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Facts
The assessee, South Eastern Coalfields Limited (SECL), a Mini Ratna PSU, failed to deduct TDS on 'Power & Township Expenses' (₹259.67Cr) and 'Grant to Schools and Institutes' (₹48.25 Cr) which were claimed as deductions under Section 37(1) of the Income Tax Act, 1961. Consequently, the Assessing Officer held SECL in default under Section 201(1) read with Sections 192 and 17, determining liabilities under Sections 201(1) and 201(1A).
Held
The CIT(A) had partly allowed the assessee's appeals but remanded certain sub-grounds (c), (d) & (e) of ground number 2 for fresh verification by the AO. The Tribunal held that the CIT(A) lacked the power to remand issues for fresh adjudication to the Assessing Officer where the original order was not passed ex-parte under Section 144 of the Act. Therefore, the Tribunal set aside the CIT(A)'s remand and directed the CIT(A) to adjudicate the remanded sub-grounds de-novo in accordance with law.
Key Issues
Whether the first appellate authority has the power to remand any issue for fresh adjudication to the assessing officer when the order challenged in the first appeal is passed otherwise than under Section 144 of the Income Tax Act, 1961.
Sections Cited
Income Tax Act, 1961, Section 250, Section 251, Section 251(1), Section 251(1)(a), Section 192, Section 17, Section 201, Section 201(1), Section 201(1A), Section 133(6), Section 143(3), Section 37(1), Section 44AA, Section 44AB, Section 144
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: HON’BLE SHRI PARTHA SARATHI CHAUDHURY & SHRI G. D. PADMAHSHALI
Appearances Assessee by: Mr Vinod kumar Khatri [Ld. AR’] Revenue by: Mr Saad Kidwai [Ld. DR’] Date of conclusive Hearing: 18/09/2025 Date of Pronouncement : 19/09/2025 ORDER PER BENCH; The captioned bunch of first twenty-seven appeals of the Revenue and even number of cross appeals by the assessee challenges respective orders passed by Addl./Jt. Commissioner of Income Tax, Appeals-1, Gurugram [‘Ld. CIT(A)’] u/s 250 of the Income Tax Act, 1961 [‘the Act’] which in turn emanated out of separate orders passed u/s 201/201(1A) of the Act by Asstt./Dy. Commissioner of Income Tax(TDS), Raipur [‘Ld. AO’] all anent to assessment year 2017-18[‘AY’].
The common, limited & solitary question/issue dealt with in these appeals seeks to answer ‘as to whether first appellate authority has a power to remand any issue for fresh adjudication to assessing officer where the order challenged in first appeal is passed otherwise than u/s 144 of the Act?
ITAT-Raipur Page 3 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 3. Since facts involved in this bunch of cross appeals and limited issue to be dealt herein is common & identical, on rival party’s request these cross appeals for the sake of brevity & convenience are heard together for being disposed off by common & consolidated order. In adjudicating the former common issue/question we shall deal with Sr. 1 in as lead case and our adjudication laid hereinafter thus shall mutatis-mutandis apply to remaining cross appeals as tabulated & captioned hereinbefore.
Briefly stated common facts of the case are that; 4.1 The assessee South Eastern Coalfields Limited, is Central Government’s a Mini Ratna Unlisted Public Sector Company headquartered at Bilaspur, Chhattisgarh[‘SECL’]. The assessee is primarily engaged in mining and production of Coal. The assessee being deductor of tax is responsible to collect and deduct tax at sources [TDS’] under the provision of the Act. The assessee is regular in fling periodic TDS returns in prescribed Form No. 24Q, 26Q and 27EQ etc., in accordance with the ITAT-Raipur Page 4 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 procedure laid down for the purpose under the Act. For the year under consideration the assessee maintained regular books & records and are as required u/s 44AA of the Act subjected to tax audit in terms of section 44AB of the Act.
4.2 From the regular assessment order passed u/s 143(3) of the Act for AY 2017-18 it was observed that, for the year under consideration the assessee company debited to its profit & loss a/c a sum of ₹259.67Cr under the head ‘Power & Township Expenses’ in respect of employees benefit expense and also debited an expense of ₹48.25 Cr. under the head ‘Grant to Schools and Institutes’, and claimed such expenses as deduction 37(1) of the Act without making TDS deduction therefrom.
