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Income Tax Appellate Tribunal, “A(SMC
Before: SHRI RAJESH KUMAR, AM
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 05.02.2024 for the AY 2017-18.
At the time of hearing the assessee raised legal issue challenging the assessment framed u/s 143(3) of the Act dated 23.11.2019, which was based upon the notice issued u/s 143(2) dated 10.08.2018, which was not in the prescribed format as prescribed by the CBDT in CBDT instruction no. F. No. 225/157/2017/ITA-II Dated 23-06-2017. We find that the issue goes to the root of the assessment and is a purely legal issue and assessee is within its right to raise the issue in the appellate proceedings. Accordingly, the issue is admitted for adjudication by following the decision of Hon'ble Apex Court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688 , ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal).
The ld. DR on the other hand submitted that the notice was generated online and therefore, assessee cannot find fault with the said format in which the notice was issued and prayed that the legal issue may be dismissed.
After hearing the rival contentions and perusing the materials available on record, we find that admittedly, the notice has been issued in violation of CBDT instruction no. F. No. 225/157/2017/ITA-II Dated 23-06-2017 and therefore, we find merit in the contention of the assessee that the assessment framed in consequent to the said notice is also invalid and is to be quashed. We note that the notice u/s 143(2) has to be mandatorily issued in either of any of the three formats namely; (1) limited scrutiny or (2) Completed scrutiny or (3) compulsory manual scrutiny. However, the said notice was not issued in either of the formats prescribed by CBDT. The case of the assessee is squarely covered by the decision of Sajal Biswas Vs. ITO (supra). The operative part is reproduced as under:-
“9. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly the notice issued u/s 143(2) of the Act dated 10.08.2018, specifies only computer aided scrutiny selection which neither mentioned it either to be a limited or a complete scrutiny nor compulsory manual scrutiny. Thus, the said notice has been issued in violation of the instruction issued by CBDT as noted above. In our opinion, the revenue authorities have to follow the instruction issued by
In the result, the appeal of the assessee allowed.
Order pronounced in the open court on 01.04.2025.