INCOME TAX OFFICER, KOLHAPUR vs. DUDH SAKHAR US VAHTUK NAGARI SAHAKARI PAT SANSTHA MARYADIT, BIDRI

The captioned appeal at the instance of Revenue pertaining to A.Y. 2018-19 is directed against the order dated 24.01.2025 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 28.03.2023 passed u/s.147 r.w.s.144B of the Act.

None appeared on behalf of the respondent-assessee even when valid notice of hearing has been issued. With the assistance of ld. Departmental Representative, we proceed to adjudicate the appeal.

At the outset, ld. Departmental Representative referring to the grounds of appeal submitted that as per the proviso to section 251(1)(a) of the Act, ld.CIT(A) may set aside the orders passed by ld. Assessing Officer u/s.144 of the Act. However, in the instant case, the assessment order has been passed u/s.147 r.w.s.144B of the Act and therefore ld.CIT(A) was required to adjudicate the issues raised on merits. Ld. Departmental Representative further submitted that the impugned order needs to be set aside and directions may be given to ld.CIT(A) to deal with merits of the case.

We have heard the ld. Departmental Representative and perused the record placed before us. We observe that the assessee is an Association of persons and assessment for A.Y. 2018-19 has been framed on 28.03.2023 u/s.147 r.w.s.144B of the Act wherein ld. Assessing Officer had made certain additions which have been challenged by the assessee before ld.CIT(A). However, ld.CIT(A) after passing the order running into 52 pages has finally held that the assessment order deserves to be set aside and referred it back to the Assessing Officer for making afresh assessment. This decision of ld.CIT(A) is based upon the amendment brought to section 251 by the Finance Act, 2024 effective from 01.10.2024. Section 251 deals with the powers of the JCIT (Appeals) or the Commissioner (Appeals) and proviso to sub-section (1) of section 251 reads as under :

Now from going through the provisions of section 251(1)(a), powers have been given to ld.CIT(A) to refer the case back to the Assessing Officer for making afresh assessment if the assessment order is passed u/s.144 of the Act. However, in the instant case, the assessment order has been passed u/s.147 r.w.s.144B of the Act and therefore we find merit in the contention of ld. Departmental Representative and are of the considered view that ld.CIT(A) was not having the powers u/s.251 of the Act for restoring the assessment order framed u/s.147 r.w.s.144B of the Act to the file of Assessing Officer for afresh assessment and he was bound to deal with merits of the case and pass a speaking order as contemplated u/s.250(6) of the Act. Impugned order is set aside and the grounds of appeal raised by the Revenue are allowed for statistical purposes.

In the result, appeal of the Revenue is allowed for statistical purposes.