Loading judgment…
Facts
The Revenue appealed the order of the CIT(A) who had set aside the assessment order passed under section 153A/144 of the Income Tax Act, 1961, and remanded the matter for fresh assessment. The assessee contended that notices were sent to an old address and that they did not receive adequate opportunity of hearing. The assessment order included additions for speculative business income and unexplained cash deposits.
Held
The Tribunal upheld the order of the CIT(A), finding no infirmity in exercising the power under Section 251 of the Act. The Tribunal considered the assessee's explanation regarding the notices being sent to an incorrect address and concluded that the CIT(A)'s decision to set aside the assessment and remand it for fresh assessment was justified, upholding the principle of natural justice.
Key Issues
Whether the CIT(A) was justified in setting aside the assessment order and remanding the case back to the Assessing Officer for fresh assessment.
Sections Cited
153A, 144, 69A, 251
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH ‘DB’ AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH
These two appeals by the Revenue are directed against the order of the Ld. Commissioner of Income Tax(Appeals)-IV, Kanpur, both dated 20.11.2024, arising out of assessment order passed u/s 153A/144 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’), dated 27.07.2021 for Assessment Year 2018-19 and dated 30.07.2021 for Assessment Year 2019-20, respectively.
Since identical and similar issues are involved in both the appeals and were heard together, therefore, these are being disposed of by this common order for the sake of convenience and brevity. First, we shall take up Assessment Year 2018-19.
Brief facts of the case:- In this case no original return of income was e-filed by the assessee for the AY 2018-19. A search and seizure action u/s 132(1) of the act was carried out on 19.07.2018 on R.S. Bullion and Jewellers Group of cases at Mathura, Agra, Delhi and Mumbai. Warrant of authorization, issued in the name of assessee, was duly executed and panchnama was drawn. The case of the assessee was centralized and notice u/s 153A of the Act was issued on 07.03.2020 to return of income. The assessee failed to furnish the return of income in response to said notice.
Further, as per the details mentioned in the assessment order, the notices were issued to the assessee but he did not comply with the same. During the search and seizure proceedings, several documents and noteooks were seized were code named LP-1 and BK 1 to 4. The Assessing Officer discussed the details of transactions as appearing in the said seized documents in the assessment order and noted that these are related to betting/satta to various cricket matches. The Assessing Officer also noted that no reply was received from the assessee to various show-cause notices which were issued to him from time to time and the Assessing Officer completed the assessment u/s 144 r.s. 153A of the Act on 27.07.2021 at a total income of Rs.7,28,72,427/- which included income on account of betting/satta cricket of Rs.7,01,52,482/- and Rs.27,19,945/- towards unexplained cash deposit in the bank account u/s 69A of the Act.
Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) noted the submission of the assessee that notice issued during the course of assessment proceedings were sent to the address which belonged to the mother of the assessee and was sold even before notice u/s 153A of the Act was issued. The ld. CIT(A) considering the same and in the interest of justice and by virtue of exercising the power of section 251 of the Act (as amended by the Finance Act, 2024 w.e.f.
01.10.2024), set-aside the assessment made u/s 144 r.w.s. 153A of the Act on 27.07.2021 and remanded back the matter to the file of Assessing Officer for making fresh assessment.
