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2014 (4) TMI 244 - CALCUTTA HIGH COURTValidity of notice u/s 143(2) of the Act - scrutiny assessment - whether circular providing issuance of notice within 3 months is binding upon revenue - Notice for scrutiny even after the expiry of the period of three months from the date of filing of the return but withing the period prescribed u/s 143(2) – revenue submitted that the circulars are not meant for the purpose of permitting the unscrupulous assessees from evading tax. - Held that:- Even assuming that the intention of the CBDT was to restrict the time for selection of the cases for scrutiny within a period of three months, it cannot be said that the selection 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 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 - In case, it does that, the act of the Department is bound to be struck down under article 14 of the Constitution - it is not necessary to decide whether the intention of the CBDT was to restrict the period of issuance of notice from the date of filing the return laid down u/s 143(2) of the Act – Decided in favour of Assessee.
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