Limited Scrutiny Powers limits AO Powers

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) held that an Assessing Officer cannot travel beyond the specific issues identified in a limited scrutiny assessment unless the case is validly converted into a complete scrutiny assessment in accordance with CBDT instructions. 

The Tribunal observed that additions made on issues falling outside the scope of limited scrutiny, without following the prescribed conversion procedure, are without jurisdiction and unsustainable in law. 

Consequently, the Tribunal deleted the disallowance made under Section 36(1)(iii) and granted relief to the assessee.