Aggrieved with the said order of the ld. CIT(A), the Revenue is in appeal before us. The ld. CIT-DR contended that the above action of the ld. CIT(A) in setting-aside the assessment order and remanding back the case to the file of the Assessing Officer for making fresh assessment without their being any reasonable ground as brought on record for non-compliance by the assessee during the assessment proceedings was not as per law and the same should be reversed. In this regard, the Department has filed statement of facts and grounds of appeal which are reproduced as under:-
Statement of facts
“In the case, assessment order has been passed under section 153A/144 of the I.T.Act, 1961 for the A.Y. 2018-19 dated 27.07.2021 by making aggregate addition of Rs.7,01,52,482/- towards speculative business income of the assessee & addition of Rs.27,19,945/- towards cash deposits and credit entry in the bank account. The assessee preferred an appeal before Id CIT(A). The ld CIT(A) vide his order dated 20.11.2024 has set-aside the case back to the assessing officer for making a fresh assessment. In the order, the ld. CIT(A)-IV, Kanpur who vide his order No.CIT(A)-IN/KNP/ 11059/2017-18 dated 20.11.2024 set aside the case with the following opinion:- "I have carefully considered the assessment order, the grounds of appeal and submission filed by the assessee and in the light of proviso to section 251 of the Act and the legal position the assessee had requested that the assessment order may be set aside having been passed without adequate opportunity of hearing at the stage of assessment. I am of the considered opinion, that the assessee's case required to be examined afresh on merits. In the interest of justice and considering the above and also be virtue of exercising the powers conferred upon the Commissioner of Income Tax (Appeals) under section 251 of the IT Act (as amended by the Finance Act, 2024 w.e.f. 01.10.2024), the assessment made u/s 144 r.w.s. 153A on 27.07.2021 is hereby set-aside and the case is referred back to the Assessing officer for making a fresh assessment." The order of the Ld CIT(A) is not acceptable as the Ld CIT(A) in his order has mentioned that the assessee had requested that the assessment order may be set-aside having been passed without adequate opportunity of hearing at the stage of assessment. From perusal of the assessment order and it is ample clear that during the entire assessment proceedings, the AO has issued numbers of statutory notices to the assessee, but the assessee remained non responsive and has not filed any reply in compliance to these notices. Further the assessee did not file reply in response to the final show cause. From the above, it is clear that there is no violation of natural justice as sufficient opportunities have been provided to the assessee to file his reply. It is his responsibilities to complete the assessment proceedings of all cases on fixed time barring date, due this facts, the AO prepare the time management for complete the assessment proceedings by providing sufficient opportunities to safe guard the right of natural justice for every assessee. The order of the Ld. CIT(A)-IV, Kanpur is not acceptable in principle and also looking to the tax effect involved in this case is above monetary limit prescribed by the Hon ble CBDT's circular No.05/2024 dated 15.03.2024 and further amended by the Hon'ble CBDT's circular No.09/2024 dated 17.09.2024 for filing an appeal before the Hon ble ITAT. Therefore, further appeal to the Hon'ble ITAT is recommended in this case.” Grounds of Appeal
1. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-4, Kanpur has erred in setting aside the case and referring back to the file of the Assessing Officer for making fresh assessment, ignoring the facts that the Assessing Officer while making the assessment has provided sufficient opportunities of being heard to the assessee by issuing number of statutory notices including final show cause notice dated 20.05.2021.
2. Whether on facts and circumstances of the case and in law. Ld. CIT(A)-4, Kanpur has erred in accepting the plea of the assessee while setting aside the case, without there being any reasonable ground as brought on record for non-compliance by the assessee during the assessment proceedings.
3. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-4, Kanpur has erred in setting aside the case, without appreciating the facts that the Assessing Officer has passed the assessment order after thoroughly examining and analysing the seized material and proper appreciation of facts. The restoration of the case to the file of the Assessing Officer for making fresh assessment without narrating any reasonable ground for failure on the part of the assessee is not in accordance with the intent and spirit of provisions contained in section 144 of the Act.
4. Whether on facts and circumstances of the case and in law, Ld. CTT(A)-4, Kanpur has erred in setting aside the case disregarding the fact that final show cause notice provides the assessee to respond to the AO on proposed findings and additions. Failure on the part of the assessee in responding the statutory notices without any reasonable grounds, has resulted the assessment u/s 144 of the Act.
5. That the appellant craves leave to add, modify, amend or delete any of the grounds of appeal
at the time of hearing and all the above grounds are without prejudice to each other.”
6. The ld. CIT(DR) supported the statement of facts and the grounds of appeal filed by the Department. The ld. AR supported the order of the Ld.
CIT(A).
We have heard both the parties and perused the materials available on record. The issue involved in the appeal is whether the action of the Ld. CIT(A) to remand the matter back to the Assessing Officer in the present case is justified or not. As submitted by the assessee before the Ld. CIT(A) that notice of hearing and the show causes notices issued by the Assessing Officer during the course of assessment proceedings were sent to the address which belonged to the mother of the assessee and was sold even before notice u/s 153A of the Act was issued. Considering the explanation of the assessee before the ld. CIT(A), we do not find any infirmity in the order of the ld. CIT(A) in exercising the power of section 251 of the Act (as amended by the Finance Act, 2024 w.e.f. 01.10.2024), setting aside the assessment made u/s 144 r.w.s. 153A of the Act on 27.07.2021 and remanding back the matter to the file of Assessing Officer for making fresh assessment. Accordingly, the said order of the ld. CIT(A) is upheld and the appeal of the Revenue is dismissed. are similar to grounds raised in decided by us in earlier part of this order. Therefore, our above decision would apply mutatis-mutandis to this appeal also. Accordingly, this appeal of the Revenue is also dismissed.
In the result, the appeals of the Revenue for both the Assessment Years are dismissed.
Order pronounced in the open court on 20th June, 2025.