ANKUR DEALCOM PRIVATE LIMITED,KOLKATA vs. PCIT, KOLKATA - 2,, KOLKATA

At the time of hearing, the ld. Counsel pressed the ground no.3, which is extracted as under: - “For that the ld. Principal Commissioner of Income Tax (PCIT) erred in law and on facts in invoking Section 263 of the Income Tax Act, 1961, to revise the assessment order passed u/s 143(3) dt. 23.12.2022, which is unlawful and illegal ab-initio.” 03. Brief facts of the case are that the assessee filed the return of income on 23.02.222, declaring total income of ₹9,35,020/-. The return was processed u/s 143(1) of the Act and thereafter the case was selected

The ld. AR vehemently submitted before us that in the original assessment preceding notice u/s 143(2) dated 28.06.2022 was issued , which is not in conformity with the C.B.D.T. Instruction F. No. 225/157/2017/ITA-II Dated 23-06-2017 and therefore, the assessment framed based on the said invalid notice was also invalid and bad in law. The ld. AR contended that it has been decided in a series of decisions namely Hind Ceramics Pvt. Ltd. Vs. DCIT in & 610/KOL/2024 for A.Y. 2012-13 & 17-18, M/s Durga Automotives Pvt. Ltd. Vs. DCIT in for A.Y. 2017-18, Sajal Biswas Vs. ITO in ITA No. 1244/KOL/2023 for A.Y. 2017-18. The ld. AR further submitted that the present revisionary order passed u/s 263 of the Act was passed revising the assessment framed u/s 143(3) of the Act in consequence to invalid notice u/s 143(2) of the Act and therefore, the

The ld. DR on the other hand submitted that the assessee has not challenged the validity of the assessment order either before the ld. CIT (A) or before the Tribunal and it is for the first time the validity of the order is being challenged. The ld. DR therefore prayed that the argument of the ld. Counsel of the assessee is not maintainable and may be brushed aside.

After hearing the rival contentions and perusing the materials available on record, we find that the assessment has been framed in this case u/s 143(3) vide order dated 23.12.2022 by NFAC, assessing the income of the assessee at ₹8,60,49,114/- as against the returned income of ₹9,35,020/-. We note that in this case the notice u/s 143(2) of the Act was issued on 26.08.2022, which apparently is not in accordance with the C.B.D.T. Instruction F. No. 225/157/2017/ITA-II Dated 23-06- 2017. We note that in terms of the above CBDT instruction, the notice u/s 143(2) has to be in any of the three formats namely; (i) Limited Scrutiny (Computer Aided Scrutiny Selection) (ii) Complete Scrutiny (computer Aided Scrutiny Selection) and (iii) Compulsory Manual Scrutiny. Since, the notice has been issued in an invalid format which is obviously invalid and therefore, any assessment based on the said “After hearing the rival contentions and perusing the materials available on record, we find that though the appeal filed before us is against the revisionary order as passed by the ld. PCIT u/s 263 of the Act whereby the PCIT set aside the order of assessment framed u/s 143(3) dated 10.04.2021 for two reasons (i) provision for bad and doubtful debts made by the assessee were in fact inadmissible to the tune of ₹4,32,92,508/- and (ii) the excess addition to fixed assets by ₹65,69,270/- which remained unexplained and resulted into under assessment of income to that extent. The assessee has raised additional ground claiming therein that the assessment framed u/s 143(3) dated 10.04.2021, was framed consequent to issuance of notice u/s 143(2) read with section 12E of the Income Tax rules, 1962, dated 22.02.2019, which was not issued in accordance with the CBDT Instruction F.no. 225/157/2017/ITA-II dated 23.06.2017 which for ready reference is extracted the CBDT instruction:- “F.No.225/157/2017/1TA.11 Government of India Ministry of Finance Department of Revenue (CBDT) North Block, New Delhi, dated the 23rd of June, 2017 To All Pr. CCsIT/Pr. CCIT(International-tax)/CCIT(Exemptions)/Pr. DsGIT Therefore considering the defect in the issuance of notice , we are ofd the considered view that the assessment framed on the basis of said notice is invalid and so is the revisionary proceeding based on the said assessment framed. The case of the assessee find support from the decision of the co-ordinate Bench in the case of Srimanta Kumar Shit (supra) as we referred to above. For the sake of ready reference, the operative part is reproduced below:- “12. A perusal of the above format would indicate that though in the heading, it exhibits limited scrutiny (Computer Aided Scrutiny Selection) but thereafter in the first paragraph, it only talks of scrutiny and then in second paragraph, it talks upon the opportunity being provided to the assessee what he wants to say in support of the return. It is pertinent to observe that in para one, the ld. AO has to identify the issues for examination. If this proforma is being read with the first paragraph of the assessment order, then, it would reveal that in the third line of the first paragraph, ld. Assessing Officer has used the expression “this return was selected for scrutiny in “CASH” on the issue of cash deposits during demonetization period”. It would indicate that the case was selected for scrutiny but for the issue of cash deposit during demonetization, this mention of the issue would indicate that it was for a limited purpose of scrutinizing the cash deposits during demonetization. Its scope for making other additions would only be

In the result, the appeal of the assessee is allowed.