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Facts
The AO completed assessment under Section 147 r.w.s. 144, treating cash deposits as unexplained and initially calculating tax at slab rates. Subsequently, the AO passed an order under Section 154 r.w.s. 147 to levy tax at 60% under Section 115BBE due to a short levy. The assessee's appeal against this 154 order was dismissed by the CIT(A).
Held
The Tribunal held that the original assessment order under Section 147 r.w.s. 144 was set aside by the NFAC to the Assessing Officer for re-examination. Consequently, the subsequent order under Section 154 r.w.s. 147 also ceased to survive and the appeal against it became infructuous.
Key Issues
Maintainability of appeal against a Section 154 order when the original assessment order has been set aside, and whether procedural irregularities in providing a hearing occurred at lower appellate levels.
Sections Cited
147, 144, 154, 115BBE, 249(4)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order dated 21.12.2025 passed by Addl/JCIT(Appeal), Ranchi [hereinafter referred to as ‘Addl. CIT(A)’] for the Assessment Year (A.Y.) 2018-19 in the proceeding u/s. 154 r.w.s. 147 of the Income Tax Act.
The brief facts of the case are that the assessment in this case for A.Y. 2018-19 was completed u/s. 147 r.w.s. 144 of the Act on 23.03.2023 at total income of Rs.13,00,78,760/-. In the course of assessment, the AO had made addition of Rs.13,00,78,760/- in respect of cash/credit deposits in the bank account of the assessee, which was treated as unexplained.
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In the tax computation, however, the tax was calculated on this addition at slab rate instead of tax rate at the rate of 60% u/s. 115BBE of the Act, resulting in short levy of tax. As this was a mistake apparent from record, the AO had passed an order u/s. 154 r.w.s. 147 of the Act on 14.11.2025, levying tax on the addition as made in the assessment order at the rate of 60% u/s. 115BBE of the Act.
Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the learned CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th
Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:
Hon. ADDL/JCIT (A) Ranchi has erred in not deciding the appeal on merits against Order of A.O. u/s 154 of the Act dt 14/11/2025. In as much as, Hon ADDL/JCIT (A) Ranchi has not provided opportunity of hearing though first hearing fixed on 18/12/2025 was requested for adjournment by assessee, whereas it is stated by Hon. ADDL/JCIT (A) Ranchi that no adjournment was sought for. 2 Hon ADDL/JCIT (A) Ranchi has erred in stating that as per Section 249(4)(b) in case where return is not filed, assessee was required to pay amount equal to advance tax payable by him for admission of appeal. In as much as, assessee did not have taxable income and hence return was not filed. Section 249(4)(b) provides though return is not filed by assessee if there is tax payable amount equal to advance tax has to be paid for admission of appeal. This is not the case in case of assessee. 3 Hon ADDL/JCIT (A) Ranchi has erred in confirming the Order u/s 154 passed by A.O who has also not considered the reply of the assessee to Notice u/s 154 of the Act dt 30/09/2024 was to be replied within 10 days ie. by 10/10/2024 and same was e-replied on 05/10/2024.Thus at both the lower level assessee is not provided opportunity of hearing
ITA No. 495/Ahd/2026 Manjibhai Maganbhai Asodiya Vs ITO, AY- 2018-19 3 4 The Order of A.O u/s 154 dt.14/11/2025 and Order of Hon. ADDL/JCIT (A) Ranchi dt.21/12/2025 do not survive, since the appeal of assessee against Order of A.O. u/s 147 r.w.s. 144 has been set aside by Hon. CIT(A), NFAC by order dt. 12/02/2026.
Shri S V Agarwal the Ld. AR of the assessee submitted in the course of hearing that the assessee had filed an appeal against the assessment order dated 28.03.2023 passed u/s. 147 r.w.s. 144 of the Act, which was decided by the NFAC Delhi, vide order dated 12.02.2026 and the matter was set aside to the file of the AO to re-examine the matter as the assessment was completed ex-parte u/s. 144 of the Act. He submitted that in view of this fact, the subsequent order u/s. 154 r.w.s. 144 of the Act passed by the AO on 14.11.2025 had become infructuous and the present appeal is now not maintainable.
Per Contra, Shri R P Rastogi, the Ld. CIT-DR submitted that since the order u/s. 154 dated 14.11.2025 now does not survive, the present appeal may kindly be disposed of suitably.
We have considered the rival submissions. The assessee has brought on record a copy of the order of the NFAC dated 12.02.2026 instituted against the assessment order u/s. 147 r.w.s. 144 of the Act, dated 23.03.2023. It is found therefrom that the Ld. CIT(A) had set aside the matter to the file of the Assessing Officer to re-examine the source of cash/credit deposits in the bank accounts, as the original assessment was completed u/s. 144 of the Act. As a result of the order of the Ld. CIT(A), the original assessment order now does not survive. Under the circumstances, the rectification order u/s. 154 r.w.s. 147 of the Act dated 14.11.2025 also does not survive and the present appeal filed by the
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assessee against this order has become infructuous. Therefore, the appeal filed by the assessee is dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the Court on 21/04/2026 at Ahmedabad.
Sd/- Sd/- (SAJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 21st April, 2026 Neelesh, Sr. PS (True Copy) आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप/सहायक उप सहायक पंजीकार उप उप सहायक सहायक पंजीकार पंजीकार आयकर अपीलीय आयकर अपीलीय अिधकरण अिधकरण, अहमदाबाद अहमदाबाद / ITAT, Ahmedabad आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण अहमदाबाद अहमदाबाद