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Facts
The assessee's appeal for assessment year 2016-17 arises against an order involving proceedings under Section 144 of the Income-tax Act, 1961. The case was selected for limited scrutiny to examine cash deposits during the demonetization period.
Held
The Tribunal held that the case selected for limited scrutiny related to demonetization, which occurred in FY 2016-17, while the relevant previous year was FY 2015-16 (AY 2016-17). The lower authorities could not convert a limited scrutiny case to a complete scrutiny without proper approval.
Key Issues
The primary issue was the validity of the assessment order, specifically whether a case selected for limited scrutiny could be expanded to complete scrutiny without necessary approval, considering the mismatch in the relevant assessment period and the demonetization period.
Sections Cited
144
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Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for assessment year 2016-17, arises against the Addl/JCIT(A)-1, Coimbatore’s DIN and order no. ITBA/APL/S/250/2023-24/1058113453(1) dated 21.11.2023, involving proceedings under section 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties at length. Case file perused.
It emerges at the outset that there arises the first and foremost legal issue of validity of the impugned assessment dated 01.11.2018 itself wherein case was selected for “limited scrutiny” to examine “cash deposit during demonetization period” whereas relevant previous year before us is financial year 2015-16 i.e. assessment year 2016-17. The above demonetization had admittedly come in F.Y. 2016-17 only. That being the case, we are of the considered view that the learned lower authorities could not controvert the assessee’s case to a “complete” scrutiny without necessary approval from the competent authority going by PCIT vs. Weilburger Coatings (India) (P.) Ltd (2023) 155 taxmann.com 580 (Cal). The assessee succeeds in her instant legal ground in very terms therefore.
This assessee’s appeal is allowed. .
Order pronounced in the open court on 17.02.2025