Vivek Tracom Pvt. Ltd. Vs ITO (ITAT Kolkata)
Limited, Complete or Compulsory Manual Scrutiny not specified- Computer-Aided Scrutiny Without Format Not Valid – Tribunal Strikes Down 143(3) Order
Assessee raised an additional legal ground before the Tribunal contending that the notice dt 13.09.2018 did not specify whether the case was selected for limited scrutiny, complete scrutiny or compulsory manual scrutiny, which was mandatory as per CBDT Instruction No. 225/157/2017/ITA-II dated 23.06.2017 prescribing specific formats.
Tribunal admitted this additional ground, relying on the Apex Court rulings in Jute Corporation of India Ltd. (187 ITR 688) & NTPC Ltd. (229 ITR 383), holding that legal issues going to the root can be raised at any stage. It noted that the impugned notice merely stated “computer aided scrutiny selection” without mentioning its nature, thereby violating binding CBDT instructions. Tribunal referred to its earlier rulings in Tapas Kumar Das v. ITO (ITA No. 1660/Kol/2024, order dated 11.03.2025) & Shib Nath Ghosh v. ITO (ITA No. 1812/Kol/2024, order dated 29.11.2024), both of which held such defective notices invalid.
Holding that CBDT circulars issued u/s 119 are binding on the department & non-compliance renders proceedings void, the Tribunal ruled that the notice u/s 143(2) was invalid & consequential assessment was void ab initio. Accordingly, the assessment was quashed & the appeal of the Assessee was allowed. This ruling reinforces that assessments based on defective notices u/s 143(2) not conforming to CBDT’s prescribed formats are invalid & cannot be sustained.
