DNH SPINNERS PRIVATE LIMITED,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), MUMBAI

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ITA 2624/MUM/2025Status: DisposedITAT Mumbai24 June 2025AY 2008-0911 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had set aside the assessment order and restored it to the AO for de novo assessment. The Tribunal found no infirmity in the CIT(A)'s appellate order. It observed that the CIT(A)'s authority to set aside an assessment order passed under Section 144 is now empowered by the proviso to Section 251(1)(a) of the Act, effective from 01.10.2024, as per the Finance (No.2) Act, 2024. Given that all issues raised in the appeal were already restored to the AO for fresh consideration, and the assessee was allowed liberty to furnish relevant details, the Tribunal concluded that the appeal filed by the assessee was frivolous and infructuous. The operative direction was to dismiss the appeal as infructuous.

What were the facts?

The assessee, DNH Spinners Private Limited, is appealing an order dated 18.02.2025 passed by the CIT(A) concerning assessment year 2008-09. The original assessment order, passed under Section 144 of the Income-tax Act, 1961, dated 30.03.2016, determined the total income at Rs.1,26,69,610/- after additions including speculation loss of Rs.75,27,882/- and excessive deduction under Section 80IB of Rs.3,19,226/-. The assessee's original return declared a total income of Rs.45,44,890/-, and a scrutiny assessment under Section 143(3) had previously determined the income at Rs.48,22,502/-. The CIT(A) had set aside the entire case to the Assessing Officer (AO) for a fresh assessment.

What were the issues?

1. Whether the assessment order passed under Section 144 read with Section 147 of the Income-tax Act, 1961, is invalid, without jurisdiction, bad in law, and in violation of principles of natural justice, as argued by the assessee. 2. Whether the CIT(A) erred in holding that the conversion of the erstwhile firm into a private limited company was not communicated to the AO, despite documentary evidence, as contended by the assessee. 3. Whether the CIT(A) erred in not applying the provisions of Section 170(2) of the Act and quashing the reassessment order, as argued by the assessee. Assessee's Contentions: The assessment order was made without jurisdiction. Two assessment orders for AY 2008-09 were passed in March 2016 by different AOs. The assessee had complied with ACIT, Circle 18(1)(4) until 08.03.2016. The assessee was unaware of a change in jurisdictional officer to ACIT, Circle 30(1), Mumbai. A letter dated 24.11.2015 informed ACIT, Circle 18(1)(4) about the conversion of the firm into a private limited company on 15.09.2010. The assessment order dated 30.03.2016 was passed in the name of a non-existent firm. The CIT(A) erred in stating the conversion was not informed to ACIT, Circle 30(1) and erred in stating a bar on raising jurisdictional issues beyond one month under Section 124(3). Revenue's Contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 170(2),Section 124(3),Section 148,Section 143(2),Section 142(1),Section 251(1)(a),Section 153(3)

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Before: SHRI PAWAN SINGH & SHRI PRABHASH SHANKAR

For Appellant: Shri Rushabh Mehta, CA
For Respondent: Shri Annavaram Kosuri, (Sr. AR)
Hearing: 17.06.2025Pronounced: 24.06.2025

आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : अपीलार्थी / The Appellant 1. 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai

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