Is a Section 143(2) Notice Invalid If It Is Not in the CBDT Prescribed Format?

No. The ITAT Special Bench at Bengaluru, in MD Sons v. ITO (ITA No. 1413/Bang/2025, pronounced 13 July 2026), has held that a notice under Section 143(2) which does not follow the format prescribed by CBDT Instruction dated 23.06.2017 is a defect of form, curable under Section 292B. The consequent assessment remains valid. Six earlier Tribunal rulings to the contrary stand displaced.

The case at a glance

Case	MD Sons v. Income Tax Officer, Circle-5(2)(1), Bengaluru
Citation	ITA No. 1413/Bang/2025
Forum	ITAT Special Bench, Bengaluru
Bench	Justice (Retd.) C.V. Bhadang, President; George George K, Vice President; Ms. S. Padmavathy, Accountant Member
Assessment year	2017-18
Pronounced	13 July 2026
Sections	143(2), 143(3), 119, 292B, 292BB
Outcome	Question answered in the negative, in favour of the Revenue

Why a Special Bench was constituted

MD Sons is a partnership firm trading in cigarettes and food items. For AY 2017-18 it filed a return on 04.11.2017 declaring a loss of Rs. 2,30,72,700. The case was picked up through Computer Aided Selection of Scrutiny (CASS), and notice under Section 143(2) was issued on 21.09.2018 and served by email. The assessment was completed on 28.12.2019 under Section 143(3), assessing income at Rs. 3,48,75,050.

The firm appealed, got partial relief from the CIT(A), and then raised an additional ground before the Tribunal — that the Section 143(2) notice did not follow the format prescribed by CBDT Instruction F.No.225/157/2017/ITA-II dated 23.06.2017, and that everything flowing from it was therefore bad in law.

The difficulty was that coordinate benches had gone both ways. The Bangalore Bench referred the conflict on 08.10.2025, and the Hon'ble President constituted a Special Bench on 10.11.2025 to answer a single question:

Whether notices issued under Section 143(2) of the Income Tax Act, 1961 on or after 23rd June 2017 which are not in the prescribed format as per CBDT Instruction F.No.225/157/2017/ITA-II, despite the provisions of Section 292B, render the consequent assessment orders invalid?

The conflict on the board

Six decisions had annulled assessments on this ground, all tracing back to a single Kolkata ruling the Department chose not to appeal:

Decision	ITA No.	Date
Srimanta Kumar Shit v. ACIT	1911/Kol/2024	19.11.2024
Tapas Kumar Das v. ITO	1660/Kol/2024	11.03.2025
Sajal Biswas v. ITO	1244/Kol/2023	26.03.2025
Hind Ceramics Pvt. Ltd. v. DCIT	608 & 610/Kol/2024	06.05.2025
Anita Garg v. ITO	4053/Del/2024	30.07.2025
Allied Concepts India Pvt. Ltd. v. ITO	2407/Del/2025	26.09.2025

Running the other way was Veeranna Murthy Raghavendra Dikshit (ITA No. 1072/Bang/2024, 19.08.2024), which had held that a notice satisfying the substance of Section 143(2) is saved by Section 292B even if its format differs.

The Special Bench made a pointed observation about this line of authority: none of the six had noticed Dikshit, and none of them had actually examined whether the defect was curable under Section 292B at all.

What the assessee argued

The case for invalidity rested on three planks.

First, that CBDT Instruction dated 23.06.2017 was issued under Section 119 and prescribed three exclusive formats — Limited Scrutiny (CASS), Complete Scrutiny (CASS), and Compulsory Manual Scrutiny — using the words "shall" and "only". Instructions under Section 119 bind income-tax authorities, as held in UCO Bank v. CIT and UOI v. Azadi Bachao Andolan (2003) 263 ITR 706 (SC).

Second, that the requirement was not cosmetic. In a Limited Scrutiny case the Assessing Officer is confined to the flagged issues and cannot expand without recorded reasons and PCIT approval. Withholding the category from the notice conceals the jurisdictional limits from the assessee and leaves the door open to roving enquiry.

Third, that Section 292B cures mistakes in the exercise of jurisdiction, not in its assumption. A defect that changes the scope or tenor of a notice is not a defect of form.

The interveners added an analogy from penalty jurisprudence — Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Kar) and the Full Bench in Mohd. Farhan A. Shaikh (2021) 434 ITR 1 (Bom) — arguing that if a Section 274 notice must specify its limb, a jurisdictional notice under Section 143(2) must specify its category.

What the Revenue argued

The Revenue's position was that neither the Act nor the Rules prescribe any format for a Section 143(2) notice. Formats are finalised by DGIT (Systems) in consultation with CBDT and deployed in the ITBA system; the Assessing Officer has no role in them and cannot alter them. The expressions "Limited Scrutiny" and "Complete Scrutiny" appear nowhere in the statute.

The Revenue placed heavy reliance on the Delhi High Court in Bharat Bansal v. NFAC (W.P.(C) 2238/2026, dated 17.02.2026), where the Court held that an Assessing Officer is not required to state why a case was selected, that the CBDT circulars on scrutiny selection are "totally an inter-Departmental matter", and that the first notice under Section 143(2) is only an intimation of selection — with specific information to be sought later through notices under Section 142(1).

The ratio

The Special Bench answered the question in the negative. Its reasoning runs along four lines.

An administrative instruction cannot create a jurisdictional condition. Section 143(2) requires a notice, issued within limitation, calling on the assessee to attend and produce evidence in support of the return. Applying expressio unius est exclusio alterius, the Bench held that where the legislature has enumerated the requirements of a valid notice, further conditions cannot be read in. Had Parliament intended disclosure of the scrutiny category to be a condition precedent, it would have said so.

