IMPORTANCE OF SCRUTINY NOTICES IN APPROPRIATE FORMAT
Tax Professionals are aware that 1.65 lakh scrutiny notices have been issued u/s 143(2) of The Income Tax Act, for AY 2024-25 & the scrutiny proceedings will take their own course after notices u/s 142(1) with detailed questionnaire is issued.
It will be worth to recollect here that CBDT way back in 2017 had issued one important instruction, i.e. Letter F. No. 225/157/2017/ITA.II dt 23.06.2017 & this letter is titled “Issue of notices under section 143(2) in revised format” Upon going through this communication, we find that the CBDT through this letter has spelt out three different formats –
Limited Scrutiny (Computer Aided Scrutiny Selection)
Complete Scrutiny (Computer Aided Scrutiny Selection)
Compulsory Manual Scrutiny
It is also worthwhile to note important facts that these formats spelt out clearly mention the intention of the law behind selection of a particular case in the header of the notice itself, as indicated above.
The CBDT as we know is empowered to issue instructions to subordinate authorities for the purpose of administration u/s 119(2), & clause (a) of the said section specifically makes a mention of section 143.
Hon’ble Apex court in case of UCO Bank vs CIT (1999) 237 ITR 889 (SC) held that circulars & instructions issued by CBDT u/s 119 of the Act are binding on Revenue Authorities. Therefore strict adherence to them need not be overemphasized
On the backdrop of this understanding of the legal framework that has been put in place by the lawmakers, when one looks at the recent trend of notices issued u/s 143(2), for the purpose of scrutiny in past few years including the notices being issued during this past month, one can see that these notices have clearly bypassed the requirements spelled out in the above cited instruction, as these notices simply put do not make any mention whether the particular case is covered under “Limited Scrutiny” or “Complete Scrutiny” or “Compulsory Manual Scrutiny”
Hon’ble Kolkata Tribunal had an occasion to deal with this particular issue in following cases –
i. Shib Nath Ghosh – ITA no 1812/KOL/2024 &
ii. Tapas Kumar Das – ITA no 1660/KOL/2024
It will be worthwhile to note that in both these cases Hon’ble Kolkata Tribunal held these notices issued u/s 143(2) as well as consequential assessments framed to be invalid , without going into other details of the cases
Therefore in my humble view it will be worthwhile to ponder over the notices issued recently to check whether they comply with the instructions spelt out for the same.
