TOURS5 COM,HYDERABAD vs. ITO., WARD-9(1), HYDERABAD

Aggrieved, the assessee firm carried the matter in appeal before the CIT(A), who, taking cognizance of the fact that the assessee firm, due to non-compliance with the notices, had been visited with a best judgment assessment u/s 144 of the Act, therefore, set aside the matter to the file of the A.O. for fresh adjudication. For the sake of clarity, the observations of the CIT(A) are culled out as under: TOURS5 COM, HYDERABAD. TOURS5 COM, HYDERABAD.

The assessee firm, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

Smt. S. Sandhya, Advocate, the Learned Authorized Representative (in short “Ld.AR”) for the assessee firm, at the threshold of the hearing of the appeal, submitted that the CIT(A) had grossly erred in law and on facts of the case in disposing of the appeal without addressing the specific issues based on which the impugned order was assailed before him. Elaborating on her contention, the Ld. AR submitted that the assessee firm had specifically assailed the validity of the impugned assessment framed by the A.O. u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 04-03-2024, but the same had remained unaddressed by the CIT(A) while disposing of the appeal. The Ld. AR submitted that though the CIT(A) has set aside the matter to the file of the A.O. for fresh adjudication, but by so doing, its specific contention regarding the validity of the assumption of jurisdiction by the A.O. for framing the assessment under Section 147 of the Act had not only remained unaddressed, but also, on the matter having been set aside to the file of the A.O. for fresh adjudication had impliedly TOURS5 COM, HYDERABAD. validated the same. The Ld. AR submitted that the piecemeal disposal of the appeal by the CIT(A) based on a half-hearted approach, not being as per the mandate of law, was liable to be set aside.

Per contra, Sri Gurpreet Singh, the learned Senior Departmental Representative (for short, “Ld. DR”) relied upon the orders of the lower authorities.

We have heard the learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record.

Ostensibly, it is a matter of fact apparent from the record that the assessee firm in the course of assessment proceedings had adopted an evasive approach, wherein, it had neither complied with the notice issued u/s 148 of the Act; nor replied/furnished the details as were called for by the AO in the course of the assessment proceedings.

Be that as it may, it is a matter of fact borne from record that the assessee company in its "Ground of appeal No. 2" that TOURS5 COM, HYDERABAD. was raised before the CIT(A), had specifically assailed the validity of jurisdiction that was assumed by the AO for initiating the reassessment proceedings. For the sake of clarity, the "Ground of appeal No.2” raised by the assessee company before the CIT(A) is being culled out as under:

We are of the firm conviction that though the CIT(A) pursuant to the aforesaid amendment in Section 251 of the Act, now stands vested with the jurisdiction to set-aside and refer back a best judgment assessment order passed u/s 144 of the Act to the file of the AO for framing a fresh assessment, but the same cannot justify him from refraining to adjudicate the legal issues based on which the validity of the jurisdiction assumed by the A.O for framing the assessment or reassessment has been assailed before him. Rather, we find that as per Section 251(1) of the Act, the CIT(A) in disposing of an appeal is vested with the power to confirm, reduce, enhance or annul the assessment. We, thus, are of the firm conviction that in case an assessee appellant, based on the facts available on record, has assailed before the CIT(A) the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment or reassessment, then, if the said claim is found to be in order, the CIT(A) in the exercise of the TOURS5 COM, HYDERABAD. powers vested with him under sub-section (1) of Section 251 of the Act is obligated to annul the assessment or reassessment rather than adopting an evasive approach, and in the garb of the power vested with him as per the "Proviso" to Section 251(1) of the Act set aside and refer back the impugned best judgment assessment order passed u/s 144 of the Act for framing of fresh assessment by the AO. To sum up, the CIT(A) is obligated to address and adjudicate the grievance of the assessee appellant, as regards the validity of the jurisdiction assumed by the A.O for initiating the assessment or reassessment proceedings to the extent the same can safely be done based on the facts discernible from the record before him. Our aforesaid conviction can safely be gathered from the "Memorandum Explaining the Provisions in the Finance Bill, 2024", which to the extent relevant to the "Proviso" to Section 251(1) of the Act, reads as under:

Be that as it may, we are of the firm conviction that in the totality of the facts involved in the present appeal before us, the CIT(A) instead of summarily setting aside the matter to the file of the AO for making a fresh assessment, ought to have taken a call regarding the specific ground based on which the validity of the jurisdiction that was assumed by the AO for framing the reassessment was assailed by the assessee-appellant before him. Our aforesaid conviction that it is not obligatory on the part of the CIT(A) to set aside all best judgment assessment orders passed u/s 144 of the Act to the file of the AO is further fortified on looking at the language used by the legislature in the "Proviso" to Section 251(1) of the Act, i.e, ".....may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment ...." which, thus, does not compulsorily require the CIT(A) to set aside and refer the assessment in every case where it is made u/s 144 of the Act.

