ACIT, CENTRAL CIRCLE-2, JAIPUR, JAIPUR vs. UNIMAX BUILDESTATE PVT LTD, JAIPUR

vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. The Revenue has filed the present appeal against the order of ld. CIT(A)-4, Jaipur dated 30.11.2023 passed under section 250 of the I.T. Act, 1961, for the assessment year 2014-15, whereas the assessee has filed the Cross Objection against the appeal filed by the revenue. The Revenue has raised the following grounds of appeal :-

“1.Whether on the facts and in the circumstances of the case, the ld. CIT (A) has erred inignoring the fact that the case was selected under CASS parameter for the reason Sales Consideration for property in ITR is less than consideration reported to verify the transaction of immovable property made by the assessee; and in allowing the appeal of the assessee on wrong presumption that the AO has exceeded the scope of inquiry allowed under Limited Scrutiny disregarding the fact that it is same single transaction involving the consideration reported under CASS parameter where the assessee is a purchaser.

2. On the facts and Whether on the facts and in the circumstances of the case the ld. CIT (A) has erred in deleting the addition of Rs. 2,58,00,000/- in not appreciating the inseparable concinnity of purchaser and seller in the transaction reported under CASS parameter and in ignoring the fact that the AO has restricted the enquiry only to the issue of limited scrutiny thereby bringing the undisclosed transaction under tax umbrella within the true spirit of the Income Tax Act, 1961.

3. Whether on the facts and in the circumstances of the case the ld. CIT (A) has erred in deleting the addition of Rs. 14,73,324/- ignoring the fact that the amount of Rs. 14,73,324/- for the registration charges of land was paid from the unexplained source of expenses.

4. The appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appellant proceeding.” The grounds raised in the Cross Objection are as under :-

CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. “1.The ld. AO erred in not accepting the order of CIT (A) and contesting for the addition made beyond the reason of selection of case of Limited scrutiny of the sale of property without following the procedure laid down as per law.

2. Without prejudice to the above, the ld. AO erred in not accepting the order of CIT (A) and disregarding the undisputed fact that the ld. AO has initiated enquiry on the issue of sale of property and therefore during assessment proceedings specifically asked to submit computation of capital gain from the assessee, only for the reason, the issue of limited scrutiny was very specific as “Sale consideration of property in ITR is less than consideration reported” and made additions beyond the reason of limited scrutiny without following the procedure laid down as per law.

3. Without prejudice to the above, the ld. AO erred in contesting the case ignoring the relevant documents communicated by it during appellate proceedings in regard to limited issue of selection of case of sale of property.

4. The Respondent craves to amend or alter any ground or add new ground at any time before or at the time of hearing of the appeal.”

Notice under section 143(2) of the I.T. Act, 1961 was issued to the assessee on 01.09.2015, fixing date of hearing on 14.09.2015, which was duly served upon the assessee through registered post. The Authorized Representative of the assessee attended. Notice under section 142(1) of the IT Act, 1961 calling for certain details CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. was issued on 06.04.2016; again on 03.05.2016 and once again on 06.06.2016. The ld. A/R submitted copy of ITR along with computation and audit report. Written submissions along with supporting papers, books of accounts comprising of cash book, Bank book, ledger and journal with supporting vouchers were produced which were test checked. 2.1 During the year under consideration, the assessee had purchased a chunk of land and got it registered. The land had been purchased for a consideration of Rs. 2,58,00,000/- as per the sale deed. Out of this amount, Rs. 2,00,000/- was paid in cash and the balance through cheques. As this transaction of purchase was not getting reflected in the books of the assessee, the assessee was asked to clarify the position. The assessee submitted its explanation that “ During the year the assessee purchased a property for Rs. 2,58,00,000/- on 07.06.2013, copy of the purchase deed enclosed herewith but registry was retained by the registrar due to Mauka Report and after Mauka report, registry was issued but the directors of the assessee Company forgot the registry and not taken physically from registrar office, payment of the said land purchased, to the seller (Shri Gyan Chand Agarwal) not made till today, i.e. still pending due to the dispute possession, and accordingly the assessee did not make payment to the seller.

CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. After audit of the year 2013-14, it was found and the directors of the Company recognized that a registry was made, i.e. land was purchased but registry not taken from the Department of the Registrar. Afterward in the financial year 2014-15 it is taken as purchase and it is stand as closing stock in the FY 2014-15.” The AO considered the reply of the assessee but could not found it tenable.The AO completed the assessment under section 143(3) of the IT Act, 1961 vide his order dated 21.12.2016 by making addition on account of value of investment made in land to the extent of Rs. 2,58,00,000/- which are not recorded in the books of accounts maintained by the assessee and also the expenses on registration of the land of Rs. 14,73,324/- incurred by the assessee, regarding which no explanation has been offered by the assessee. Finally, the after taking into account the loss of current year as shown by the assessee and brought forward losses set off, the AO assessed the total income of the assessee at Rs. 2,31,97,280/-. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) taking into consideration the facts of the case and discussing the matter in detail, allowed the appeal of the assessee.

CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. 3. Not being satisfied with the order of the ld. CIT (A), the revenue has filed the present appeal before the Tribunal.Before us, the ld. DR supported the order of the AO, and further filed written synopsis, which are being reproduced hereunder :

“ The cross objection being filed by the assessee for the A.Y. 2014-15against the appeal filed by the ACIT Central Circle-2, Jaipur vide ITA No. 103/2024. In this regard, brief facts of the case are as under :-

1.

2. The Ld. CIT (A) has failed to appreciate the fact that the case was selected to examine the transaction reported under the CIB head 401 – Sales consideration for property in ITR is less than consideration reported. This CIB code represents transaction of property executed between seller and purchaser of property. In this case, the assessee was purchaser of property which was tagged by CIB section for examination. During the assessment proceedings, the A.O. has found that the assessee had made payment for purchase of property out of his unaccounted money and made addition of Rs. 2,58,00,000/- under section 69 of the I.T. Act. Further, A.O. has also made addition of Rs. 14,73,324/- on account of expenses incurred for registration of land under section 69C of the I.T. Act. Looking to the facts mentioned above, it is clear that the then A.O. has made inquiry upto the issue flagged for scrutiny.

3. The Ld. CIT (A) has erred in deleting the addition of Rs. 2,58,00,000/- in not appreciating the inseparable concinnity of “Purchaser and Seller” in the transaction reported under CASS parameter and in ignoring the fact that AO has restricted the enquiry only to the issue of limited scrutiny thereby bringing CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. the undisclosed transaction under tax umbrella within the true spirit of the Income tax Act, 1961.

4. The Ld. CIT (A) has erred in deleting the addition of Rs. 14,73,324/- ignoring the fact that the amount of Rs. 14,73,324/- for the registration charges of land was paid from the unexplained source of expenses.”

4. On the contrary, the ld. AR of the assesseereiterated the submissions as were made before the ld. CIT (A) in support on the order of the ld. CIT (Appeals) and further submitted the written synopsis as under : Issue in Brief and CIT (A)`s view (Ground No. 1 and 2)

“The case of the assessee was selected for limited scrutiny under CASS for the following issue as mentioned in the assessment order dated 21-12-2016 and further confirmed in the letter dated 14-08-2019 issued from the office of LdAO:-

Sale consideration of property in ITR is less than consideration reported (CIB 401)

Based on the aforesaid reason, it is clear that the limited scrutiny being arisen due to the amount not being reflected in the sale consideration under the head capital gain presuming the transaction of sale of property, however, no issue of capital gain was there. Hence, the foundation of picking up the case of limited scrutiny itself not true and therefore the proceedings so taken is null and void.

In this endeavor and during assessment proceedings, the Ld AO on 30-11-2016 had asked to AR “to furnish the copy of sale deed for sale consideration of Rs 2,58,00,000/- and DLC rate of Rs 2,57,04,000/- sold on 24-06-2013 and also provide computation of Capital Gain on the said transaction.”

