DAGA ARUN & CO

AIS/TIS is a Valuable Tool—but Not a Substitute for Professional Due Diligence

As the ITR filing season progresses, one important point deserves emphasis:

AIS/TIS should never be treated as the sole basis for preparing an Income Tax Return. It is a reporting tool, not a complete statement of all transactions that may require disclosure under the Income-tax Act.

Before finalising any return, every Chartered Accountant and tax professional should specifically verify the following with the client:

✔️ Intraday share trading transactions (speculative business).
✔️ Futures & Options (F&O) transactions (non-speculative business).
✔️ Purchase or sale of immovable property, including transactions below ₹30 lakh, which may not be reflected in AIS/TIS.
✔️ Cash deposits exceeding ₹10 lakh in Savings Bank Account(s) during the financial year.
✔️ Cash deposits exceeding ₹50 lakh in Current Account(s) during the financial year.
✔️ Foreign Assets requiring disclosure in the relevant ITR schedules.
✔️ Foreign Income and eligibility to claim relief under the applicable Double Taxation Avoidance Agreement (DTAA).
✔️ Cash payments towards Credit Card bills, wherever applicable.

Professional Reminder:
Many disclosures in the ITR are based on facts and statutory reporting requirements, not merely on what appears in AIS/TIS. Depending exclusively on AIS/TIS may result in incomplete reporting, notices, reassessment proceedings, or denial of legitimate claims.

A well-designed Pre-ITR Client Information Checklist remains one of the most effective risk management tools for every tax practice.

What additional checkpoints do you include in your ITR filing checklist? Share your experience in the comments.

ITAT Delhi Draws a Clear Line: Breach of Limited Scrutiny = Invalid Assessment

The ruling in Vivasvat Retail and IT Services Pvt. Ltd. vs ITO (AY 2016–17) is a strong reminder that jurisdictional discipline is non-negotiable in income-tax proceedings.

📌 What happened:
Case selected for limited scrutiny under CASS to examine share premium u/s 56(2)(viib)
AO bypassed the mandate and made addition of ₹3.47 crore u/s 68
No approval obtained for expanding the scope
⚖️ ITAT’s Firm View:
The AO acted beyond jurisdiction
Expansion of scope without approval is not a procedural lapse — it is a legal defect
Such an assessment is unsustainable in law

✅ Result:
Entire assessment quashed
Addition of ₹3.47 crore deleted in full
💡 Professional Insight: This decision sends a clear signal — limited scrutiny is not a gateway for fishing enquiries. Any addition made outside the approved scope, without following due process, is liable to be struck down entirely.

*Important GST Case Law – Allahabad High Court (In Favour of Assessee)*

The Hon’ble Allahabad High Court in Sanjay Construction through AR Shivendra Kumar vs State of Uttar Pradesh (Writ Tax No. 161/2026, dated 17.02.2026) has delivered a significant ruling on the issue of unquantified interest in Show Cause Notice (SCN).

*Key Facts*
Department issued SCN for FY 2020-21.
Interest amount was not quantified in the SCN.
However, interest was later demanded in the Order.

*Legal Provisions Discussed*
Section 75(7), CGST Act – Amount demanded in the Order cannot exceed the amount specified in the SCN.
Section 75(9), CGST Act – Interest is payable whether or not specified in the order.

*Hon’ble Court Held*
Section 75(9) applies where interest is missing from the order, not where it is missing from the SCN.
If interest is not quantified in the SCN, it cannot be confirmed in the Order.
Demand violated Section 75(7).
Accordingly, both SCN and Order were quashed, with liberty to the Department to issue a fresh notice.

*Practical Takeaway*
✔ Proper quantification in SCN is mandatory.
✔ Interest cannot be imposed beyond the scope of SCN.
✔ Strong ground available in cases where interest is not specified in notice but demanded in order.
This judgment reinforces the principle of natural justice and procedural compliance under GST.
Colleagues may examine ongoing matters where interest has been confirmed without proper quantification in SCN.

CA Arun Daga