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TMI Blog2014 (4) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... ction in the case was made within the period - the return was filed on October 29, 2004, and the case was selected for scrutiny on July 6, 2005 - By any process of reasoning, it was not open for the Tribunal to come to a finding that the Department acted within the four corners of Circulars Nos. 9 and 10 issued by the Central Board of Direct Taxes - The circulars were evidently violated - The circulars are binding upon the Department u/s 119 of the Income-tax Act. It cannot be said that the Department, which is the State, can be permitted to selectively apply the standards set by themselves for their own conduct. If this type of deviation is permitted, the consequences will be that floodgate of corruption will be opened which it is not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein 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. But, in the present case, the learned Tribunal took the view as follows : The hon'ble Tribunal in the case of Sunita Finlease (supra) 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 ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ict the time for issuance of a notice. She has produced official records to show that the case was selected for scrutiny on July 6, 2005. She has also given inspection of the aforesaid notes in the file to Mr. Bharadwaj. Mr. Bharadwaj, learned advocate appearing for the assessee, submitted that even assuming that the Central Board of Direct Taxes has prescribed a time limit for selection of cases for scrutiny, the admitted case of the Department is that the case was not even selected for scrutiny within a period of three months. Therefore, the applicability of the circular cannot be wished away. He added that the views taken by the learned Tribunal in the cases of Sunita Finlease Ltd. v. Deputy CIT and Subhasish Roy v. ITO were binding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxes. The circulars were evidently violated. The circulars are binding upon the Department under section 119 of the Income-tax Act. Mrs. Gutgutia, learned advocate submitted that the circulars are not meant for the purpose of permitting the unscrupulous assessees from evading tax. Even assuming, that to be so, it cannot be said that the Department, which is the State, can be permitted to selectively apply the standards set by themselves for their own conduct. If this type of deviation is permitted, the consequences will be that floodgate of corruption will be opened which it is not desirable to encourage. When the Department has set down a standard for itself, the Department is bound by that standard and cannot act with discrimination. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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