2025 (5) TMI 1718

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....pellate Tribunal [ITAT] setting aside the assessment proceedings for Assessment Year [AY] 2016-17 pursuant to the assessment order dated 06.12.2018 passed by the Assessing Officer [AO] under Section 143 (3) of the Act, on the ground that the respondent's [Assessee] return was selected for scrutiny without the necessary approval of the jurisdictional Principal Commissioner of Income Tax [PCIT]/Principal Director of Income Tax [PDIT]. The learned ITAT had held that in terms of paragraph 1(vi) of the Instruction No. 5/2017 dated 07.07.2017 issued by the Central Board of Direct Taxes [CBDT], the return could not be picked up for scrutiny without the prior approval of the specified authority, that is, PCIT/PDIT/CIT/DIT. 2. It is the Revenue's....

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....mmunication issued clarifying that the return was selected for scrutiny on the basis of paragraph 1(vi) of Instruction No. 5/2017, being the guidelines for selection of cases for scrutiny during Financial Year 2017-18, issued by the CBDT. 7. However, he also submits that although a search was conducted in the Airwill Group of cases, the Assessee's return was picked up for scrutiny relying on paragraph 1(iii) of the said instructions. The relevant extract (instruction no. 5 of 2017) issued by the CBDT are set out below: - 1. In supersession of earlier instructions on the above subject, the Board hereby lays down the following procedure and criteria for compulsory manual selection of returns/cases requiring scrutiny during the fin....