1) along with the questionnaire which were replied by the assessee. Finally, the ld. AO has not made any addition in respect of cash deposits by the assessee in its bank account as alleged in the notice issued u/s 143(2). The AO made three additions; namely, ₹5,00,000/- for share capital, ₹25,79,791/- for Unsecured loans and ₹84,03,000/- for Sundry Creditors, aggregating to ₹1,9,82,781/- in the assessment framed u/s 143(3) of the Act dated 25th November, 2019 without converting the limited scrutiny into complete scrutiny with the approval of the competent authority during the assessment proceedings and the assessment was framed as such.
On the other hand, the ld. DR supported the orders of the lower authorities and submitted that it was not mentioned on the face of the notice issued u/s 143(2) of the Act dated 22nd
After hearing the rival contentions and perusing the materials available on record. We find that the case of the assessee was selected under Computer Assisted Scrutiny Selection (CASS) for scrutiny to examine the issue that the assessee has deposited huge cash into its bank account during demonetization period though it was not stated in the notice that whether it was limited scrutiny or complete scrutiny. The case of the assessee supported by the decision of Tribunal, Delhi Bench in case of Dev Milk Foods Pvt. Ltd. Vs. ACIT in ITA No. 6767/Del/2019 dated 12.06.2020, held as under:-
“6.0 We have heard the rival submissions and have also perused the material on record. After considering the entire factual matrix we first deal with the primary arguments of the Ld. Authorized Representative that the conversion of the case from limited scrutiny to completer scrutiny was not legally valid. The subject of conversion of case from limited scrutiny to complete scrutiny has been dealt with in CBDT Instruction No.5/2016 which is being reproduced herein under for the sake of convenience: “2. In order to ensure that maximum objectivity is maintained in converting a case falling under ‘Limited Scrutiny’ into a ‘Complete Scrutiny’ case, the matter has been further examined and in partial modification to Para 3(d) of the earlier order dated 29.12.2015, Board hereby lays down that while proposing to take up ‘Complete Scrutiny’ in a case which was originally
In the result, the appeal of the assessee is allowed.
Order pronounced in the Court on 18th November, 2024 at Kolkata.
Sd/- Sd/- (RAJPAL YADAV) (RAJESH KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER Kolkata, Dated 18.11.2024 *SS, Sr.Ps आदेश की प्रतततिति अग्रेतषत/Copy of the Order forwarded to : अिीिार्थी / The Appellant 1. प्रत्यर्थी / The Respondent 2. संबंतित आयकर आयुक्त / Concerned Pr. CIT 3. आयकर आयुक्त ) ( 4. अिीि / The CIT(A)- पटना/DR,ITAT, PATNA, 5. तवभागीय प्रतततनति आयकर अिीिीय अतिकरण , , गार्ड फाईि / Guard file. 6.
आदेशानुसार/ BY ORDER, TRUE COPY
Sr. PS/ Assistant Registrar आयकर अिीिीय अतिकरण ITAT, पटना
