A notice issued under Section 143(2) of the Income Tax Act, which fails to specify the nature of the scrutiny (limited or complete) as mandated by the CBDT circular (Instruction F.No.225/157/2017/ITA-II), is invalid and renders the subsequent assessment order void ab initio.

आदेश/ORDER

This appeal by the Assessee is directed against the Order dated 08.10.2025 of the learned Addl./JCIT(A)-1, Nashik, for the assessment year 2017-2018.

2. The assessee has raised the following grounds of appeal:

1. “The learned Assessing Officer ("AO") erred in law in assuming jurisdiction to frame the assessment u/s 143(3), as the scrutiny notice dated 14.08.2018 was not issued in the mandatory revised formats prescribed by CBDT Instruction F.No.225/ 157/2017/ITA-II dated 23.06.2017, and failed to specify whether the case was selected for Limited, Complete or Manual Scrutiny. The notice being invalid, the consequential assessment is void ab initio and liable to be quashed.

2. The Ld. AO acted contrary to binding CBDT instructions u/s 119, which mandatorily require issuance of scrutiny notices only in the revised formats. The defect being jurisdictional goes to the root of the assessment and is not curable.

3. This ground, though not raised before Ld. AO and CIT(A), is a pure question of law fully arising from the assessment record and is, therefore, admissible under NTPC v. CIT (229 ITR 383) and the principle affirmed in Anita Garg v. ITO, ITA 4053/Del/ 2024.

4. That both the Ld. AO and Ld. CIT(A) erred in rejecting the books of account without identifying specific defects and in estimating income at 3% of cost of goods put to sale, resulting in an unwarranted addition of ₹.8,27,378. The estimation is arbitrary, excessive, and not supported by comparable cases or cogent material.

5. That both the Ld. AO and Ld. CIT(A) erred in making addition of ₹.9,54,000 u/s 69A, even though: the entire SBN cash of ₹.31,54,000 was recorded in the cash book, the AO accepted closing cash balance of ₹34,90,297 as on 08.11.2016, deposits were made in stages only because banks refused large deposits in go. Deposits made in tranches due to banking constraints cannot be treated as unexplained. The addition is contrary to facts and law.

6. Without prejudice, once Ld. AO having rejected the books of account for estimating income, the AO could not legally rely on the same books to conclude that deposits of ₹9,54,000 were "unexplained." And the Ld. CIT(A) erred in ignoring facts placed before him. It is settled law that estimation of profits and specific additions based on the rejected books cannot co-exist.

7. That the AO erred in treating staggered deposits as suspicious, ignoring that RBI permitted deposits until 30.12.2016 and no evidence was brought to contradict the appellant's explanation. That both the Ld. AO and Ld. CIT(A) erred in not considering the appellant's detailed submissions, bank statements, cash book, and cash-flow analysis, rendering the findings perverse and unsustainable.

8. Without prejudice, even if estimation is upheld, no separate addition u/s 69A is legally permissible, as the estimation subsumes all alleged discrepancies.

9. That the appellant craves leave to add, alter, modify, or withdraw any of the above grounds at the time of hearing in the interest of justice.”

3. Ground nos.1 to 3 are regarding validity of the notice issued by the Assessing Officer u/sec.143(2) of the Income Tax Act [in short "the Act"], 1961 and consequently, the assessment order passed by the Assessing Officer.

4. The learned Authorised Representative of the Assessee has submitted that this issue raised by the assessee in ground nos.1 to 3 is purely legal in nature and does not require any investigation or verification of any new facts or material. Therefore, he has submitted that these grounds raised by the assessee for the first time before the Tribunal may be admitted for adjudication. In support of his contention, he has relied upon the Order of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT [1998] 229 ITR 383 (SC).

5. On the other hand, the learned DR has objected to the admission of the additional grounds raised by the assessee.

6. I have considered the rival submissions as well as the relevant mater