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Facts
The assessee, a non-filer, was selected for assessment under section 147 of the Income-tax Act, 1961, for making a sale transaction of immovable property. The Assessing Officer completed the assessment and added income at Rs.2,99,60,000/-. The assessee appealed to the NFAC, which set aside the AO's order to give an opportunity of being heard. The assessee is now in appeal before the Tribunal against the NFAC's order.
Held
The Tribunal held that the NFAC had set aside the matter to the AO without accepting or rejecting the additional evidence. The NFAC should have either accepted or rejected the additional evidence and, if accepted, should have called for a remand report from the AO before passing an order on merit. The Tribunal restored the issue to the file of the NFAC.
Key Issues
Whether the NFAC was justified in setting aside the assessment order without accepting or rejecting the additional evidence and calling for a remand report from the AO.
Sections Cited
143(3), 147, 142(1), 148, 144, 12AA, 11, 11(1A), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI
Date of hearing: 05/02/2026 Date of Pronouncement: 11/02/2026 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as “Ld. NFAC)”] vide order dated 10-09-2025 pertaining to A.Y. 2013-14 arising out the assessment order dated 28-03-2022 u/s.143(3) r.w.s.144B of the Income-tax Act, 1961, (in short ‘the Act’).
The assessee has raised the following grounds in appeal as under:
1. Because, learned CIT(Appeals) has erred and wrongfully held that the ‘Appellant’ had filed additional evidence under rule 46A and certain facts like registration u/s 12AA were not brought to the notice of the AO during assessment proceedings.
2. Because, learned CIT(Appeals) has erred and failed to appreciate that the First Appellate authority had no power to set aside the assessment to the file of AO unless the assessment is made u/s 144 and in said view of matter he could not set aside the assessment to the file of AO even if the additional evidence or new submissions , not filed or made before the AO are submitted during appellate proceedings.
3. Because, learned CIT (Appeals) has erred in not adjudicating the issue before him and directed for setting aside the assessment as short cut measure and shirking his liability of making fair, just and quick resolution of dispute before him.
4. Because the order appealed against is illegal contrary to the facts material on record, law and principles of law and natural justice.
5. Because in the facts and circumstances of the case the Appellant is entitled for the cost of appeal.
6. Various grounds raised herein are without prejudice to each other and the appellant reserves the right to add modify alter or substitute any or all grounds of appeal.
3. The brief facts of the case are that the assessee is a non- filer. The case of the assessee was selected for assessment u/s 147 of the Act for reason that the assessee made a sale transaction of immovable property worth Rs.2,80,00,000/- (Govt. Value) which was sold at a total consideration of Rs.10,00,000/-. The assessee also paid Stamp Duty on the transaction to the tune of Rs.19,60,000/-. The assessee has neither disclosed the transaction in the ROI, nor paid tax on the income or gain. The department initiated assessment proceedings u/s 143(3) read with section 147 and notice u/s 142(1) of the Act was issued to the assessee. In the response of the notice u/s 148 of the Act, the assessee filed return of income declaring total income at Rs. Nil. During the course of proceedings, the assessee stated that neither the land has been transferred to any outsider nor the payment had been made to any person. The Assessing Officer completed that assessment proceedings and assed the income at RS.2,99,60,000/-. 4 Aggrieved the order of the ld. AO the assessee preferred the appeal before the Ld. NFAC who vide his order dated 10-09-2025 set aside the order of the AO to finalizing the assessment order to give the opportunity of being heard to the assessee. The Ld. NFAC observed in his order as under:
“6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. The appellant has filed additional evidences under Rule 46A of the Income Tax Rule before me. The appellant has stated that it is a society and registration has been granted by the CIT u/s 12 AA of the Income Tax Act dated 11-01- 1990. The appellant has also relied upon various judgments of various High Courts that in case of a trust if it is applied for charitable or religious purposes in accordance with section 11 of the Income Tax Act, the same has to be treated as exempt u/s 11(1A) of the Income Tax Act. These facts were not brought out before the AO in the assessment proceedings. Since the assessment order has been passed u/s 143(3) of the Income Tax Act and has mentioned that proper opportunity was not granted by the AO in finalizing the assessment order, and hence in the interest of justice, the matter is set aside to the file of the AO.
7. The appeal of the appellant is Allowed for statistical purposes.”
Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.
6 Ld. AR of the assessee submitted that the Ld. NFAC passed the order without accepting the addition evidences filed by the assessee. The Ld. NFAC should have accepted or rejected the additional evidences filed by the assessee, and if additional evidences accepted then remand report should have been called from the AO. He further submitted that Ld. NFAC has no power to set aside the assessment unless the assessment is made u/s 144 of the Act. Learned authorized representative for Department of Revenue submitted that Ld. NFAC has passed the reasoned order. He also submitted that the only the matter was set aside to AO.
We have heard the rival contentions and perused the material available on record. It is evident from the order that the Ld. NFAC set aside the matter to the file to AO, without accepted the additional evidences furnished by assessee. The Ld. NFAC should have been accepted or rejected the additional evidences, if accepted then after calling the remand report from the AO, should have passed the order on merit of the case. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. NFAC with a direction to pass the fresh order after accepting the additional filed by assessee under Rule 46A of the Income Tax Rules, after calling the remand report from the AO. The appeal filed by the assessee is liable to be allowed for statistical purposes. We hold and direct accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court 11.02.2026.