However, in the instant case, the assessee has not entered into any transaction for sale of property during the year under scrutiny and therefore the question of reporting of any sale consideration in ITR doesn’t arise and consideration shown is lesser or more is altogether irrelevant. The raising of query of computation of capital gain itself shows the mind of the Ld AO, who had on the basis of reason provided is under an impression of deficit of tax on capital gain arisen due to difference of consideration and DLC value. However, this was not the case of sale of property and therefore matter ends here.

In fact, the assessee has entered into a purchase transaction during the year under scrutiny. Obviously, the reason recorded for taking the case under limited scrutiny not related to the assessee and therefore order passed by the Ld AO making addition of reason other than the reason of limited scrutiny without following the procedure to convert into complete scrutiny, is bad in law.

The Ld CIT (A) after considering the facts of the case, remand report from the Ld AO, order sheet of assessment proceedings and submissions made in details had correctly arrived at the conclusion that the additions made in the assessment order can not be sustained being beyond the scope of limited scrutiny.

Submission in Brief (1) The CIT (A) in its order dated 30-11-2023 had passed the speaking order discussing the each and every fact, document and submission in the case and then arrived at conclusion that the additions made in the assessment order can not be sustained being beyond the scope of limited scrutiny. The Ld CIT (A) apart from other relevant judgements had also discussed the alike case in the judgement of this bench in the case of Sita Ram Agarwal vs ITO in 2015-16. The Copy of judgement is annexedat Page No 42 to 58 of the paper Book. In the said case, the Hon’ble Bench has set aside and quash the order passed by the Ld AO observing in brief that assessing officer has not mentioned as to when the permission from the PCIT was sought to make further enquiries in the case of the assesseeand the assessment order so framed by the AO is not in consonance with instruction of the CBDT.The similar issue was in the case of Manju Kaushik vs DCIT in ITA No 1419/JP/2019.

The CBDT instructions No 5/2016 dated 14-07-2016 has also been discussed in the said order and the same is applied in this case also. The copy of CBDT instruction No 5/2016 dated 14-07-2016 is also annexed at Page No 59& 60 of the paper Book. In the case of PCIT v. Weilburger Coatings (India) (P.) Ltd (2023) 155 taxmann.com 580, where-in, the Assessee’s case selected for scrutiny assessment. AO issued notice u/s 142(1) and passed order u/s 143(3) whereby he rejected set-off and carry forward of loss and made additions in income of assessee. On appeal to the Tribunal, it was held that the limited scrutiny for which the assessment was ordered to be scrutinized did not include the matter that the Assessing Officer decided. On appeal, the Calcutta High Court observed that the CBDT has noted instances where some of the Assessing CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. Officer were travelling beyond the issues while making assessment in limited scrutiny cases by initiating inquiries on new issue without complying with mandatory requirements of the relevant CBDT Instruction dated 26-9-2014, 29-12-2015 and 14- 7-2016. Further, it was reiterated that the Assessing Officer should abide by the Instructions of CBDT while completing limited scrutiny assessment and should be scrupulous about maintenance of note sheets in assessment folders. The order of the tribunal upheld.

Reliance may be placed on the following judgments on this legal issue:- 1. Manju Kaushik vs DCIT – Range 7 – 2. S.H. Chougule vs JCIT – and ITA No 605/PN/2015 3. Suresh Jugraj Mutha vs Addl CIT in ITA No 05/PN/2016 4. Nitin Killawala& Associates vs ITO in ITA No 1611/M/2013 5. CIT Vs. Nagesh Knitwears Pvt. Ltd. 345 ITR 135 6. CIT Vs. Mrs. Avtar Mohan Singh 136 ITR 645 7. Catholic Syrian Bank Ltd. Vs. CIT 343 ITR 0270 8. Dattatraya Gopal Bhotts Vs. CIT 150 ITR 460 9. Sukhdham Infrastructure LLP Vs CIT- ITA No 2611/kol/2019 10. Manju Kaushik vs CIT in ITA No 1419/JP/2019 11. Parbir Das vs CIT in ITA No 395/Gau/2019 12. Urban Improvement co vs CIT in ITA No 7496/Del/2019 13. Kintukumar Ambalal vs DCIT in ITA No 348/Ahd/2019 (2) The relevant documents / observations in addition to the detailed submission made to the Ld CIT (A) in respect of the issue as given in the order passed by the Ld CIT (A) is highlighted as given here-under:-

