Limited Scrutiny due to T/O Difference in ITR & Service Tax Return: ITAT allows AO to question 26AS Mismatches too!

The brief facts of the case was that the assesee was engaged in the business of civil construction and works contract. On perusal of Form 26AS, assessing officer noted that the assesee had shown receipt of Rs. 1,46,09,381/- only in its books of account from a party, whereas as per Form 26AS the assessee had received payment of Rs. 1,60,34,844/-. Therefore, there was a difference of Rs. 14,25,463/- between books of account and the payment received as per Form 26AS. The Assessing Officer treated the amount of Rs. 14,25,463/- as undisclosed receipts and added the same to the income of the assessee.

Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions dismissed the appeal.

Before tribunal assessee submitted that Assessing Officer travelled beyond the scope of limited scrutiny. It was submitted that the case was selected for limited scrutiny. The basis for limited scrutiny was that turnover declared by the assessee in the return of income was at Rs. 6,01,95,473/- as against the turnover shown in the Service Tax return at Rs. 1,68,92,947/-. Therefore, it was contended that the issue was regarding difference in the turnover. The ld. DR submitted that here was mismatch of figures in the service tax return and income tax return. Therefore, the issue was related to turn over and same was required to be verified. Hence, the Assessing Officer did not exceed its jurisdiction. ITAT upon hearing both the parties was of the view that since the assessee failed to explain nature of payment received whether such receipt was part of service tax return or not. Therefore, In the absence of the relevant evidences, the Assessing Officer was justified in making the addition.