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Facts
The assessee failed to file an Income Tax Return (ITR), leading to reopening of the case under Section 148 of the Act. The Assessing Officer proceeded ex-parte under Section 144 read with Section 147, making additions under Section 69A due to the assessee's failure to provide required information. The Ld. NFAC allowed the appeal under the proviso to Section 251(1) and remanded the matter for de-novo assessment.
Held
The Tribunal observed that the Ld. NFAC did not adjudicate the assessee's legal challenge regarding the non-service of a statutory notice under Section 143(2). Citing legal precedent, the Tribunal ruled that it has limited jurisdiction to decide this issue unless it has been adjudicated by the NFAC/CIT(A) first. Consequently, the Tribunal set aside the NFAC's order and remitted the file back to the NFAC with a direction to adjudicate the specific legal issue of non-service of notice under Section 143(2) according to law.
Key Issues
Whether the assessment framed under Section 144 read with Section 147 was valid without serving a statutory notice under Section 143(2), and whether the Tribunal can adjudicate this legal ground without prior decision by the First Appellate Authority.
Sections Cited
139, 148, 142(1), 133(6), 144, 147, 69A, 250, 251(1), 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: HON’BLE SHRI PAVAN KUMAR GADALE & SHRI G. D. PADMAHSHALI
Appearances Assessee by : Mr S J Kamat [‘Ld. AR’] Revenue by : Mr Ravindra Hattalli [‘Ld. DR’] Date of conclusive Hearing : 19/03/2025 Date of Pronouncement : 20/03/2025 ORDER PER G. D. PADMAHSHALI, AM; This appeal is arisen out of DIN & Order No. ITBA/NFAC/S/250/2024-25/1070686036 dt. 27/11/2024 passed by the Ld. National Faceless Appeal Centre, Delhi [for short ‘Ld. NFAC’] u/s 250 of the Income-tax Act, 1961 [for short ‘the Act’] relating to assessment year 2012-13.
ITAT-Panaji Page 1 of 4
Maga Ram Choudhary Vs ITO AY:2012-13 Succinctly stated facts of the case are that; the assessee is 2. an individual, who did not file his return of income u/s 139 of the Act. Upon the receipt of information, the case of the assessee vide notice dt. 26/03/2019 was re-opened u/s 148 of the Act. In response to notice, the assessee not only failed to file return within prescribed period but also failed to supply required information sought by the Ld. AO vide notice dt. 01/10/2019 issued u/s 142(1) of the Act. In the event, the Ld. AO summoned the information u/s 133(6) of the Act and proceeded ex-parte in the event of assessee’s failure to explain nature & source of cash deposit, taxability of bank credits and interest etc. and culminated the assessment to the best of his judgment u/s 144 r.w.s. 147 of the Act by making additions u/s 69A of the Act. Aggrieved assessee filed an appeal before the Ld. NFAC. Pursuant to proviso to section 251(1) of the Act, the Ld. NFAC allowed the appeal of the assessee by remanding the matter back to the Ld. AO for de- novo assessment. Still aggrieved by the impugned first appellate order, the assessee is in appeal before us on similar grounds.
ITAT-Panaji Page 2 of 4
Maga Ram Choudhary Vs ITO AY:2012-13 Without touching merits, the Ld. AR submitted that, the 3. assessee filed his return of income on 24/12/2019 however, without serving a statutory notice u/s 143(2) of the Act the assessment was completed u/s 144 r.w.s. 147 of the Act on 27/12/2019. Since a specific legal ground raised against non- service of statutory notice u/s 143(2) of the Act remained unadjudicated by the Ld. NFAC, the impugned order therefore is suffered, hence requires to be set-aside. Per contra, the Ld. DR averred that, the assessment in this was framed u/s 144 r.w.s. 147 of the Act, in view of proviso to section 251(1) of the Act the Ld. NFAC flawlessly adjudicated the ex-parte assessment in a best possible manner by remanding the same for de-novo adjudication.
We have heard the rival party’s submission. We note that, 4. there is much less dispute over applicability of proviso to section 251(1) of the Act in appellant’s case. However, it also noted that, while adjudicating the appeal of the appellant, the Ld. NFAC did not decide the appellant’s legal challenge against non-service of statutory notice u/s 143(2) of the Act. In the present appeal, the ITAT-Panaji Page 3 of 4
Maga Ram Choudhary Vs ITO AY:2012-13 appellant also raised the same legal ground. The question as to whether the Tribunal can adjudicate such ground which did not pass through the first appellate forum finds an answer in the recent decision of Hon’ble Delhi High Court in case of ‘Divine Infracon Pvt Ltd. Vs PCIT’ [2025, 171 taxmann.com 92 (Del)].
In view therefore, without multiplying the authority on the issue it is necessary to hold that, Tribunal has much less jurisdiction to adjudicate the legal ground challenged in the present appeal unless it is adjudicated by the Ld. NFAC/CIT(A) first. Since the impugned order is suffered by non-adjudication of legal ground challenged therein, we therefore set-aside the same on this limited score and remit the file to the Ld. NFAC with a bullet direction to adjudicate the legal issue in accordance with law.
In result, the appeal is ALLOWED for statistical purposes. 5. In terms of rule 34 of ITAT Rules, the order pronounced in the open court the date mentioned hereinbefore.