EYEGEAR OPTICS INDIA PRIVATE LIMITED,HYDERABAD vs. DCIT., CRICLE-8(1), HYDERABAD

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ITA 1291/HYD/2024Status: DisposedITAT Hyderabad14 May 2025AY 2013-1419 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in remanding the matter back to the AO without adjudicating the specific ground raised by the assessee regarding the validity of the AO's jurisdiction to initiate reassessment proceedings. The Tribunal emphasized that while Section 251(1) of the Act, particularly the proviso, empowers the CIT(A) to set aside a best judgment assessment order and refer it back to the AO, this power cannot be used to validate an assessment framed without a valid assumption of jurisdiction. The Tribunal found substance in the assessee's argument that remanding without addressing the jurisdictional issue would effectively give the AO a second inning to frame an assessment despite a potential lack of valid jurisdiction. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file with a direction to adjudicate the specific ground concerning the AO's jurisdiction under the first proviso to Section 147. The Tribunal refrained from expressing any view on the merits of the addition or other grounds of appeal, allowing the appeals for statistical purposes.

What were the facts?

The assessee, Eyegear Optics India Private Limited, filed appeals for Assessment Years (AY) 2012-13 and 2013-14 against orders passed by the Commissioner of Income Tax (Appeals) [CIT(A)], NFAC. These orders stemmed from assessment orders passed by the Assessing Officer (AO) under Section 147 read with Section 144 of the Income Tax Act, 1961. For AY 2012-13, the AO had reopened the assessment, disallowed referral fees of Rs. 4.17 crores, and determined income at Rs. 16,91,181/-. The CIT(A) had set aside the AO's order and remanded it back to the AO for fresh adjudication. The assessee appealed this remand order, arguing that the CIT(A) lacked jurisdiction to remand without deciding the preliminary issue of the AO's jurisdiction to reopen the assessment.

What were the issues?

1. Whether the CIT(A) erred in remanding the matter back to the AO, which the assessee argued was without jurisdiction and unsustainable in law, thereby exceeding powers under Section 250 of the Act. 2. Whether the AO erred in issuing the assessment order without a Document Identification Number (DIN) as required by CBDT Circular No. 19/2019, rendering it bad in law. 3. Whether the reassessment proceedings were initiated beyond the time-limit prescribed under the first proviso to Section 147 of the Act. 4. Whether the AO erred in reassessing income based on a mere change of opinion. 5. Whether the AO erred in holding that alleged referral fees paid to doctors violated public policy and MCI regulations. Assessee's Contention: The CIT(A) erred by remanding the matter without deciding the crucial issue of the AO's jurisdiction to reopen the assessment, particularly concerning the time-limit under the first proviso to Section 147. The assessee argued that the CIT(A) should have adjudicated this legal issue first. The assessee also contended that the assessment order lacked a DIN and was based on a change of opinion. Further, the assessee argued that the referral payments were for space and infrastructure, not in violation of MCI regulations, and that any MCI violation should be decided by the MCI itself. Revenue's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 250,Section 251(1),Section 143(3),Section 148,Section 37(1),Section 234A,Section 234B,Section 271(1)(c)

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Income Tax Appellate Tribunal, Hyderabad A Bench, Hyderabad

For Respondent: Shri Srinath Sadanala, DR
Pronounced: 14.05.2025

आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : M/s Eyegear Optics India Private Limited, 8-2- 277/A & A9, Plot No.9, Soudagar’s Silver Breeze, Road No.2, Banjara Hills, Hyderabad 2. रधजस्व/ The Revenue : The Deputy Commissioner of Income Tax, Circle- 8(1), Signature Towers, Kondapur, Hyderabad 3. The Principal Commissioner of Income Tax, Hyderabad 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file

आदेशधिुसधर / BY ORDER

Sr. Private Secretary ITAT, Hyderabad

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