ITO Vs Shubhankar Estates Pvt. Ltd. (ITAT Bangalore)
Assessment Order Passed Without Issue of Show Cause Notice In Cass Based Scrutiny Is Invalid
11.2 Thus, from the above, the ld. CIT(A)/NFAC not only allowed the appeal of the assessee on merits but also on the legal ground stating that the breach of CBDT instruction which cast mandatory obligation on the AO to issue prior show cause notice before making addition in the assessment order are liable to be quashed. On going through the grounds of appeal, we take a note of the fact that the revenue has raised mainly two grounds i.e. the ld. CIT(A)/NFAC erred in deleting addition without appreciating that AO had done necessary enquiries by issuing commission u/s 131(1)(d) of the Act and secondly the ld. CIT(A) erred in deleting addition without appreciating that the assessing officer issued summons u/s 131 of the Act and the director of the assessee company itself had been show caused to explain as to why addition u/s 68 of the Act should not be made. Further, the revenue has also raised additional ground that ld. CIT(A)/NFAC erred in fact and in law in not considering the remand report duly submitted in compliance to direction of ld. CIT(A)/NFAC while deciding the issue on merits. We find that the revenue has not raised any ground related to adjudication of legal issue by the ld. CIT(A)/NFAC.We are completely in agreement with the ld. CIT(A)/NFAC that assessment order has been passed in breach of the CBDT. instruction no.20/2015 which cast mandatory obligation on the AO to issue prior show cause notice before making additions in the assessment order. Failure to do so is a gross violation of principles of natural justice. Further, we are also of the opinion that CBDT instructions are binding upon the AO and therefore, we also held that the assessment framed by the AO in contravention of the CBDT instruction are liable to be quashed.
