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Facts
For Assessment Year 2017-18, the assessment was completed ex-parte by the Assessing Officer under Section 144 read with Section 147. During the appellate proceedings before the CIT(Appeals)/NFAC, the assessee submitted new documentary evidence and written submissions, which had not been presented to the AO.
Held
The CIT(Appeals)/NFAC, exercising powers under the newly introduced proviso to Section 251(1)(a) of the Income Tax Act (inserted by Finance Act, 2024), set aside the ex-parte assessment and remanded the case to the Assessing Officer for a fresh de-novo assessment to consider the new submissions. The ITAT upheld the CIT(Appeals)/NFAC's decision, finding no justification to interfere, and consequently dismissed the assessee's appeal.
Key Issues
Whether the appellate authority correctly exercised its power to set aside an ex-parte assessment and remand the case for fresh assessment when new evidence was submitted for the first time during the appellate proceedings, considering the recent amendment to Section 251 of the Income Tax Act.
Sections Cited
Section 144 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 251(1)(a) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 07.07.2025 for the assessment year 2017-18 as per the grounds of appeal on record.
2. In this case, assessment was completed u/s.144 of the Income Tax Act, 1961 (for short ‘the Act’) and in this backdrop, the Ld. CIT(Appeals)/NFAC observed and held as follows: “6. Finding: 6.1 I have considered the facts of the case and material on record. 6.2 The appellant was provided opportunity and the appellant has made submissions and submitted documents for consideration. During the appellate proceedings, appellant has submitted documents regarding the bank accounts. 6.3 It is an undisputed fact that the assessment order was passed ex-parte u/s.147 r.w.s 144 of the Act in the present case and the appellant didn't furnish any written submission or evidences during the assessment proceedings before the AO. Now, the appellant has made a written submission with documentary evidences during the appellate proceedings, which were not furnished before the AO and the AO had passed the ex-parte order without having any opportunity to consider these submissions/evidences in the present case. Since the written submission and documentary evidences has direct bearing on the issue in the present case, opportunity of being heard needs to be provided to the appellant. 6.4 In order to tackle such cases so that proper justice is done to the assessee, Finance Act, 2024 inserted in new provision in the Income Tax Act, 1961. Section 251 of the I.T. act was amended as under: In section 251 of the Income-tax Act, in sub-section (1), in clause (a), the following proviso shall be inserted with effect from the 1st day of October, 2024, namely:- "Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh 6.5 Considering the above facts, in the interest of natural justice, the aforesaid assessment order is hereby set-aside by invoking the powers under the proviso below to clause (a) of sub-section (1) of section 251 of the Income Tax Act, 1961. Therefore, the Assessing Officer is hereby directed to make fresh assessment order after providing sufficient opportunities of being heard and considering all the material facts, written submission and documentary evidences submitted by the appellant during the appellate proceedings as well as set-aside assessment proceedings. Nonetheless to say that the appellant shall furnish complete written submission and documentary evidences in support of its contention before the AO during set-aside assessment proceedings.
Accordingly, the appeal is hereby set aside for fresh re- assessment order De-Novo.”
That since the assessment was completed as best judgment assessment u/s. 144 of the Act, the Ld. CIT(Appeals)/NFAC vide its power through the amendment vide Finance Act, 2024 as per Section 251 of the Act, had remanded the matter to the file of the A.O for denovo assessment considering the facts and circumstances of the case.
That though the submissions were made by the assessee but it was only for the first time made before the Ld. CIT(Appeals)/NFAC. That in view of the amendment to Section 251 of the Act and following the principles of natural justice, the Ld. CIT(Appeals)/NFAC in its own wisdom had remanded the matter to the file of the A.O for proper enquiry and verification. It is also the matter of fact that no evidence or submission were placed before the A.O. Hence, I find no justification to interfere with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld.
As per the above terms grounds of appeal raised by the assessee are dismissed.