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Facts
The Revenue appealed against the order of the CIT(A) who had set aside the assessment order passed u/s 144. The assessee had not complied with various notices issued by the Assessing Officer, leading to a best judgment assessment. The CIT(A) set aside the assessment based on powers under Section 251(1)(a) of the Act, directing a fresh assessment.
Held
The Tribunal found no reason to interfere with the order of the CIT(A) who had rightly invoked powers under Section 251(1)(a) to set aside the best judgment assessment and direct a fresh assessment. The grounds raised by the Revenue were dismissed.
Key Issues
Whether the CIT(A) was justified in setting aside a best judgment assessment order and remanding the case for fresh assessment, considering the assessee's non-compliance with statutory notices.
Sections Cited
144, 153C, 143(2), 142(1), 68, 251(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI SATBEER SINGH GODARA, & SHRI NAVEEN CHANDRA
This appeal by the Revenue is directed against the order of the ld.
CIT(A)-3, Noida dated 18.10.2024 pertaining to A.Y 2020-21.
The grievances raised by the Revenue reads as under:
“1. 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.
2. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-3, Noida has erred 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)-3, Noida has erred in setting aside the case disregarding the facts that final show cause notice which is an important notice that provides the assessee to respond to the AO's 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 on the basis of best judgement and material available on record.
4. Whether on facts and circumstances of the case and in law, Ld. CIT(A)-3, Noida has erred in setting aside the case and referring back to the file of the Assessing Officer for making fresh assessment as per provisions of law and in observing that no separate adjudication is required to be made on various grounds of appeal, without appreciating the fact 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 22.09.2021.”
In this case assessment proceedings were completed u/s 153C r.w.s. 144 of the Income Tax Act, 1961. The Assessing Officer in the assessment order observed that notice u/s 143(2) was issued on 28.06.2021 but no compliance was made and further notices u/s 142(1)
Page 2 of 5 made. The Assessing Officer has further observed that show cause notice was issued to the assessee on 22.09.2021 but again no compliance was made. Therefore, the Assessing Officer proceeded to make addition of Rs. 7,39,100/- on account of unexplained cash, Rs. 15,18,683/- on account of commission earned and protective addition of Rs.
15,18,68,305/- on account of bogus purchase u/s 68 of the Act in the hands of the assessee and the case was assessed u/s 144 of the Act.
Aggrieved, the assessee went in appeal before the ld. CIT(A).
After considering the facts and submissions, the ld. CIT(A) referred to section 251(1) of the Act which reads as under:
Section 251(1)(a) amended with effect from 01.10.2024 reads as under:- 251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers- (a) 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]
Thereafter, the ld. CIT(A) came to a conclusion and held as under:
“In accordance with the powers granted under section 251(1)(a), the assessment in the case under consideration is set aside with direction to the AO to make a fresh assessment as per provisions of law. Accordingly, the assessment is set-aside. As the matter has been set-aside; no separate adjudication is required to be made on various grounds of appeal
.”
7. None appeared on behalf of the assessee. We proceeded to decide ex-parte qua the assessee.
We have heard the submissions of the ld DR and have perused the relevant material on record. At the very outset, we find that the ld. CIT(A) has set aside the case to the file of the Assessing Officer as the Assessing Officer has made assessment u/s 144 of the Act on the basis of his best judgment and material available on record. In such a situation the CIT(A) has invoked his powers u/s 251(1)(a) of the Act. We find no reason to interfere with the decision of the ld. CIT(A). Accordingly, we dismiss the grounds raised by the Revenue. dismissed.
Order pronounced in open court on 20.08.2025.