Nadia District Central Cooperative Bank Ltd. Vs PCIT (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT) Kolkata Bench has nullified a revisionary order issued by the Principal Commissioner of Income Tax (PCIT) against Nadia District Central Cooperative Bank Ltd. for the Assessment Year (AY) 2018-19. The Tribunal’s decision hinged on a fundamental flaw in the original assessment process: the notice issued by the Assessing Officer (AO) under Section 143(2) of the Income Tax Act, 1961, was found to be invalid.
The case originated from an appeal by the assessee challenging the PCIT’s exercise of revisionary jurisdiction under Section 263 of the Act. The bank argued that the PCIT’s order lacked the necessary “twin conditions” for a valid revision. Crucially, the assessee introduced an additional ground of appeal, contending that the AO’s notice under Section 143(2) dated February 22, 2019, was issued without adhering to the mandatory CBDT Instruction F.No. 225/157/2017/ITA-II dated June 23, 2017. This, the assessee argued, rendered the entire assessment proceedings under Section 143(3) and the subsequent revisionary proceedings under Section 263 without jurisdiction and thus liable to be quashed.
Admitting the Additional Ground
The ITAT acknowledged that the issue raised in the additional ground was a purely legal one, going to the root of the matter and requiring no further factual verification. Citing the Supreme Court’s decisions in Jute Corporation of India Ltd. Vs CIT (187 ITR 688 SC) and National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 (SC), the Tribunal admitted the additional ground for adjudication. These precedents affirm that a new legal point can be raised for the first time before the Tribunal if it arises from facts already on record and requires no fresh investigation.
