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Facts
The assessee, a private limited company, filed its return of income. The case was reopened, and an assessment order was passed. The CIT(A) set aside the assessment order and remanded it to the AO, opining that the assessment order was a best judgment order.
Held
The Tribunal held that the CIT(A) erred in setting aside the assessment order as it was not a best judgment order. However, considering the additional evidence submitted, the Tribunal remitted the appeal back to the AO for a detailed de-novo assessment.
Key Issues
Whether the CIT(A) was correct in setting aside the assessment order and remanding it to the AO, and whether the assessment order was a best judgment order.
Sections Cited
139(1), 148A, 148, 144, 147, 144B, 68, 251(1), 143(2)
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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL
Per: Smt. Beena Pillai, J.M.: The Present appeal filed by the revenue arises out of the order dated 29/11/2024 by NFAC, Delhi, for assessment year 2018-19 on following grounds of appeal:
1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in setting aside the assessment order to the AO for making fresh assessment de-novo invoking the powers u/s. A.Y. 2018-19 Pratham Internatonal Pvt Ltd 251(1) of the Act stating that the assessment order has been issued u/s. 144/147 of the Income Tax Act, when in fact the assessment order was passed u/s. 147 r.w.s 144B of the Act."
2. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the assessee has filed ROI in response to notice u/s. 148, notice u/s. 143(2) was issued by the AO and the assessee has duly submitted response to every notice/letter/show cause notice issued by the AO during the course of assessment proceedings, hence the provisions of section 251(1) of the Act are not applicable in the case of the assessee."
3. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has failed to point out any additional evidence filed before him/her requiring the sending back the matter to the Assessing Officer."
4. "The appellant craves the leave to add, amend, alter and/ or delete any of the grounds of appeal as above."”
Brief facts of the case are as under:
The assessee is a private limited company filed its return of income u/s.139(1) of the Act on 29.10.2018 declaring total income at Rs.3,42,390/-. The assessee is in the business of trading in imported construction items and trading in agriculture product. For the year under consideration, the only income of the assessee was income under the head ‘Profit and Gains from Business and Profession’. The assessee was issued show cause notice u/s.148A(b) of the Act was. Thereafter, order u/s.148A(d) of the Act was passed on 31.03.2022 and the case of the assessee was reopened vide notice u/s.148 of the Act dated 31.03.2022. In response to the said notice, the assessee filed its return of income A.Y. 2018-19 Pratham Internatonal Pvt Ltd on 18.08.2022 declaring total income at Rs.3,42,390/- Assessee was called upon to furnish various details. The representatives of the assessee furnished all requisite details as called for. 2.1 Subsequently, assessment order u/s.144 r.w.s. 147 r.w.s. 144B of the Act was passed on 14.03.2023 determining total income at Rs.53,42,390/- thereby making addition of Rs.50,00,000/- being addition u/s.68. Aggrieved by the order of the Ld.AO the assessee preferred appeal before the Ld.CIT(A).
The Ld.CIT(A), was of the opinion that, the assessment order passed is under best judgment and thus remanded the appeal to the Ld.AO relying on the amendment introduced by Finance Act (No.2), 2024, with effect from 1/10/2024. Aggrieved by the order of the Ld.CIT(A), the revenue is in appal before this Tribunal.
The Ld.DR submitted that, the order was not passed under section 144 and it was a typographic error. He submitted that the section has to be read as 144B of the Act. He submitted that the Ld.CIT(A) did not have power to remand to the Ld.AO , unless the assessment order passes is under best judgment order u/s.144. 4.1 On the contrary, the Ld.AR submitted that, the appeal may be remanded to the Ld.AO for considering the issue in the light of evidences available with assessee. We have perused the submissions advanced by both sides in light of records placed before us.
The Ld.CIT(A) in the impugned order recorded that the assessment order is passed without considering the details submitted during the course of assessment. The assessee A.Y. 2018-19 Pratham Internatonal Pvt Ltd submitted evidences i.e. copy of ITR filed on 29.10.2018, computation of income, Tax audit report, Annual Financial Statement, copy of ITR filed on 18.08.2022 in response to notice u/s.148 of the IT Act, copy of sales invoice and copy of bank statement and requested for admission of these additional evidences furnished during the appellate proceedings which were not produced before the A.O. It is observed that the issues need thorough examination and verification by Ld. Ld.AO having regard to these evidences. 5.1 We accordingly remit this appeal back to the Ld.AO with a direction to pass detailed order on merit based on the evidences filed by the assessee. The assessee is also directed to furnish all details called for by the Ld.AO. Needless to say that proper opportunity of being heard must be granted to the assessee in accordance with law. Accordingly grounds raised by the revenue stands partly allowed for statistical purposes. In the result, appeal filed by the revenue stands allowed partly for statistical purposes. Order pronounced in the open court on 07/03/2025