TaxTMI 
TaxTMI 
2025 (7) TMI 1374
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....h Computer Assisted Scrutiny Selection (CASS) to verify the transactions of assessee with another company whose registration had been cancelled by the Ministry of corporate Affairs. The Scrutiny assessment was completed u/s 143(3) read with section 144B of the Act on 23.12.2022 by NFAC, assessing the total income of Rs. 8,60,49,114/-. Thereafter, the ld. PCIT issued show cause notice u/s 263 of the Act on 25.09.2024 on the ground of that order passed u/s 143(3) of the Act is erroneous and prejudicial to the interest of the Revenue for the reason that the ld. AO has not considered the disallowance of Rs. 10,38,102/- in respect of interest charges under the head of other expenses which was paid on bogus and unexplained unsecured loans amounting to Rs. 2,09,00,000/-, which were already added u/s 68 of the Act in the impugned assessment order and accordingly, directed the ld. AO to modify the assessment by making the addition of Rs. 10,38,102/-, after affording reasonable opportunity of hearing to the assessee. 04. The ld. AR vehemently submitted before us that in the original assessment preceding notice u/s 143(2) dated 28.06.2022 was issued, which is not in conformity with the C.B....
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....r Aided Scrutiny Selection) and (iii) Compulsory Manual Scrutiny. Since, the notice has been issued in an invalid format which is obviously invalid and therefore, any assessment based on the said notice is also invalid and bad in law. We note that the assessee has not challenged the assessment proceedings on this issue before any higher appellate forum, however, the assessee is within its legitimate and legal right to challenge the validity of the assessment in the collateral proceedings meaning thereby even during the appeal proceedings before the Tribunal against the revisionary order passed u/s 263 of the Act by the ld. PCIT, the validity of the assessment passed u/s 143(3) could be challenged. Therefore, we hold that the assessment passed u/s 143(3) is invalid and nullity in the eyes of law. Further, we also hold that the revisionary proceedings based upon an invalid order is also invalid and bad in law. The case of the assessee find support from the decision of this Tribunal in case of Nadia District Central Co-operative Bank Ltd. Vs. PCIT (supra), wherein the co-ordinate Bench has held as under: - "After hearing the rival contentions and perusing the materials availa....
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....he IT BA module in this regard. The above may be brought to the notice of all for necessary compliance. Enclosures(s): as above Sd/- (Rohit Garg) Director-ITA.II," After hearing the rival contentions and perusing the materials available on record including the above instruction, we find that the post 23.06.2017, the notice u/s 143(2) of the Act was required to be issued in any of the three formats mentioned in the said instructions above. We further note that in para 3 of the said instruction it is stated that all notice u/s 143(2) of the Act shall henceforth be issued in this revised format only. Therefore, we find merit in the contentions of the ld. AR that the notice dated 22.02.2019, issued u/s 143(2) of the Act is not conforming to the formats of notices as prescribed in the above said instruction. For the sake of ready reference the said notice is also extracted below: - Therefore considering the defect in the issuance of notice, we are of the considered view that the assessment framed on the basis of said notice is invalid and so is the revisionary proceeding based on the said assessment framed. The case of the a....
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....en decided in favour of the assessee and against the revenue. The Hon'ble High Court concurred with the ITAT that due procedure was not followed while converting limited scrutiny case to a full scrutiny. 14. Similarly, the order of the ITAT, Visakhapatnam Bench in the case of Vudatha Vani Rao -vs.- Income Tax Officer reported in [2024] 159 taxmann.com 1394 (Visakhapatnam) was relied upon by the ld. Counsel for the assessee. This 'SMC' order of the ITAT is also in the line of Hon'ble High Court's decision. The ld. Assessing Officer has not made any addition of cash deposit during demonetization period. The assessee has deposited small amounts, which have been accepted by the ld. Assessing Officer. Therefore, the assessment order itself is not sustainable because it has been passed by the ld. Assessing Officer by exceeding his limited powers. The ld. Assessing Officer ought to have followed the procedure contemplated in CBDT Instruction bearing No. 5 of 2016 for converting a limited scrutiny assessment into a full scrutiny. Accordingly, we quash the assessment order. Since we have quashed the assessment order, therefore, we do not deem it necessary to adjudicate the....
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.... income, provided the Income-tax Officer is satisfied that recovery is practically improbable. Twenty-six years later, on June 20, 1978, in view of the judgment of the Kerala High Court In STATE BANK OF TRAVANCORE v. CIT [1977] 110 ITR 336, the Board by another circular, withdrew with immediate effect the earlier circular. However, by circular dated October 9, 1984, the Board decided that Interest in respect of doubtful debts credited to suspense account by banking companies would be subjected to tax but Interest charged in an account where there has been no recovery for three consecutive accounting years would not be subjected to tax in the fourth year and onwards. The circular also stated that if there is any recovery in the fourth year or later, the actual amount recovered only would be subjected to tax in the respective years. This procedure would apply to assessment year 1979-80 and onwards." Similarly, Hon'ble Calcutta High Court in case of Amal Kumar Ghosh (supra), held as under:- "Held, allowing the appeal, (1) 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 ....
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....ेवा में/ TO, JA232255501IN NADIA DISTRICT CENTRAL CO OPERATIVE BANK LIMITED M M GHOSH STREET SAMABAY BUILDING KRISHNAGAR KRISHNAGAR NADIA 741101 .West Bengal India सà¥à¤¥à¤¾à¤¦à¥‹à¤‚ नेथा संखà¥à¤¯à¤¾/ PAN: 2k tou / Notice No .: ITBA/AST/S/143(2)/2019- 20/1018203929(1) Ratw/ Dated: 22/09/2019 AAALNO139M 2018-19 आयकर नियम 1962 केनियम 12 के केसाथ पठित मायकर अधिनियम 1961 की धारा 143 (2) के अधीन नोटिस Notice under section 143/2) of the Income tax Act. 1961 read with Rule 12 E of Income Tax Rules. 1962 संवीकà¥à¤·à¤¾ (जांच) (कंपà¥à¤¯à¥‚टर आधारित संवीकà¥à¤·à¤¾ चयन) Scrutiny (Computer Aided Scr....