Mandatory CBDT scrutiny conditions control jurisdiction; failure to satisfy the stated precondition invalidates the notice and assessment.

A scrutiny notice that expressly relied on CBDT Instruction No. 5/2017 was invalid because the mandatory precondition for manual selection was not met: there were no prior additions in earlier assessment years on a recurring issue of law, and the stated monetary threshold was not otherwise satisfied. Since instructions under section 119 bind the Revenue, non-compliance went to the root of jurisdiction and could not be cured under section 292BB. The resulting notice under section 143(2) and the assessment based on it were therefore unsustainable, and the jurisdictional challenge succeeded.

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Issues: Validity of the manual selection of the assessee's case for scrutiny under CBDT Instruction No. 5/2017 and the consequent jurisdiction assumed through notice under section 143(2) of the Income-tax Act, 1961.

Analysis: The scrutiny notice specifically invoked Para 1(i) of CBDT Instruction No. 5/2017. That instruction permitted manual selection only where additions in earlier assessment years had been made on a recurring issue of law and the monetary threshold was satisfied. The record showed that no such prior additions existed in the assessee's case. Since the selection was made on a condition that was not fulfilled, the instruction was not complied with. Instructions issued under section 119 are binding on the Revenue, and the defect went to the root of jurisdiction. It could not be cured under section 292BB.

Conclusion: The manual scrutiny selection was invalid, the notice under section 143(2) was jurisdiction, and the assessment based on it could not stand.

Final Conclusion: The jurisdictional challenge succeeded, and the additions made in the assessment were deleted.

Ratio Decidendi: Where a scrutiny notice expressly rests on a specific CBDT instruction, the validity of jurisdiction must be tested strictly on the stated condition in that instruction, and non-fulfilment of the mandatory precondition vitiates the notice and the resulting assessment.

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