(a) Para 4.2 of the order (at Page no 16 of paper book)– where-in, the Ld AO vide its letter dated 14-08-2019 in response to the assessee letter dated 27-07-2019 has supplied the copy of order sheet of the assessment proceedings and confirmed that the reason of selection of the case of scrutiny is “Sale consideration of property in ITR is less than consideration reported”. The copy letter dated 14-08-2019 is annexed at Page No 61 to 65 of the paper Book.

(b) Para 4.1 and 4.4 of the order (at Page no 14 & 18 to 22 of paper book)– where-in, the note sheet of the Ld AO of the assessment proceedings is explained and it is being observed that: (i) On 14-06-2016, the copy of ITR and Audit report being submitted CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. (ii) On 30-11-2016, the Ld AO has asked to submit the copy of sale deed and computation of capital gain and case adjourned for short time of 2 days only i.e. 02-12-2016 (iii) On 02-12-2016, the AR has attended the case and submitted the information, as required and case adjourned to 06-12-2016 (iv) On 06-12-2016, the AR has not attended the case and on 21-12-2016, the Ld AO has passed the assessment order by making addition taking the reason other than reason of limited scrutiny.

(c) Para 4.3 of the order – (at Page no 18 of paper book) where-in, the Ld AO has submitted vide remand report dated 06-10-2020 that the issue raised i.e. ‘conversion of limited scrutiny to complete scrutiny’, not relevant to examination of additional evidence.

(d) Para 4.6 of the order – (at Page no 24 & 25 of paper book) where-in, the Ld CIT (A) has discussed the procedure need to comply in terms of the CBDT instruction 5/2016 dated 14-07-2016 in case of conversion of limited scrutiny to complete scrutiny.

(e) Para 4.10 of the order – (at Page no 36 of paper book) where-in, the Ld CIT (A) after reviewing all the facts and documents had given their findings in the case that the additions made in the assessment order cannot be sustained being beyond the scope of limited scrutiny and the same is hereby deleted.

In view of the above facts, documents, various similar case laws particularly identical case law of Hon’ble ITAT Jaipur Bench in the case of Sita Ram Swami vs ITO in and submissions made, the limited scrutiny being arisen due to the amount not being reflected in the sale consideration under the head capital gain presuming the transaction of sale of property, however, no issue of capital gain was there. Hence, the foundation of picking up the case of limited scrutiny itself not true. The non compliance of the CBDT instruction No 5/2016 dated 14-07-2016 is gross violation of CBDT instructions which rendered the assessment order null and void. Therefore, the addition made based on the issue taken up by the Ld AO in the assessment proceedings is void being beyond his jurisdiction to frame the limited scrutiny assessment and liable to set aside and the order passed by the Ld CIT (A) is correct.

Ground No 3 Without prejudice to the above, the Ld AO erred in contesting the case ignoring the relevant documents communicated by it during appellate proceedings in regard to limited Issue in Brief and CIT (A) view - (Ground No 3) The case of the assessee was selected for limited scrutiny under CASS for the limited issue as “Sale consideration of property in ITR is less than consideration reported (CIB 401)”, however, the assessee has not entered into any transaction for sale of property during the year under scrutiny and therefore the question of reporting of any sale consideration in ITR doesn’t arise and consideration shown is lesser or more is altogether irrelevant.

During assessment proceedings, the Ld AO has enquired to provide computation of capital gain evident from the note sheet of assessment proceeding forming part of its letter dated 14-08-2019 communicated to the assessee. During appellate proceedings, the Ld AO neither made any rebuttal nor provided any evidence in the matter of jurisdiction to convert the limited scrutiny to complete scrutiny in its remand report.

