2015 (10) TMI 918

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....d on facts and in law in confirming the addition of Rs. 3,17,935 under section 68 of the Act, 1961, which addition is contrary to the provisions of law.          2. Because the provisions of section 68 are not applicable, the addition of Rs. 3,17,935 made on account of unexplained credit in the bank account be deleted.          3. Because without prejudice to the above, the identity, genuineness and the creditworthiness of the donors having being established/proved the Commissioner of Income-tax (Appeals) has wrongly treated the gift of Rs. 3,17,935 received, as unexplained.         4. Because complete evidences having....

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....n the additional ground was heard. 4. Learned counsel for the assessee has invited our attention to the assessment order with the submission that the assessee has filed the return of income on November 1, 2004 declaring income at Rs. 90,000 and it was processed under section 143(1) of the Act vide order dated March 28, 2006. Thereafter the assessee's case was taken up for scrutiny and notice under section 143(2) of the Act was issued on September 20, 2005. Learned counsel for the assessee has invited our attention to the Instruction No. 10 of 2004 dated September 20, 2004 issued by the Board with regard to scrutiny of assessment and in case of scrutiny assessment, the process of selection for scrutiny for returns filed up to March 31....

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....nnot be held to be bad. 6. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the orders of the authorities below and the judgments referred to by the assessee, we find that this issue was examined by the hon'ble Chattisgarh High Court and hon'ble Calcutta High Court. 7. In the case of Deputy CIT v. Sunita Finlease Ltd. [2011] 330 ITR 491 (Chattisgarh), the hon'ble Chattisgarh High Court has categorically held that Instruction No. 9 of 2004 are binding on the Income-tax authorities and if the assessment is framed consequent to the selection of scrutiny of a case after the prescribed period, the said assessment is bad in law. The relevant observations of the hon'ble Chattisgar....

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....4, i.e., during the current financial year 2004-05. The selection for scrutiny of the assessee's case and completion of the assessment was not valid." 8. In the case of Amal Kumar Ghosh v. Asst. CIT [2014] 361 ITR 458 (Cal) the issue was examined by the hon'ble Calcutta High Court and their Lordships have also made similar observations. Relevant observations of their Lordships are extracted hereunder (headnote) :                 "Held, allowing the appeal, (i) that even assuming that the intention of the Central Board of Direct Taxes was to restrict the time for selection of the cases for scrutiny to a period of three months, it could not be said that t....