Conversion of limited scrutiny to complete scrutiny is question of fact-High Court dismisses the writ

Conversion of limited scrutiny to complete scrutiny is question of fact. High Court dismisses the writ as petitioner had a right to appeal against the assessment order

The Petitioner assessee was aggrieved by the assessment order passed u/s 144 by converting limited scrutiny to complete scrutiny. The impugned order, though appealable, was challenged by way of a writ petition filed before the Hon’ble High Court.

ABCAUS Case Law Citation:
ABCAUS 2299 (2018) (04) HC

In the instant case, the self assessment of the petitioner was revised and the assessment was again completed under Section 144 of the Income tax Act, 1961 (the Act).

It was submitted that the case of the petitioner which was taken only for limited scrutiny initially was converted to a case of complete scrutiny later, without following the guidelines issued in this regard by the Central Board of Direct Taxes.

 According to the petitioner, a case of limited scrutiny of the returns could be converted as a case of complete scrutiny only in cases where materials are available to form a reasonable view that the same is a case of under assessment of income. It was also pointed out that in terms of said CBDT instruction no. 5/2016, there has to be credible materials on record or information for forming such a view.

According to the petitioner, there were absolutely no material on record to infer that the case of the petitioner was a case of under assessment and therefore, the conversion of the case of the petitioner as a complete scrutiny case was contrary to the directions issued by the Central Board of Direct Taxes.

However, His Lordship stated that the writ petition could not be entertained on the aforesaid ground, especially when the question raised was a pure question of fact and the petitioner had a remedy by way of appeal against the impugned order under the Act.

Accordingly, the Hon’ble High Court dismissed the writ without prejudice to the right of the petitioner to challenge the impugned order in appeal.

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