DHARAMPAL SINGH,GAUTAM BUDH NAGAR vs. ITO, WARD- 1(3), NOIDA

The assessee in this appeal has assailed the legal tenability of the impugned order in restoring the matter to the AO after annulling the assessment.

I have heard both the sides and perused the relevant material on record. It is a two-paged order by the learned CIT(A). The first page records the submissions made on behalf of the assessee. Page 2 of the impugned order reads as under:-

“From the impugned order it is seen that the ld. Assessing Officer had made no claims at all of assuming jurisdiction u/s. 143(2) of I.T. Act, 1961. Without initiating proceedings u/s 143(2) an assessment order cannot be framed and the impugned assessment order having been framed by the ld. Assessing Officer without assuming jurisdiction u/s. 143(2) is bad in law and cannot be sustained in the eyes of the law. The same is therefore annulled. However, the framing of assessment in this case is amenable to the jurisdiction of section 150 I.T. Act, 1961 and reframe the assessment after following the due procedure of law and after giving reasonable opportunity of being heard to the appellant. The appeal stands disposed in terms of the above.”

It is apparent from the above extracted finding returned by the learned CIT(A) that the assessment order was passed by the Assessing Officer without assuming jurisdiction under section 143(2). That is how, the assessment was annulled. However, in the later part of the para, the learned CIT(A) has directed the Assessing Officer to reframe the assessment order after allowing due opportunity to the assessee.

In my considered opinion, this action of the ld. first appellate authority has no sanction of law. Powers of CIT(A) have been set out in Section 251 of 2 the Act. Clause (a) of sub-section of Section 251 provides that in disposing of an appeal, the Commissioner (Appeal) may ‘confirm, reduce, enhance or annul the assessment’. It is pertinent to mention that earlier the CIT(A) also had the power to set aside the assessment and directing the Assessing Officer to make a fresh assessment. Such a provision came to be omitted by the Finance Act, 2001 w.e.f. 1.6.2001. Thus, the CIT(A) has instantly no power to send the matter back to the file of the Assessing Officer for making a fresh decision on the issue. He can simply confirm, reduce, enhance or annul the assessment. Since the learned CIT(A) in the instant case has transgressed the power given to him under section 251(1) by remitting the matter back to the Assessing Officer with a direction to reframe the assessment afresh, such an action cannot be countenanced. I, therefore, set aside the impugned order to this extent and uphold the portion up to which the assessment has been annulled as nothing has been brought on record to demonstrate that the Revenue has not accepted the impugned order to this extent.

In the result, the appeal is allowed.