SHAH DILIP SANKARCHAND,AHMEDABAD vs. ACIT, CIRCLE 1(3), AHMEDABAD, AHMEDABAD

The Learned National Faceless Appeal Centre has erred in facts and in law, by directing the leaned AO to make fresh assessment and therefore the learned AO should be directed to accept the returned income.

That your appellant craves a leave to add, alter or amend any grounds at the time of hearing.”

At the outset, the Ld.Counsel for the assessee has invited our attention to the impugned order of the Ld.CIT(A) and has submitted that the Ld.CIT(A) observing that the impugned assessment order of the Assessing Officer (AO) was an ex-parte/ best judgement assessment order passed u/s.144 of the Act, has restored the matter for assessment afresh to the file of the AO. That he, however, has not adjudicated the legal grounds taken by the assessee before the Ld.CIT(A). The Ld.Counsel, in this respect, has submitted that the assessee has challenged the very juri iction of the AO to frame the impugned assessment on the ground that the mandatory notice u/s.143(2) of the Act, was not issued by the juri ictional AO. It was submitted that the returned income, for the year under consideration, of the assessee being more than Rs.25 lakhs, the pecuniary juri iction to frame the assessment lied with the Dy.Commissioner of Income Tax. However, a notice u/s.143(2) of the Act, was issued by the Income Tax Officer, Ward-1(3)(4), Ahmedabad, which did not have the juri iction to do so in the case of assessee. The Ld.Counsel has submitted that the Ld.CIT(A) has failed to decide the above legal grounds taken before him, which hit at the very validity of the assessment order being passed without issuance of notice u/s.143(2) of the Act by the AO having competent juri iction. The Ld.Counsel, therefore, has submitted that the Shah Dilip Sankarchand vs. ACIT 1(3) Asst.Year : 2017-18

The Ld.Departmental Representative (DR), however, has relied upon the finding of the Ld.CIT(A).

We have considered the rival submissions. It is settled law that the legal issue contesting the very validity of the assessment order or hitting at the juri iction of the AO to frame assessment can be taken at the appellate stage. The Ld.CIT(A), in our view, was supposed to adjudicate the legal issues raised before him, but he has remanded the matter to the file of the AO for de novo assessment without adjudicating the legal issues. If the concerned AO has no juri iction, the assessment order passed by him will not be a valid order for want of issue of notice u/s.143(2) of the Act. Under the circumstances, no useful purpose will be served in restoring the matter to the file of the AO. Hence, the impugned order of the ld.CIT(A) is set aside and the matter is restored to the file of ld.CIT(A) with a direction to adjudicate on the legal issues raised by the assessee before him and, thereafter, to decide the appeal of the assessee in accordance with law.

In the result, appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the Open Court on 22/08/2025. (Makarand V. Mahadeokar) Accountant Member अहमदाबाद/Ahmedabad, िदनांक/Dated 22/08/2025

अपीलाथ% / The Appellant 2. #&थ% / The Respondent. 3. संबंिधत आयकर आयु' / Concerned CIT 4. आयकर आयु' ) अपील ( / The CIT(A)- (NFAC), Delhi 5. िवभागीय #ितिनिध , अिधकरण