The Ld CIT (A) after considering the documents and information provided by the Ld AO had arrived at correct conclusion.

Submission in Brief The detailed submission has already been made while discussing the Ground No 1 and 2 (here-in-above). The limited scrutiny being arisen due to the amount not being reflected in the sale consideration under the head capital gain presuming the transaction of sale of property, however, no issue of capital gain was there. Hence, the foundation of picking up the case of limited scrutiny itself not true. The non compliance of the CBDT instruction No 5/2016 dated 14-07-2016 is gross violation of CBDT instructions which rendered the assessment order null and void. The fact is very much proved in the communication by way of letter and remand report provided by the Ld AO.The Ld. CIT (A) after taking into account the aforesaid information and communication provided by the Ld AO had decided the case. The filing of appeal by the Ld AO with Hon’ble ITAT is seems of disapproving of its own communication / information and liable to set aside.”

5. We have heard the rival contentions, perused the material on record and carefully gone through the orders of the lower authorities.Ground no. 1to 3 of the Revenue’s appeal are inter-related and challenging the deletion of additions in CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. order passed by the ld. CIT (A) ignoring the fact that the case was selected under CASS parameter for the reason “Sale Consideration of property in ITR is less than consideration reported (CIB 401)” to verify the transaction of immovable property made by the assessee and in allowing the appeal of the assessee on wrong presumption that the AO has exceeded the scope of inquiry allowed under Limited Scrutiny. 5.1 In this regard, the undisputed facts which are emerging from the records are that the matter was selected under CASS for Limited Scrutiny to examine “Sale Consideration of property in ITR is less than consideration reported (CIB 401)”. On perusal of the assessment order it is seen that addition has been made by the AO on the issue of Purchase of Property. These facts are not in dispute. The relevant part of the assessment order is as under :-

“ The assessee had filed his return of income for AY 2014-15 on 304, declaring loss of Rs. 34,49,903/-. The case was selected for LIMITED scrutiny under CASS and notice u/s 143(2) of the I.T. Act, 1961 issued to the assessee on 01.09.2015, fixing date for hearing on 14.09.2015, which was duly served upon the assessee through registered post. Shri Prashant Garg, CA and A/R of the assessee, filed POA and sought adjournment, which was granted. Notice u/s 142(1) calling for certain details was issued on 06.04.2016; again on 03.05.2016 and once again on 06.06.2016. The AR submitted copy of ITR along with computation and audit report. He attended the proceedings from time to time as per order sheet entries. Written submissions along with supporting papers were filed. Books of accounts comprising of cash book, Bank book, ledger and journal, with supporting vouchers were produced which were test checked. The case was discussed. The assessee is dealing in Real estate. The case had been taken up for LIMITED SCRUTINY for examining the following issue – The ld. AR of the assessee submitted that the since the assessee had not entered into any transaction for sale of property during the year under scrutiny and therefore the question of reporting of any sale consideration in ITR doesn’t arise and consideration shown is lesser or more is altogether irrelevant.The ld. A/R of the assessee further submitted that the AO during the assessment proceedings on 30.11.2016 also asked the AR “ to furnish the copy of Sale Deed for sale consideration of Rs. 2,58,00,000/- and DLC rate of Rs. 2,57,04,000/- sold on 24.06.2013 and also provide computation of Capital Gain on the said transaction”. In reply, the ld. A/R submitted to the AO that the assessee has not entered into any transaction for sale of property during the year under scrutiny and, therefore, furnishing of Sale Deed and computation of capital gain is irrelevant. During the assessment proceedings, the assessee has submitted that the assessee has entered into purchase transaction in the year under consideration. On the date of hearing fixed on 02.12.2016, the assessee furnished all the details, however, during the hearing itself the AO raised the issue of Purchase of property and gave the show cause notice. In fact, the assessee had entered into a purchase transaction during the year under scrutiny. Obviously, the reason recorded for taking the case under limited CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. scrutiny not related to the assessee and therefore order passed by the Ld AO making addition of reason other than the reason of limited scrutiny without following the procedure to convert into complete scrutiny, is bad in law. 5.2 Thus, on this background, the ld. A/R submitted that since the case of the assessee was selected for examination of the issue of Sale consideration of the property whereas the addition has been made in the assessment order on the issue of Purchase of property, hence the additions made by the AO towards unexplained investment made in land to the extent of Rs. 2,58,00,000/- and on account of unexplained expenses on registration of the land of Rs. 14,73,324/- are without scope of the scrutiny assessment for which the case was selected and hence such addition cannot be sustained. 5.3 The question that arise for consideration is whether the Assessing Officer wishes to expand the scope of enquiry beyond the matter for which the case of the assessee was selected for limited scrutiny, whether he has taken the requisite permission from the competent authority for converting a limited scrutiny into complete scrutiny or proceeding beyond the matter for which the case of the assessee was selected for limited scrutiny. In the instant case, we find that the Assessing Officer neither in the assessment order nor in the order sheet has stated that he has sought and has been granted any approval by the appropriate authority for converting the limited scrutiny into complete scrutiny or travelling beyond the CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. matter for which the matter was initially selected for limited scrutiny. Further, nothing has been brought to our notice during the course of hearing by the ld DR that such approval was sought by the Assessing officer and has been granted by the appropriate authority. Therefore, we find that the AO has taken up the fresh issue of unexplained investment for purchase of immovable property, which has no connection with the issue of Sale of immovable property for which the matter was selected for limited scrutiny, without seeking prior approval of the competent authority. The additions so made u/s 69 and 69C are liable to be quashed as the order passed by the AO would be nullity as beyond his jurisdiction in absence of requisite approval from the competent authority. The instructions issued by CBDT from time to time are clear on this point. During the course of hearing, our reference was drawn to CBDT Instructions no. 5 of 2016 dated 14.07.2016, the contents thereof read as under: “Subject: Direction regarding scope of enquiry in cases under ‘Limited Scrutiny’ selected through CASS 2015 & 2016-regd.-