4.3 In order to verify applicability of TDS provisions and consequential liabilities against such identified expenses claimed as deduction, a proposal was sent for approval u/s 133(6) of the Income Tax Act, which was approved vide letter F. ITAT-Raipur Page 5 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 No. CIT(TDS)/BPL/133(6)/2023-24 dt 03/11/2023. Accordingly, vide notice u/s 133(6) of the Act dt 06/11/2023 the assessee called upon to furnish full details of expenses incurred, debited and claimed as expenses under the head Power & Township expenses and Grant to Schools and Institutes.
4.4 The details submitted during the course of proceedings by the assessee revealed to the Ld. AO that; while debiting former twin expenses or payment made there against and while claiming deduction there against the assessee company failed to deduct TDS therefrom. For the reasons the assessee, without prejudice any other consequence held as assessee in default in respect of such non-deduction deduction u/s 201(1) r.w.s. 192 r.w.s. 17 of the Act. In consequence thereof the Ld. AO determined the liability u/s 201(1) and 201(1A) of the Act separately in relation to twenty-seven (27) Tax Deduction Account Number[‘TAN’] held by the assessee for various location as under; ITAT-Raipur Page 6 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 Details of Assessment Order passed u/s 201 of the Act Interest Sr TAN Penalty/ Tax levied levied Date Total Demand u/s 201 of the Act 201(1A) of the Act 1 JBPS07663F 28/03/2024 49,03,952 41,19,319 90,23,271 2 JBPS07664G 28/03/2024 49,03,952 41,19,319 90,23,271 3 JBPS07665A 28/03/2024 49,03,952 41,19,319 90,23,271 4 JBPS07666B 28/03/2024 49,03,952 41,19,319 90,23,271 5 JBPS07667C 28/03/2024 49,03,952 41,19,319 90,23,271 6 BPLS04886A 27/03/2024 2,88,78,698 2,42,58,106 5,31,36,804 7 JBPS00359C 27/03/2024 3,63,69,242 3,05,50,163 6,69,19,404 8 JBPS00355F 27/03/2024 1,09,68,300 92,13,372 2,01,81,672 9 BPLS04875D 27/03/2024 33,73,869 28,34,050 62,07,919 10 JBPS13157E 27/03/2024 33,73,869 28,34,050 62,07,918 11 JBPS02656D 27/03/2024 1,41,27,187 1,18,66,837 2,59,94,024 12 BPLS04617E 27/03/2024 3,75,20,982 3,15,17,625 6,90,38,607 13 JBPS02667A 27/03/2024 1,41,27,188 1,18,66,838 2,59,94,025 14 BPLS04966D 30/03/2024 37,64,587 31,62,252 69,26,839 15 BPLS04697A 27/03/2024 2,79,14,729 22,80,371 49,95,101 16 JBPS11724G 30/03/2024 37,64,587 3162252 69,26,839 17 JBPS03090D 27/03/2024 27,14,729 22,80,371 49,95,101 18 JBPS03804D 27/03/2024 53,27,481 44,75,084 98,02,565 19 JBPS06999G 27/03/2024 53,27,481 44,75,084 98,02,565 20 JBPS07658A 28/03/2024 49,03,952 41,19,319 90,23,271 21 JBPS07662E 28/03/2024 49,03,952 41,19,319 90,23,271 22 JBPS07660C 28/03/2024 49,03,952 41,19,319 90,23,271 23 JBPS07659B 28/03/2024 49,03,952 41,19,319 90,23,271 24 JBPS02072A 27/03/2024 37,64,587 31,62,252 69,26,839 25 JBPS02076A 27/03/2024 37,64,587 31,62,252 69,26,839 26 JBPS03398D 27/03/2024 2,99,83,780 2,51,86,375 5,51,70,156 27 JBPS00358B 27/03/2024 1,41,27,188 1,18,66,838 2,59,94,025 ITAT-Raipur Page 7 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 4.5 Aggrieved assessee filed separate appeals against each of such twenty-seven (27) orders passed u/s 201 of the Act, which were partly allowed by the Ld. CIT(A) vide order dt. 28/02/2025. Against such separate orders of Ld. CIT(A), both the rival parties came in present bunch of cross appeals.
Without touching merits, we have heard the rival party’s common submission and argument on the limited issue of jurisdiction of first appellate authority in sparingly remanding common issues assailed by the assessee in ground 2c, 2d & 2e in Form No 35 and subject to rule 18 of ITAT-Rules, 1963 perused the material placed on record and considered the facts in view of settled position of law which was forewarned to respective parties.
