Smt. Ritu Dhingra Vs DCIT (ITAT Chandigarh)
CIT(A) Cannot Remand on Wrong Assumption: Order Quashed and Matter Sent Back for Decision on Merits
The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) held that the CIT(A) exceeded jurisdiction by remanding the assessment on an erroneous premise that it was an ex-parte assessment under section 144, when in fact the assessment had been validly completed under section 153C read with section 143(3) after due participation by the assessee.
The Tribunal noted that the power to set aside and remand under section 251(1)(a) is strictly limited to cases where the assessment is made under section 144. Since the assessment in the present case was not ex-parte, the CIT(A) was duty-bound to adjudicate the issues on merits and could not invoke remand powers by mischaracterising the nature of the assessment.
Both the assessee and the Revenue agreed that the factual foundation adopted by the CIT(A) was incorrect. As the CIT(A) failed to examine the substantive grounds—relating to large additions under section 68 based on alleged incriminating digital material—the Tribunal quashed the CIT(A)’s order.
However, to avoid denial of appellate remedy, the ITAT restored the matter to the file of the CIT(A) with a clear direction to decide all issues on merits, after granting due opportunity of hearing and by passing a reasoned, speaking order. Consequently, both the assessee’s appeal and the Revenue’s cross-appeal were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
