INCOME TAX OFFICER, KAKINADA vs. ANDHRA PRADESH UNITED TEACHERS FEDERATION, KAKINADA

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I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation 3. During the course of the assessment proceedings, the A.O. observed that the assessee, during the subject year, had made cash deposits of Rs. 79,76,913/- in its bank account nos. 000555 and 000059 held with Kakinada Cooperative Town Bank Limited. On being queried, the assessee failed to come forth with the requisite details as were called for by the AO and sought further time. The A.O. based on the fact that the assessee had failed to come forth with any explanation regarding the source of the cash deposits of Rs. 79,76,913/-, made an addition of the entire amount by treating the same as having been sourced out of its unexplained money under section 69A of the Act. Accordingly, the A.O., vide his order passed under section 147 r.w.s. 144B of the Act, dated 22.03.2024, determined the income of the assessee-society at Rs. 82,26,363/-.

“7. Decision: I have carefully considered the ex-parte assessment/reassessment order, statement of facts, grounds of appeal and submissions furnished during the appellate proceedings. The appellant is a registered society engaged in the welfare of its members. During the relevant previous year, it received Rs 79,76,913/- in the form of donations for the specific purpose of constructing its building "Employees Home." The AO held that these donations were unexplained money within the meaning of section 69A and accordingly added them to the total income. The AO further applied section 115BBE to tax the same at a higher rate.

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I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation The appellant contended that all donations were duly receipted, routed through banking channels, collected by authorised committees, and supported by resolutions and utilisation details. It was also submitted that the donations were for a specific sanctioned purpose and could not be treated as unexplained money. The appellant further submitted that due to unavoidable academic duties of the executive committee, it could not submit a full response to the final notice. (i) It is observed that: • The appellant has produced prima facie evidence to demonstrate the source, purpose, and utilisation of the donations. • There is nothing on record to indicate that the AO has examined the donation receipts, resolutions, or bank statements in detail before concluding the addition. • The principle of natural justice requires that adequate opportunity be granted to the assessee to furnish explanations and supporting evidence. The record shows that although the first notice under section 142(1) was issued much earlier, the crucial final notice came during a period when the appellant's office-bearers were engaged in official examination duties. • The submissions made earlier under section 142(1) appear to have been disregarded without discussion in the assessment order. (ii) Considering the above and in the interest of justice, I am of the view that the matter requires fresh examination at the level of the AO after granting adequate opportunity to the appellant to produce all relevant evidence. It would best serve in the interest of justice if the appellant gets another chance to represent his case before Ld. AO and thereupon Ld. AO can verify the submission of the appellant and conduct necessary enquiries to gather material for a true and correct estimation of income of the appellant. (iii) As per the newly inserted proviso to section 251(1)(a) of the Act, Commissioner (Appeals) in case of order of assessment made u/s. 144 of the Act, may set aside such assessment and refer the case back to the Ld.

Page. No 4 I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation AO for making a fresh assessment. This proviso has been inserted in the Act w.e.f. 1.10.2024. The said proviso to section 251(1)(a) of the Act is reproduced as under: "251. (1) In disposing of an appeal, the Commissioner (Appeals)] shall have the following powers— in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; [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 assessment; (iv) Thus, as per the new provisions coming into effect from 01.10.2024 the CIT(A) have been granted powers to set-aside assessments to Ld. AO in cases where assessment order has been issued u/s 144. As in the present case the assessment order has been issued u/s 144 by the Ld. AO and there are issues which need to be further examined and investigated by the Ld. AO, it's a fit case for set-aside of assessment made by the Ld. AO. In view of the above facts and changes in the Act, as enumerated above, it is felt that the consideration of the submissions filed by the appellant for the first time in the appellate proceedings, are germane to the correct appreciation of the issues under deliberation. (v) Therefore, the assessment order passed by the Ld. AO dated 22.03.2024 passed u/s. 147 r.w.s 144 is hereby set aside for making fresh assessment, de-novo, after taking into account the above submissions filed by the appellant. Needless to say that the Ld. AO should, while conducting the set aside proceedings, give proper opportunities of representation to the appellant in view of principles of natural justice and take into account any further submissions which it has to file during the course of the said proceedings. The Ld. AO should also conduct all necessary enquiries to verify the submissions filed by the appellant. The appellant is also directed to comply with all the notices/correspondences issued by the Ld. AO. (vi) Therefore, all grounds filed by the appellant are thus remanded to the Ld. AO and the case is set aside for re-adjudication by the Ld. AO afresh.

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I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation 5. The Revenue, aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

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I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation to the “first proviso” to Section 251(1)(a) of the Act. The Ld. DR submitted that as the CIT(A) had grossly erred in law and facts of the case in traversing beyond the scope of his limited jurisdiction as contemplated in the “first Proviso” of section 251(1)(a) of the Act, which circumscribed his jurisdiction to set-aside the assessment order back to the file of the A.O for framing of a fresh assessment only in a case where the order of assessment was made under section 144 of the Act, therefore, the order so passed by him wherein he had set-aside the assessment order passed by the AO under Section 147 r.w.s 144B of the Act cannot be sustained and is liable to be set-aside.

8. Per Contra, Shri P. Subrahmanyam, Advocate, Learned Authorized Representative (for short “Ld.AR”) for the assessee, relied upon the orders of the CIT(A).

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I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation assessment. Insofar, the vesting of jurisdiction with the CIT(A) for setting aside the assessment order passed by the A.O under section 144 of the Act, back to his file with a direction to frame a fresh assessment is concerned, there is no dispute. The controversy involved in the present appeal hinges around the aspect that the CIT(A) had set-aside the order passed by the A.O under section 147 r.w.s. 144B of the Act, dated 22.03.2024, to his file with a direction for making a fresh assessment, de novo, after taking into account the submissions that would be filed by the assessee in the course of the set aside proceedings before him.

I.T.A.No.609/VIZ/2025 Andhra Pradesh United Teachers Federation the CIT(A) had formed the genesis for the setting aside of the order of the assessment to the file of the AO with a direction to frame a fresh assessment.

Order pronounced in the open court on 18th February, 2026.