6. As we note that, against the DIN & Order No. ITBA/COM/F/17/2023-24/1063568142(1) dt. 28/03/2024 passed u/s 201 of the Act, the assessee filed an appeal before Ld. CIT(A) on 14/04/2024 on as many as four grounds. While ITAT-Raipur Page 8 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 adjudicating ground number 2 relating to non-deduction of TDS in respect of Power and Township Expenses, the Ld. CIT(A) dealt with the submissions of the assessee and dismissed sub ground number 2(a), 2(b), 2(f) & 2(h) and whereas remaining connected sub grounds viz; 2(c), (d) & 2(e) sparingly returned to the file of Ld. AO with a direction to verify issues on merits and allow the relief after due verification. As jointly solidified by the rival parties, these sub grounds (a) to (h) of ground 2 assailed in first appeal before the Ld. CIT(A) were indisputably not only intrinsically but also interictally linked with each other.
As we note that, the order appealed in section 264A of the Act before the Ld. CIT(A) for adjudication was the one which was passed u/s 201 of the Act and not u/s 144 of the Act. Therefore, we have to vouch as to whether the Ld. CIT(A) had jurisdiction or power u/s 251 of the Act to remand any issue, ground or sub- ground to the file of Ld. AO for verification & granting relief where the order was not the one passed ex-parte u/s 144 of the Act.
ITAT-Raipur Page 9 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 8. Without reproducing loose, stock & barrel of provisions of section 251(1)(a) of the Act, it shall suffice to state that, the bare/plain reading of provision clearly suggest that w.e.f. 01/10/2024 the first appellate authority is not vested with jurisdiction to remand any issue/subject or file back to the assessing officer for fresh or de-novo verification where order assailed in appeal is passed otherwise than u/s 144 of the Act. Therefore, in case where the order appealed against in first appeal is passed otherwise than 144 of the Act, any action/direction of remand for fresh verification by the first appellate authority is therefore barred by jurisdiction.
The validity of action of the tax and appellate authorities which does not confirm with the provisions of statute came for consideration before the Hon’ble Supreme Court in Chandra Kishore Jha Vs Mahavir Prasad’ [1999, 8 SCC 266 (SC)], wherein their hon’ble lordships held that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’.
ITAT-Raipur Page 10 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 10. In the present case, since the statute did provide no power to remand where the order appeal against was passed u/s 201 of the Act the first appellate authority therefore in view of former decision, the impugned remittance of sub-ground (c), (d) & (e) for verification of facts on merits a fresh directed by the Ld. CIT(A) finds no place in the statute. Since such direction remand is devoid of provisions of section 251(1)(a) of the Act, therefore deserves to be vacated. We say so, because erstwhile provisions of section 251(1) of the Act which was in force up to 30/09/2024 did not permit the first appellate authority to remand any issue or ground to the file of assessing officer at all. Au contraire the said provision obligated the first appellate authority to culminate first appeal conclusively either by confirming, reducing, enhancing or annulling the order appealed against. The proviso to clause (a) of s/s (1) of section 251 of the Act inserted by the Finance Act 2024 which came into effect 01/10/2024 however empowered the first appellate authority for referring an issue/file back to the assessing officer for de-novo assessment but only in cases where the assessment order appealed against ITAT-Raipur Page 11 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 was framed ex-parte u/s 144 of the Act and not otherwise. That is to say the newly inserted proviso to clause (a) to s/s (1) of section 251 of the Act, while empowering first appellate authority to remand an issue or a file to assessing officer for verification a fresh has also attached invariable restriction on its operation. As such power to remand is operable only when the order assailed for adjudication in first appeal is framed u/s 144 of the Act.
The amended provision of section 251(1)(a) of the Act w.e.f. 01/10/2024 clearly but inversely restricts the jurisdiction of first appellate authority in remanding any issue/file to assessing officer for fresh assessment. Going by stricter application / interpretation of law as laid by the Hon’ble Supreme Court in ‘State of Uttar Pradesh Vs Koreas India Ltd.’ reported in AIR 1977 SC 132 and further in the landmark case of ‘Dilip Kumar Vs CCE’ reported 9 SCC 1 we are mindful to hold that, while dealing with the first appeals unless the order under challenge before the first appellate authority order is framed ex-parte by the assessing officer u/s 144 of the Act, any action of remanding any subject, ITAT-Raipur Page 12 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 issue, ground or sub ground or file (as the case may be), for verification or reverification a fresh to the assessing officer shall be beyond the jurisdiction of section 251(1)(a) of the Act.
