SUBHENDU NANDY,BURDWAN vs. I.T.O., WARD - 2(2), BURDWAN

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ITA 2022/KOL/2024Status: DisposedITAT Kolkata23 July 2025AY 2017-2018Bench: the Ld. AO or before the Ld. CIT (A) and is being raised for the first time before the Tribunal. The Ld. AR submitted that this is pure legal issue concerning the validity of the notice issued u/s 143(2) of the Act dated 24.09.2018 by the Ld. AO to the assessee. The Ld. AR submitted that no verification of facts are required to be done from any quarter whatsoever and therefore, the said additional ground may kindly be admitted for adjudication. The Ld. AR submitted that the assessee is with8 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 143(2) was not in conformity with the CBDT instructions and was therefore invalid. Consequently, the assessment framed based on this invalid notice was also quashed.

What were the facts?

The assessee's case was selected for scrutiny due to cash deposits during demonetization. The Assessing Officer (AO) issued a notice under Section 143(2) which the assessee later challenged as invalid. The AO made additions under Sections 69A and 40A(3) of the Income Tax Act.

What were the issues?

The primary issue was the validity of the notice issued under Section 143(2) of the Income Tax Act, 1961, in light of CBDT instructions. The secondary issue was the consequential validity of the assessment order.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 69A,Section 40A(3)

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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Somnath Ghosh, AR
For Respondent: Shri Ruchika Sharma, DR
Hearing: 21.05.2025Pronounced: 23.07.2025

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.07.2024 for the AY 2017-18.

2.

At the outset, the ld. Counsel for the assessee raised an additional ground challenging the validity of notice issued u/s 143(2) of the Act by raising following additional grounds: -

"FOR THAT in the facts and circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. acted unlawfully in not appreciating that none of the conditions precedent existed for and/or were fulfilled by the Ld. Income Tax Officer, Ward 2(2). Burdwan for his specious action of framing the assessment order u/s. 143(3) of the Income Tax Act, 1961 on 24-12-2019 in the instant case de hors any valid notice u/s. 143(2) of the Income Tax Act, 1961 issued in contravention of the C.B.D.T.

4.

The ld. DR on the other hand submitted that the issue was not raised before the other authorities below and therefore, may be restored to any of the authorities below for adjudication.

5.

After hearing the rival contentions and perusing the materials available on record, we find that the issue of validity of notice is a legal issue which goes to the root of the matter. We further find that no verification of facts is required to be made qua the said ground as all the facts are available in the appellate folder. Accordingly, we are inclined to admit the additional ground raised by the assessee for adjudication by relying on the decision of Hon'ble Apex Court in the case of Jute Corporation of India Ltd. Vs CIT (supra) and National Thermal Power Co. Ltd v. CIT (supra).

7.

The said order was affirmed by the ld. CIT (A) by upholding the assessment order when the assessee did not make any compliance to the various notices issued through e-mail and dismissing the appeal on the basis of material available before the appellate authority. \

8.

The ld. AR vehemently submitted before us that the assessment framed by the ld. AO is invalid because the notice issued u/s 143(2) of the Act dated 24.09.2018, is not as per CBDT instruction No.225/157/2017/ITA-II dated 23.06.2017. The ld. AR submitted that according to the said instruction, the notice issued u/s 143(2) of the Act is neither of three formats namely; (i) Limited Scrutiny (Computer Aided Scrutiny Selection) (ii) Complete Scrutiny (computer Aided Scrutiny Selection) (iii) Compulsory Manual Scrutiny. The ld. AR submitted that in Para No.3 of the said instruction, it was stated that all scrutiny noticed u/s 143(2) of the Act shall henceforth be issued in these revised formats only and in Para no.4, it was noted that the above may be brought to the notice of all for necessary compliance. The ld. AR

9.

The ld. DR on the other hands submitted that the notice issued u/s 143(2) of the Act is a computer-generated notice and does not possible to make any changes therein, so that the same could confirm to the instruction relied on by the ld. AR. Therefore, the additional ground raised by the assessee may kindly be dismissed.

10.

We have heard the rival contentions and perused the material place before us including the CBDT Instruction as noted above and also notice issued u/s 143(2) of the Act. In our opinion the notice issued u/s 143(2) is not in conformity with the CBDT instruction No. Instruction F. No. 225/157/2017/ITA-II dated 23.06.2017 and accordingly the notice issued is invalid and so is the consequential assessment framed. The case of the assessee is squarely covered by the decision of the coordinate benches stated above. For the sake of ready reference, we extract the operative part of M/s Durga Automotives Pvt. Ltd Vs DCIT (supra) as under:

Order pronounced in the open court on 23.07.2025.

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