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Facts
The Revenue appealed against the orders of the CIT(A) who set aside assessments made under section 153A/144 of the Income Tax Act and remanded the cases back to the Assessing Officer for fresh assessment, citing lack of reasonable opportunity for the assessee. A search and seizure operation was conducted, leading to these assessments.
Held
The Tribunal held that the CIT(A) had the power to set aside assessments and remand them to the AO, especially after the amendment to Section 251 of the Income Tax Act by the Finance (No. 2) Act, 2024. The CIT(A)'s orders, dated 29.10.2024, were within the purview of this amended power.
Key Issues
Whether the CIT(A) erred in setting aside the assessment orders and remanding the case back to the AO without appreciating that reasonable opportunities were provided, and whether the amendment to Section 251 of the Income Tax Act validated the CIT(A)'s power to do so.
Sections Cited
132, 153A, 144, 251, 251(1)(a)
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Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI NIKHIL CHOUDHARY
These appeals have been preferred by the Revenue against separate orders, all dated 29.10.2024, passed by the Ld. Commissioner of Income Tax (Appeals), Kanpur – 4 (ld. CIT(A)) for Assessment Years 2017-18, 2020-21 and 2021-22.
The brief facts of the cases are that the assessee is an individual and a Search and Seizure Operation under section 132 of the Income Tax Act, 1961 (hereinafter called “the Act’) was conducted by the Investigation Wing at Kanpur in Kapila Krishi Udyog Pvt. Ltd. and other entities on 18.11.2020, consequent to which, assessments were framed under section 153A/144 of the IT(SS)A Nos.781, 782 & 785/LKW/2024 Page 2 of 6 Act for assessment years 2017-18 and 2020-21 and under section 144 of the Act for assessment year 2021-22, wherein certain additions were made.
Aggrieved by the orders of the Assessing Officer (AO), the assessee preferred appeals before the Id. CIT(A), who vide separate orders, all dated 29.10.2024, set aside the cases to the file of the Assessing Officer for making fresh assessments after providing reasonable opportunity of being heard to the assessee.
Now, the Revenue has approached this Tribunal challenging the impugned orders of the ld. CIT(A) by raising the following common grounds of appeal:
1. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-IV, Kanpur has erred in setting aside the case and referring back to the file of the Assessing Officer for making fresh assessment by citing that the Assessing Officer shall grant reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice, ignoring the facts that the Assessing Officer while making the assessment has provided sufficient opportunities of being heard to the assessee by issuing number of statutory notices including final show cause notice dated 18.10.2022.
2. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-IV, Kanpur has erred in setting aside the case and referred back to the file of the Assessing Officer
IT(SS)A Nos.781, 782 & 785/LKW/2024 Page 3 of 6 for making fresh assessment by holding that the order has been passed without adequate and proper consideration of replies/documents ignoring the submission of the assessee, as quoted in the appellate order, that all replies were filed during assessment proceedings, which were voluminous in nature. Moreover, there is nothing on record which suggests that the replies/documents were not considered in the assessment order.
3. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-IV, Kanpur has erred in accepting the plea of the assessee while setting aside the case, without there being any reasonable ground as brought on record for non-compliance by the assessee during the assessment proceedings.
4. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-IV, Kanpur has erred in setting aside the case by observing that the assessment order has been passed on 27.10.2022, while the time barring date was 31.12.2022, without appreciating the facts that the assessment order could not be remained pending till the time barring date because the Assessing Officer was also having other large number of cases pending which were also to be completed before the time barring date.
5. That the appellant craves leave to add alter, adduce or amend or any ground or grounds on or before the date of hearing of appeal.
IT(SS)A Nos.781, 782 & 785/LKW/2024 Page 4 of 6
During the course of hearing before us, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that in these cases, the AO had issued show-cause notice dated 18.10.2022 for compliance on 21.10.2022. However, he had not provided reasonable time to make compliance, whereas the time barring/ limitation for completion of assessments was 31.12.2022. Moreover, the assessments had been completed in haste after issuance of the show-cause notice on 27.10.2022, whereas the date for matters getting time barred was 31.12.2022. The Ld. A.R. further submitted that the AO had failed to provide reasonable and adequate opportunity to make compliance before passing the assessment orders. The Ld. A.R. submitted that the Id. CIT(A) has rightly set aside the assessment orders passed under sections 153A/144 of the Act to the file of the AO, under section 251(1)(a) of the Act. The Ld. A.R. prayed that in view of the above facts, the appeals of the Revenue are liable to be dismissed.
The Ld. CIT(DR) controverted the arguments of the Ld. A.R. and submitted that since adequate opportunity had been provided by the AO, the ld. CIT(A) had wrongly set aside the files to the office of the AO.
IT(SS)A Nos.781, 782 & 785/LKW/2024 Page 5 of 6
We have heard both the parties and have also perused the material on record. Vide Clause 71 of the Finance (No. 2) Act, 2024, section 251 of the Income-tax Act relating to powers of the Joint Commissioner (Appeals) or the Commissioner (Appeals) was amended. Prior to this amendment, sub-section (1) of the said section provided that the Commissioner (Appeals) shall have, inter alia, the powers to confirm, reduce, enhance or annul the assessment, in the case of an appeal against an order of assessment; or confirm, cancel, or vary to enhance or reduce, the penalty order, in the case of an appeal against an order imposing a penalty while disposing of such appeal. After the amendment, vide Clause 71 of the Finance (No. 2) Act, 2024, the said sub- section was amended by inserting a proviso in clause (a) of sub-section (1) thereof to provide that where an appeal is against an order of assessment under section 144 of the Act, the Commissioner (Appeals) shall have the power to set aside such assessment made under section 144 of the Act, and refer the case back to the Assessing Officer for making a fresh assessment. This amendment was effective from 1st October, 2024. Thus, after 01.10.2024, the ld. CIT(A) has been vested with power to remand the cases to the AO and the impugned orders passed by the ld. CIT(A) are dated 29.10.2024. In this view of the matter, we find no error in the impugned orders passed by the ld. CIT(A)
IT(SS)A Nos.781, 782 & 785/LKW/2024 Page 6 of 6 setting aside the orders of the AO and remitting the matter back to the file of the AO for deciding the same afresh after providing reasonable opportunity of hearing to the assessee.
In the result, all the three appeals of the Revenue stand dismissed.
Order pronounced in the open Court on 22/05/2025.