Hind Ceramics Pvt. Ltd. Vs DCIT (ITAT Kolkata)
ITAT Kolkata held that notice issued u/s. 143(2) of the Income Tax Act without specifying whether it is limited or complete of compulsory manual scrutiny is invalid and in violation of CBDT instruction F. No. 225/157/2017/ITA-II Dated 23-06-2017. Accordingly, appeal of assessee allowed.
Facts- During the course of assessment proceedings, AO noticed that the assessee has offered total license fees of ₹2,37,32,969/- from various shop keepers/ showroom owners to whom these premises were licensed in shopping complex cum mall, under the head income from house property and claimed standard deduction at the rate of 30% of ₹70,08,214/-.
According to AO the said income should be assessed under the head income from business or profession instead of house property on the ground that assessee’s business activity is tenancy/ logistic of godown/warehouse. CIT(A) affirmed the order of AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that undisputedly the notice issued u/s 143(2) of the Act dated 09.08.2018, 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 CBDT and violation thereto would certainly render the notice as invalid with the result all the consequential proceeding would also be invalid.
