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Facts
The assessee filed an appeal against the order of the National Faceless Appeal Centre (NFAC) which upheld an ex-parte assessment order passed under Section 147 read with Section 144 of the Income-tax Act, 1961. The assessee contended that the lower authorities failed to decide on crucial legal grounds regarding the validity of notices and jurisdiction.
Held
The Tribunal found that the CIT(A) had rightly set aside the assessment order for fresh adjudication but failed to address the assessee's grounds concerning the non-issuance of notice under Section 143(2) and the validity of the notice under Section 148. The assessee was granted liberty to raise these issues before the Assessing Officer.
Key Issues
Whether the CIT(A) erred in not adjudicating the legal grounds raised by the assessee regarding the non-issuance of notice under Section 143(2) and the validity of notice under Section 148 during the set-aside proceedings.
Sections Cited
250, 147, 144, 144B, 143(2), 148, 144A, 151A, 251(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNT MEMBER & SHRI ANIKESH BANERJEE
O R D E R Per Anikesh Banerjee (JM) :
The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi, [in short, ‘Ld. CIT(A)] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for Assessment Year 2015-16, date of order, 22/01/2025. The impugned order emanated from the order of the Assessment Unit, Income-tax Department (in short, ‘Ld.AO’) passed under section 147 read with section 144 read with section 144B of the Act, 1961, date of order 29/03/2023.
2 ITA 1264/Mum /2025 Mr. Sateesh Laxnab Huded 2. The assesse has taken the following grounds of appeal:-
1. On facts and circumstances of the case and in law Ld. CIT(A) erred in not deciding the additional grounds of appeal.
On facts and circumstances of the case and in law Ld CIT(A) erred in not deciding the grounds of appeal raised in appeal memo form no 35 and also additional ground of appeal which were raised during appellate proceedings. Such grounds areas under: (i)The additional grounds of appeal were: (a) The order passed us 147 rws 144 dated 29-03-2023 is bad in law as same is passed without issuing notice us 143(2) of the IT Act 1961. (b) The Ld AO erred in considering return filed on 28-02-2023 in response to notice us 148 as non-est return or treating such return, as if, same is not filed. (This ground of appeal related to Gr.no 3 of appeal memo which is redrafted as additional ground) (b) Ld AO erred in passing order us 144A(d) and issuing notice us 148 as same were issued by Jurisdictional AO in non faceless manner, as same were required to be issued mandatorily in faceless manner as provided in sec 151A of the IT Act 1961.
(ii) The following grounds of appeal were raised before Ld CIT(A) in appeal memo:
(a) Ld. AO erred in considering return filed on 28-02-2023 in response to notice us 148 as invalid returns. (Ground no 3 of appeal memo) (b) Ld. AO erred in passing order us 147 rws 144/1448 without Issuing/servicing show cause notice us 1448(1)(xii)(b) for proposed variation of declared income filed in response to notice us 148 as invalid return.”
We heard the rival submissions and considered the documents available on the record. The assessment was completed exparte under section 147 of the Act in pursuance to notice under section 148 of the Act. The assessee was unable to submit the relevant documents before the Ld.AO. The assesse filed appeal before the Ld.CIT(A) challenging the impugned assessment order. Considering the assessee’s submission, the Ld.CIT(A) setting aside the impugned assessment order before the Ld.AO for verification de novo. Being aggrieved, the assesse filed an 3 ITA 1264/Mum /2025 Mr. Sateesh Laxnab Huded appeal before us by challenging the order of the Ld.CIT(A) for non-considering the legal grounds raised by the assesse during the appeal proceedings.
The Ld.AR argued and stated that the legal issue related to non-issuance of notice under section 143(2) of the Act was not adjudicated by the Ld.CIT(A) during the appeal proceedings. The Ld.AR submitted that assesse has made detailed submission on 01/01/2025 online by challenging the issuance of notice under section 148 of the Act and assessee has also challenged the validity of impugned assessment which is passed under section 143(3) / 147 of the Act, without issuing notice under section 143(2) of the Act. But the said issue was not duly adjudicated by the Ld.CIT(A).
The Ld. DR submitted that the impugned assessment order was passed ex parte, and that the Ld. CIT(A), by exercising powers conferred through the amendment to Section 251(1)(a) of the Act, effective from 01.10.2024, was empowered to set aside an assessment order passed under Section 144 of the Act. He supported the orders passed by the revenue authorities.
In our considered view, the assessment in the present case was framed under Section 147 read with Section 144 of the Act. The Ld. CIT(A), in exercise of powers under the amended provisions of Section 251(1)(a) of the Act, has rightly set aside the assessment to the file of the Assessing Officer for fresh adjudication. However, we observe that the Ld. CIT(A) has not dealt with the legal grounds raised
by the assessee, challenging the jurisdiction of the Assessing Officer, particularly on the ground of non-issuance of notice under Section 143(2) and the validity of the 4. ITA 1264/Mum /2025 Mr. Sateesh Laxnab Huded notice issued under Section 148 of the Act. In our view, the assessee is at liberty to raise these jurisdictional and legal issues, as well as issues on merits, before the Assessing Officer during the set-aside proceedings. Further, we note that the Ld. CIT(A), in the impugned order, has not placed any restriction on the assessee from raising such legal contentions. Accordingly, we do not find any infirmity in the order passed by the Ld. CIT(A), and the same is hereby upheld. The assessee is granted liberty to raise all contentions, both legal and factual, before the Ld. AO in accordance with law.
In the result, the appeal filed by the assesse bearing