Loading judgment…
Facts
The assessee, a charitable institution, filed its return of income for AY 2020-21. The case was selected for scrutiny, but the assessee failed to respond to statutory notices. The Assessing Officer (AO) completed the assessment ex parte under section 144 of the Act.
Held
The Commissioner of Income Tax (Appeals) set aside the assessment order and restored the matter to the AO for fresh adjudication. The Income Tax Appellate Tribunal held that the CIT(A)'s directions were within the powers conferred by section 251(1)(a) of the Act and upheld the CIT(A)'s order.
Key Issues
Whether the CIT(A) was justified in setting aside the ex parte assessment order and remanding the matter to the AO for fresh assessment after considering the assessee's non-compliance.
Sections Cited
144, 143(2), 68, 251(1)(a), 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, C BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA
The present appeal of the Revenue is directed against the order dated 03.07.2025 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld.CIT(A)”] arising out of the assessment order dated 21.10.2022 passed by the Income Tax Officer (Exemptions), Madurai [hereinafter referred to as “the AO”] u/s.144 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] pertaining to the Assessment Year 2020-21.
The brief facts of the case are that the assessee, a charitable institution, filed its return of income for the impugned assessment year on 13.01.2021, declaring aggregate income eligible for exemption u/s.11 of the Act at Rs.
:-2-: ITA. No:2600/Chny/2025 3,05,51,409/-, and the amount applied during the previous year relevant to the assessment year under consideration at Rs. 2,95,92,402/-.
The case was selected for scrutiny and notice u/s.143(2) of the Act was issued on 10.03.2021. During the course of assessment proceedings, the AO observed that the assessee failed to comply with/respond to the statutory notices issued from time to time. Consequently, the AO proceeded to complete the assessment ex parte u/s.144 of the Act vide order dated 21.10.2022, determining the total income of the assessee at Rs. 6,66,95,395/-.
While completing the assessment, the AO computed the total gross receipts of the assessee at Rs.6,99,88,974/- and allowed application of income towards the objects of the trust at Rs.1,13,61,366/-, thereby arriving at an excess of income over expenditure amounting to Rs.5,86,27,608/-.
Further, after making various disallowances, the AO assessed the income of the assessee under the head “Profits and Gains of Business or Profession” at Rs. 6,53,98,230/-. In addition thereto, the AO made an addition of Rs. 12,97,165/- on account of unexplained cash credit under section 68 of the Act.
Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A), vide the impugned appellate order dated 03.07.2025, set aside the assessment and restored the matter to the file of the AO for fresh adjudication/consideration in accordance with law. Aggrieved by the said order of the Ld.CIT(A), the Revenue has preferred the present appeal before this Tribunal.
At the outset, we observe that the impugned assessment has been framed by the AO u/s.144 of the Act. We further note that the first proviso to section 251(1)(a) of the Act confers powers upon the Ld.CIT(A) to set aside the assessment and restore the matter to the file of the Assessing Officer for the purpose of framing a fresh assessment in accordance with law.
:-3-: ITA. No:2600/Chny/2025
In the present case, the Ld.CIT(A), after considering the facts and circumstances of the case, has exercised the aforesaid statutory power and set aside the assessment order with a direction to the AO to make a fresh assessment after due verification/examination of the relevant material and after affording reasonable opportunity of being heard to the assessee. In our considered view, such directions issued by the Ld.CIT(A) are well within the four corners of the powers vested u/s.251(1)(a) of the Act and are fully in conformity with the scheme of the Act. We do not find any infirmity, illegality or perversity in the directions so issued by the Ld.CIT(A), warranting interference by this Tribunal. Accordingly, the order of the Ld.CIT(A) is upheld. Consequently, the grounds raised by the Revenue stand dismissed.
In the result, the appeal of the Revenue stands dismissed.
Order pronounced in the open court on 02nd February, 2026 at Chennai.