Binding force and consequence of breach are different questions. The Bench accepted that instructions under Section 119 bind departmental officers. But it held that it does not follow that every departure nullifies proceedings otherwise validly initiated. Invalidation follows only where the instruction supplements a statutory requirement, or where the breach affects a condition the Act itself prescribes for assumption of jurisdiction.

The defect is one of form, and Section 292B exists for exactly that. The notice informed the assessee that the return had been selected for scrutiny, issued from the competent authority, within time, naming the right assessee, for the right year. The statutory purpose was fully achieved. In the Bench's words, accepting the contrary argument "would lead to the anomalous result that a procedural format prescribed by executive instruction would acquire a higher status than the statute itself."

The precedents relied on were about a different problem. Hotel Blue Moon (2010) 321 ITR 362 (SC) and Laxman Das Khandelwal (2019) 417 ITR 325 (SC) concerned the total absence of a Section 143(2) notice. Maruti Suzuki (2019) 416 ITR 613 (SC) concerned an assessment on an amalgamating company that had ceased to exist. Weilburger Coatings 463 ITR 89 (Cal) was not about the notice at all, but about an addition made on an issue outside the scope of enquiry. In the present case there was no dispute about issuance, service, limitation, identity, or authority — only about form.

Which defects in a Section 143(2) notice are fatal, and which are cured

Defect in the notice	Effect on the assessment	Anchor
No notice issued at all	Void — not curable	Hotel Blue Moon (SC)
Notice issued beyond limitation	Void — not curable	Proviso to s.143(2)
Notice on a non-existent entity	Void — not curable	Maruti Suzuki (SC)
Defect in service of the notice	Cured on participation	s.292BB
Notice not in the CBDT 2017 format	Cured — form, not substance	MD Sons (SB), 13.07.2026
AO travels beyond limited scrutiny	Addition without jurisdiction	Weilburger Coatings (Cal)

What this means in practice

The format ground, taken on its own, is now closed. But the ruling is narrower than a plain reading of the operative paragraph suggests, and three points survive.

Paragraph 12.2 keeps the outcome fact-specific. The Bench expressly held that the question turns on the facts of each case — including the manner in which the assessee participated, whether that participation indicates awareness of the issues proposed to be examined, and prejudice, which the assessee must demonstrate and substantiate. That is a test, not a closed door. The argument has moved from the shape of the notice to what the undisclosed category actually cost the assessee.

Enquiry beyond the flagged issues remains a live ground. Weilburger Coatings is untouched. Where an Assessing Officer in a Limited Scrutiny case has travelled to issues outside the CASS flags without recorded reasons and PCIT approval, the addition is made without jurisdiction. That is a stronger ground than the format point ever was, and it attacks the addition rather than the assessment.

Object on record, and object early. Every appellant before the Special Bench had participated fully and raised nothing before the Assessing Officer. The Bench returned to that silence repeatedly. A contemporaneous, written objection during the assessment is now the practical price of preserving any argument in this family.

One further point on the reach of the decision. The Special Bench held itself bound by Bharat Bansal in the absence of a ruling from the jurisdictional High Court, and on that footing declined to apply the "two views, favour the assessee" principle. That binding force is contingent. Where a jurisdictional High Court has spoken, or when one does, the position is open to revisit.

Frequently asked questions

Does a Section 143(2) notice have to state whether the scrutiny is limited or complete?

Not as a matter of statutory validity. The Special Bench in MD Sons held that the expressions "Limited Scrutiny", "Complete Scrutiny" and "Manual Scrutiny" appear nowhere in Section 143(2) and are administrative classifications. Omitting the category does not invalidate the notice.

Is CBDT Instruction dated 23.06.2017 binding on Assessing Officers?

Yes, in the sense that it binds them administratively. The Special Bench accepted that instructions under Section 119 bind departmental authorities and that non-adherence may attract administrative consequences. What it rejected was the further step — that breach automatically nullifies an assessment.

What does Section 292B actually cure?

Section 292B saves a return, assessment, notice, summons or proceeding from being invalid by reason of a mistake, defect or omission, provided it is in substance and effect in conformity with the intent and purpose of the Act. The Special Bench drew the line between jurisdiction never assumed (not curable) and jurisdiction properly assumed but flawed in form (curable). A format deviation falls in the second category.

What happened to the earlier rulings that quashed assessments on this ground?

Srimanta Kumar Shit, Tapas Kumar Das, Sajal Biswas, Hind Ceramics, Anita Garg and Allied Concepts India no longer represent good law on this point. The Special Bench recorded that none of them had considered the contrary Bangalore decision in Dikshit, and none had examined the Section 292B question.

Can the format argument still be raised at all?

Only with something more. Paragraph 12.2 makes the outcome depend on demonstrated prejudice and on the assessee's awareness of the issues under examination. A bare format objection will not succeed; a documented case that the undisclosed category enabled enquiry that limited scrutiny would have barred is a different matter.

Does this affect additions made beyond the scope of limited scrutiny?

No. That ground rests on a different footing and survives intact. Where the Assessing Officer has examined issues outside the CASS flags without following the prescribed conversion procedure, the resulting addition is open to challenge as having been made without jurisdiction.

About the author

CA Sunil Maloo is the Founder of Sunil Maloo & Co., Chartered Accountants, a boutique direct tax litigation and advisory practice with offices in Ahmedabad. His practice covers search and seizure assessments, faceless assessments and appeals, ITAT litigation, and corporate and NRI tax advisory.

This article is a summary of a judicial decision for general information. It is not legal or tax advice, and no client relationship arises from reading it. Please take advice on your own facts.