We thus, in terms of our aforesaid deliberations set aside the order of the CIT(A), and restore the matter to his file with a direction to adjudicate the specific "Ground of appeal No.2" based TOURS5 COM, HYDERABAD. on which the jurisdiction assumed by the A.O for framing the impugned reassessment order u/s 147 r.w.s 144 r.w.s 144B of the Act dated 04.03.2024 was assailed by the assessee firm before him.

Resultantly, the appeal filed by the assessee firm is allowed for statistical purposes in terms of our aforesaid observations.

We shall now deal with the appeal filed by the assessee firm in . As we have, while disposing of the appeal filed by the assessee firm directed against the order passed by the CIT(A), which in turn arises from the quantum assessment framed by the A.O. u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 04-03-2024, set aside the matter to the file of the CIT(A) for fresh adjudication, therefore, we herein set aside the captioned TOURS5 COM, HYDERABAD. appeal arising from the order passed by the A.O. u/s 271(1)(c) of the Act, dated 20.09.2024 to his file with a direction to decide the same after disposing of the quantum appeal of the assessee firm.

Resultantly, the appeal filed by the assessee firm is allowed on the same terms for statistical purposes.

We shall now deal with the appeal filed by the assessee firm in which in turn arises from the order passed by the A.O. under Section 271(1)(b) of the Act. The assessee firm has assailed the impugned order on the following grounds of appeal before us:

Succinctly stated, the A.O., based on the fact that the assessee firm had failed to respond to the notice(s) u/s 142(1) of the Act, dated 23.08.2023 and 15-09-2023, initiated penalty proceedings u/s 271(1)(b) of the Act.

Thereafter, the A.O., vide his order passed u/s 271(1)(b) of the Act dated 24-08-2024, imposed a penalty of Rs. 20,000/- on the assessee firm.

Aggrieved, the assessee firm carried the matter in appeal before the CIT(A). As the assessee firm had delayed the filing of the appeal before the CIT(A) by 26 days, therefore, it had sought for time to file an application seeking condonation of the delay, along with a supporting affidavit. However, the CIT(A), holding a conviction that the assessee firm had not come forth with any specific reason for the delay in filing of the appeal, declined to condone the same and dismissed the appeal on the said count itself. For the sake of clarity, the observations of the CIT(A) are culled out as under: TOURS5 COM, HYDERABAD. TOURS5 COM, HYDERABAD.

Aggrieved, the assessee firm has assailed the order of the CIT(A) before us.

We have heard the learned Authorized Representatives of both parties and perused the orders of the lower authorities as well as the material available on record.

As is discernible from the record, the CIT(A) had declined to condone the delay of 26 days involved in the appeal filed by the assessee firm and thus, approved the view taken by the A.O. TOURS5 COM, HYDERABAD.

We have given our thoughtful consideration to the issue in hand. In our view, there was no justification for the CIT(A) to have declined the request of the assessee firm for allowing time to file an application seeking condonation of the delay of 26 days involved in the appeal filed before him along with a supporting “affidavit”, for which a specific request was made before him. We say so, for the reason that in our view a justice oriented and liberal approach should be adopted on the issue of condonation of the delay filed by an appellant. Our aforesaid view is fortified by the judgment of the Hon’ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310- 26311/2024, dated 31st January, 2025, wherein the Hon'ble Apex Court while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of delay of 166 days by the Income Tax Appellate Tribunal, Raipur Bench, had observed that a justice oriented and liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay in filing the appeal. As the assessee appellant in the present case TOURS5 COM, HYDERABAD. before us had sought for some time to file an application for condonation of the delay of 26 days alongwith a supporting “affidavit”, the CIT(A), in all fairness, ought to have allowed him to do the needful instead of summarily dismissing the appeal. We thus, in terms of our aforesaid observations, set aside the matter to the file of the CIT(A), with a liberty to the assessee firm to file before him an application for condonation of the delay involved in the appeal along with a supporting “affidavit”, which the CIT(A) shall consider on merits.

Resultantly, the appeal of the assessee firm is allowed for statistical purposes in terms of our aforesaid observations.

To sum up, all the appeals of the assessee firm are allowed for statistical purposes in terms of our aforesaid observations.