Chaitanya Bansibhai Nagori vs. CIT

Here is a short overview of the case:

Facts:

1. The appellant contended that notice was issued by the AO u/s 142(1) of the Income Tax Act for limited scrutiny to the verification of 7 different issues listed in the said notice and the points relating to verification of “purchase & sale of immovable property” was not covered or mentioned in the said notice.

2. As per the CBDT instruction the Assessing Officer in the case of “Limited Scrutiny” can only examine those issues for which the case has been selected or the issue mentioned therein.

3. In case a substantial verification on any other issue(s) is required, then ‘Complete Scrutiny’  can be done with the approval of the PCIT/CIT concerned in writing after being satisfied with the merits of the issue(s) necessitating ‘Complete Scrutiny’

4. The AO on the other hand taxed a property transaction not covered by the limited scrutiny.

The ITAT Ahmedabad held as below:

1. The AO has exceeded power for requiring the details of sales and purchase of the immovable property in limited scrutiny.

2. The appeal is allowed.