Milani Swanirbhar Gosthi Vs ITO (ITAT Kolkata)
ITAT Kolkata Quashes Assessment: Invalid 143(2) Notice & NFAC Lacked Jurisdiction; Two Fatal Defects: Tribunal Rules Scrutiny Notice Invalid & NFAC Had No Power Pre-2022; Milani Swanirbhar Gosthi Vs ITO – ITAT Kolkata Strikes Down Assessment for Legal Defects; Assessment Void: Invalid Scrutiny Notice & NFAC Jurisdiction Missing, Rules ITAT Kolkata; ITAT Kolkata: CBDT Instructions Binding – Defective Notice & NFAC’s Lack of Authority Quash Assessment
Kolkata Tribunal quashed the entire assessment proceedings on two crucial grounds—(i) invalid notice issued u/s 143(2) in violation of CBDT Instruction, & (ii) absence of jurisdiction with NFAC to issue notice u/s 142(1) prior to 30.03.2022.
Facts
Assessee, a society, filed return on 15.10.2018 declaring income of ₹19.96 lakh. Case was selected for scrutiny & assessment framed u/s 143(3) on 18.03.2021. On appeal, CIT(A) NFAC dismissed assessee’s case ex-parte. Before Tribunal, assessee raised legal grounds challenging the validity of notices issued u/s 143(2) & 142(1).
Invalidity of 143(2) Notice
Assessee contended that notice dated 22.09.2019 was not in conformity with CBDT Instruction No. 225/157/2017/ITA-II dated 23.06.2017, since it merely mentioned “Computer Aided Scrutiny Selection” without specifying whether scrutiny was “limited” or “complete.” Tribunal, relying on coordinate bench decisions in Tapas Kumar Das vs. ITO (ITA 1660/KOL/2024, AY 2017-18) & Shib Nath Ghosh vs. ITO (ITA 1812/KOL/2024, AY 2018-19), held that such defective notice is invalid. Since CBDT instructions issued u/s 119 are binding on the Department (relying on SC in UCO Bank), violation rendered the entire assessment void ab initio.