Further insofar as the validity of remand ordered and impugned direction/action of Ld. CIT(A) dealing with sub- grounds variably where all other sub-grounds of main ground number 2 are intrinsically interconnected, interwoven and linked, we are mindful to note that on the similar issue the Ld. co-ordinate bench in ‘Computer Science Corp. India (P) Ltd. Vs DCIT’ [2024, 163 taxmann.com 693] held that order dismissing all ground commonly based on single issue by disobeying the mandates of s/s (6) of section 250 of the Act ceases to be lawful adjudication, therefore renders itself irregular. Thus, such adjudication is a fit case for remand.
Admittedly the impugned action of remand of few sub- grounds which where interconnected with remaining sub- grounds adjudicated conclusively by the Ld. CIT(A) are not only inconsonance with provisions of law but such action also out ITAT-Raipur Page 13 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 done the restriction placed by proviso to clause (a) of s/s (1) of section 251 of the Act. The first appellate authority being creature of statutory therefore while exercising the powers conferred under the provisions of law in discharging prescribed function was bound to act within the jurisdiction. In remanding few sub-grounds in relation to order assailed in our considered view the Ld. CIT(A) inadvertently assumed the powers not granted by the provisions of section 251(1)(a) of the Act.
Any action, direction or adjudication laid by the appellate authority by travelling beyond the provisions of law or authority by law renders otiose for the purpose of the Act. This view finds fortified in the judgement of Hon’ble Gujarat High Court rendered in the case of ‘Gujarat Mineral Development Corporation Ltd. Vs ITAT [2009, 314 ITR 14 (Guj.)]. In this case while dealing with the powers of ITAT, their Hon’ble lordships have categorically held that, in adjudicating the matter in appeals the authority cannot travel beyond the provisions of law. Thus, such action is barred by jurisdiction and therefore stands vacated.
ITAT-Raipur Page 14 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 15. In the present case, the order challenged before the Ld. CIT(A) was an order passed u/s 201 of the Act and as such other than the order passed ex-parte u/s 144 of the Act. Therefore the Ld. CIT(A) had no jurisdiction to remand any issue/ground or sub-ground of the first appeal to the file of Ld. AO for verification or reverification of merits a fresh. Per contra, the sub-ground (c), (d) & (e) of ground number 2 raised in Form No 35 before Ld. CIT(A) not only remained unadjudicated conclusively in terms of section 251(1)(a) of the Act but remanded to Ld. AO for de-novo verification on merits in contravention of provision of section 251 of the Act.
In view of the former judicial precedents, we are of considered opinion that, the impugned action relating to adjudication of sub-ground (c), (d) & (e) of ground number 2 suffered from jurisdiction as well as the compliance of s/s 251(1) r.w.s. 250(6) of the Act, for that reason without disturbing balance adjudication we set aside the remand to the file of Ld. CIT(A) with a point-blank direction to dealt sub-ground (c), (d) & ITAT-Raipur Page 15 of 16 SECL Group Vs ACIT(TDS), Raipur to 223 & 275 to 301/RPR/2025, AY 2017-18 (e) of ground number 2 of Form No. 35 and adjudicate them de- novo in accordance with law and for passing a speaking order. The Ground No 1 & 2 of the present appeal of the Revenue thus stands partly allowed for statistical purposes. On a similar line all remaining appeals filed by the Revenue also stands partly allowed for statistical purposes in above terms. In consequence our adjudication in Revenue’s appeal, all cross appeals filed by the assessee for the sake of completeness are also stands partly allowed for statistical purposes in above terms. The question framed hereinbefore stands adjudicated negatively.
In result, this bunch of cross appeals stands PARTLY ALLOWED FOR STATISTICAL PURPOSES in aforestated terms. In terms of rule 34 of ITAT Rules, 1963, the order pronounced in the open court on date mentioned herein before.
-S/d- -S/d- PARTHA SARATHI CHAUDHURY G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt: 19th September, 2025. Copy of the Order forwarded to:
1. 1. The Appellant.
2. The Respondent.