Jyoti Multipurpose Souharda Sangh Niyamit Vs ITO (ITAT Panaji)
NFAC Ignored New s.251 Mandate— Best-Judgment Assessment Must Be Remanded- ITAT Panaji Sends 144 Assessment Back for De-Novo Redo
Assessee, a multipurpose co-operative society, filed return declaring NIL income. Scrutiny assessment was completed ex-parte u/s 144 on 20.03.2024 assessing total income at Rs.1,54,93,137/-. Aggrieved, Assessee appealed to NFAC. CIT(A)/NFAC issued three notices dated 12.08.2024, 11.02.2025 & 19.02.2025 through the ITBA portal, but due to non-appearance & non-compliance, NFAC dismissed the appeal ex-parte for non-prosecution without adjudicating merits.
Delay of 43 days in filing appeal before Tribunal was supported by affidavit & condoned in view of decisions in Vijay Vishin Meghani (398 ITR 250) & Collector, Land Acquisition v. Katiji (167 ITR 5).
Tribunal examined the amended statutory scheme of s.251(1) w.e.f. 01.10.2024. It held that when the assessment impugned before CIT(A) is a best-judgment assessment u/s 144, the newly inserted proviso mandates the first appellate authority to set aside the assessment & remand it to AO for de-novo assessment. Tribunal observed that NFAC completely overlooked this statutory mandate & instead dismissed the appeal for non-prosecution, which is not permissible in law.
Relying on the Supreme Court in Chandra Kishore Jha v. Mahavir Prasad (1999 8 SCC 266), Tribunal held that when statute prescribes a particular manner, it must be followed in that manner only. NFAC’s action also violated the requirement of a speaking order u/s 250(6). Tribunal therefore set aside the NFAC order & restored the appeal to its stage of institution with a direction to dispose it de-novo strictly in accordance with amended s.251 & to pass a reasoned order. Appeal allowed for statistical purposes.