Vide Instruction No. 20/2015 dated 29.12.2015 in File of even number, Board has laid down Standard Operating Procedure for handling of cases under ‘Limited Scrutiny’ which were selected through Computer Aided Scrutiny Selection in ‘CASS Cycle 2015’. In these cases, it was stated that the general scope of enquiry in scrutiny proceedings should be restricted to the relevant parameters which formed the basis for selecting the case for scrutiny. However, in revenue potential cases, it was further provided that ‘Complete Scrutiny’ could be conducted, if CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. there was potential escapement of income above a prescribed monetary limit, subject to the approval of administrative Pr. CIT/CIT/Pr. DIT/DIT.

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 earmarked for ‘Limited Scrutiny’, the Assessing Officer (‘AO’) shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under ‘Complete Scrutiny’. In this regard, the monetary limits and requirement of administrative approval from Pr. CIT/CIT/Pr. DIT/DIT, as prescribed in Para 3(d) of earlier Instruction dated 29.12.2015, shall continue to remain applicable.

3. Further, while forming the reasonable view, the Assessing Officer would ensure that: a. there exists credible material or information available on record for forming such view; b. this reasonable view should not be based on mere suspicion, conjecture or unreliable source; and c. there must be a direct nexus between the available material and formation of such view.

CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur.

5. It is also clarified that once a case has been converted to ‘Complete Scrutiny’, the AO can deal with any issue emerging from ongoing scrutiny proceedings notwithstanding the fact that the reason for such issue have not been included in the Note.

5.4 A perusal of the aforesaid instruction shows that in cases under ‘Limited Scrutiny’, the scrutiny assessment proceedings would initially be confined only to issues under ‘Limited Scrutiny’ and only upon conversion of case to ‘Complete Scrutiny’ after following the procedure laid down and seeking prior approval from the competent authority, the AO may examine the additional issues besides the issue(s) involved in ‘Limited Scrutiny’. The Assessing Officer can thus widen the scope of scrutiny where the matter was initially selected for scrutiny assessment.

CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. However, the condition precedent for such action of the Assessing Officer is that he has to follow the procedure so laid down and seek prior approval of the competent authorities. In the instant case, it is an admitted fact that no such approval has been taken by the Assessing officer. It is therefore, a case where the CBDT Instructions which are binding on the Assessing officer have not been followed by him. 5.5 Further, we find that a consistent view has been taken by various Benches of the Tribunal including Jaipur Benches that where the Assessing Officer has taken up fresh issue without converting limited scrutiny to complete scrutiny by taking prior approval of the competent authority, then the said order passed by the Assessing Officer will be nullity as beyond his jurisdiction. In this regard, we find that the Coordinate Bench of the Tribunal, Jaipur while deciding similar issue in the case of Shri Sita Ram Swami in dated 27.02.2020 has referred to the decision of this Bench in the case of Late Smt. Gurbachan Kaur vs. DCIT, dated 05.12.2019 wherein the relevant findings read as under :-

“7. Once the issue taken up by the A.O. was beyond the scope of limited scrutiny under CASS then until and unless the limited scrutiny is converted into comprehensive scrutiny by taking an approval of the competent authority, the said issue of determination of fair market value of the property as on 01/04/1081 is beyond the jurisdiction of the A.O. under the limited scrutiny. Since this issue was not raised by the assessee before the lower authorities and it requires verification of the assessment record to ascertain CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. whether the A.O. obtained the approval of the competent authority for conversion of the limited scrutiny to the comprehensive scrutiny. If the issue of determination of fair market value as on 01/04/1981 is taken up by the A.O. without expansion or conversion of the limited scrutiny to comprehensive scrutiny then such act of the A.O. is beyond his jurisdiction and the order passed by the A.O. U/s 154 r.w.s 155(15) of the Act would be illegal and void ab initio. This Tribunal has taken a consistent view on this issue in a series of decisions relied upon by the ld. Counsel for the assessee. In the case of CBS International Projects P. Ltd. Vs CIT (supra), the Delhi Benches of the Tribunal has considered relevant instructions issued by the CBDT for limited scrutiny under CASS and held in para 13 to 16 as under: “13. CBDT Instruction No. 20/2015 is as under: “Scrutiny Assessments-some important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection (‘CASS’)-reg.

The Central Board of Direct Taxes (‘CBDT’), vide Instruction No.7/2014 dated 26.09.2014 had clarified the extent of enquiry in certain category of cases specified therein, which are selected for scrutiny through CASS. Further clarifications have been sought regarding the scope and applicability of the aforesaid Instruction to cases being scrutinized.

2. In order to facilitate the conduct of scrutiny assessments and to bring further clarity on some of the issues emerging from the aforesaid Instruction, following clarifications are being made: i. Year of applicability: As stated in the Instruction No.7/2014, the said Instruction is applicable only in respect of the cases selected for scrutiny through CASS-2014. ii. Whether the said Instruction is applicable to all cases selected under CASS: The said Instruction is applicable where the case is selected for scrutiny under CASS only on the parameter(s) of AIR/CIB/26AS data. If a case has been selected under CASS for any other reason(s)/parameter(s) besides the AIR/CIB/26AS data, then the said Instruction would not apply. iii. Scope of Enquiry: Specific issue based enquiry is to be conducted only in those scrutiny cases which have been selected on the parameter(s) of AIR/CIB/26AS data. In such cases, the Assessing Officer, shall also confine the Questionnaire only to the specific issues pertaining to AIR/CIB/26AS data. Wider scrutiny in CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. these cases can only be conducted as per the guidelines and procedures stated in Instruction No. 7/2014. iv. Reason for selection: In cases under scrutiny for verification of AIR/CIB/26AS data, the Assessing Officer has to intimate the reason for selection of case for scrutiny to the assessee concerned.

4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the Assessing CO No. 2/JPR/2024 Unimax Buildestate Pvt. Ltd., Jaipur. Officer shall issue an appropriate show-cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances, due consideration shall be given to the submissions made by the assessee in response to the show-cause notice.

6. Hindi version to follow.