- (1.) This appeal is directed against the judgment and order dated July 30, 2010, passed by the learned Income-tax Appellate Tribunal upholding the contention of the Revenue that the Assessing Officer was competent to issue notice under section 143(2) of the Income-tax Act, 1961 for scrutiny even after the expiry of the period of three months from the date of filing of the return. The admitted fact is that the Central Board of Direct Taxes issued Circulars Nos. 9 and 10, i.e., for corporate assessee and for non-corporate assessee, respectively. The relevant provision appearing from Circular No. 10 reads as follows: The process of selection of cases for scrutiny of returns filed up to March 31, 2004, must be completed by October 15, 2004. For returns filed during the current financial year 2004-2005, the selection of cases for scrutiny will have to he completed within three months of the date of filing of the return. In this case, the return was filed by the assessee on October 29, 2004, and the notice under section 143(2) of the Income-tax Act was issued on July 14, 2005. Evidently, the notice was not issued within a period of three months. The contention of the Revenue was that such a notice under section 143(2) of the Income-tax Act could have been issued within 12 months from the date of filing of the return and, therefore, the notice was well within time. The assessee contended that the time for the purpose of issuance of such a notice has been restricted by three months by Circular No. 10 issued by the Central Board of Direct Taxes which is binding on the income-tax authorities under section 119 of the Income-tax Act and, therefore, they could not have deviated therefrom. The learned Income-tax Appellate Tribunal in the case of Sunita Finlease Ltd. v. Deputy CIT, 2008 8 DTR (A.T.) 183 (Bilaspur) held that, "the selection of scrutiny of case has been done in violation of the Central Board of Direct Taxes Instruction No. 9 of 2004, dated September 20, 2004. It further held that the Central Board of Direct Taxes instructions are binding on the Revenue authorities and, therefore, the selection of the scrutiny of the case has not been done in accordance with the Board's instructions. The Tribunal also held that the Assessing Officer erred in assuming the jurisdiction under section 143(2) in contravention of the Central Board of Direct Taxes instructions and in completing the assessment order under section 144 which is bad in law and that the Commissioner of Income-tax (Appeals) erred in confirming the order of the Assessing Officer".
(2.) The self-same Bench of the Income-tax Appellate Tribunal in its judgment and order dated January 23, 2009, in the case of Subhasish Roy v. ITO followed the judgment in the case of Sunita Finlease Ltd. v. Deputy CIT and held as follows: After hearing the rival submissions and on careful perusal of the materials available on record and keeping in view of the decision of the co-ordinate Bench in the case of Sunita Finlease Ltd. v. Deputy CIT, 2008 8 DTR (A.T.) 183 (Bilaspur) dated February 15, 2008, wherein it was held that scrutiny of the case having been done in violation of the Central Board of Direct Taxes Instruction No. 9 of 2004, dated September 20, 2004, the Assessing Officer erred in assuming the jurisdiction and completing the assessment. Therefore, respectfully following the same, we set aside the orders of the Assessing Officer on this issue itself.
(3.) But, in the present case, the learned Tribunal took the view as follows: The hon'ble Tribunal in the case of Sunita Finlease has equated the expression 'selection of the cases for scrutiny with issue of notice under section 143(2)'. We are unable to accept this view for the reasons elaborated hereinabove. Thus, we hold that the impugned instruction did not take away the jurisdiction of the Assessing Officer to issue notice under section 143(2) of the Act as per the proviso to the said section. Jurisdiction to scrutinise the case was rightly invoked by the Assessing Officer. We, therefore, set aside the order of the learned Commissioner of Income-tax (Appeals) on this issue and hold that assessment was a valid one.;