CIT(A) Must Decide Jurisdiction Before Remanding Reassessment to AO: ITAT Raipur

Ayush Jindal Vs ITO (ITAT Raipur)

Raipur ITAT: CIT(A) Must Decide Jurisdictional Challenge Before Remanding Reassessment to AO

The Raipur ITAT held that where an assessee specifically challenges the validity of reassessment proceedings, the CIT(A)/NFAC is duty-bound to adjudicate that jurisdictional issue first. The first appellate authority cannot bypass such a legal ground and simply remand the matter to the Assessing Officer for fresh assessment.

In the present case, the Assessing Officer reopened the assessment under sections 147/148 and, due to the assessee’s non-compliance, completed the assessment under sections 147 read with 144 and 144B, determining total income at ₹1.37 crore, comprising additions towards unexplained income, unexplained investment, interest income and estimated professional income. Before the CIT(A)/NFAC, the assessee specifically challenged the legality of the reassessment proceedings. However, instead of deciding that legal issue, the CIT(A) restored the matter to the Assessing Officer for de novo adjudication.

The Tribunal observed that this approach was legally unsustainable. Once a jurisdictional ground questioning the very validity of the reassessment is raised, the appellate authority must first determine that issue before directing any further proceedings. Accordingly, the Tribunal set aside the order of the CIT(A)/NFAC and restored the matter to the first appellate authority with a direction to first adjudicate the legal challenge to the reassessment, after granting the assessee a reasonable opportunity of hearing, and thereafter decide the matter in accordance with law. The appeal was allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT RAIPUR

This appeal filed by the assessee is directed against the order dated 21.10.2025 of the Ld. Commissioner of Income Tax, [CIT(A)] / NFAC, Delhi relating to assessment year 2017-18.

2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in dismissing the appeal filed by the assessee by upholding the reassessment proceedings initiated by the Assessing Officer and thereby confirming the income determined at Rs.1,37,60,365/-.

3. Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income. On the basis of information obtained that the assessee has made huge cash deposits of Rs.1,51,61,500/- in the bank account maintained with State Bank of India, purchased time deposits of Rs.26,543/-, received interest of Rs.21,522 and professional & technical fee of Rs.50,000/- but the assessee has not filed his return of income, the Assessing officer issued notice under section 148 of the Act, after passing an order under section 148A(d) of the Act dated 14.07.2022. The assessee neither filed any return in response to the notice issued under section 148 of the Act nor responded to statutory notices issued by the Assessing Officer for which the Assessing Officer completed the assessment under sections 147 r.w.s 144 r.w.s 144B of the Act by determining the total income at Rs.1,37,60,365/- wherein he made the following additions:

4. Before Ld. CIT(A)/NFAC, the assessee raised a legal ground challenging the validity of the reassessment proceedings. However, the Ld. CIT(A)/NFAC did not adjudicate the legal ground and remitted the matter back to the file of the Assessing Officer for denovo adjudication.

5. Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal.

6. The Ld. Counsel for the assessee at the outset submitted that the Ld. CIT(A)/NFAC without considering the legal ground raised before him has remitted the matter back to the file of the Assessing Officer, which is not correct.

7. The Ld. Sr. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-response of the assessee to the statutory notices issued by the Assessing Officer, he completed the assessment under section 147 r.w.s 144 r.w.s. 144B of the Act determining the total income of Rs.1,37,60,365/-. We find the Ld. CIT(A)/NFAC restored the matter back to the file of Assessing Officer for denovo assessment. It is the submission of the Ld. Counsel for the assessee that despite the legal ground raised by the assessee before the Ld. CIT(A)/NFAC challenging the validity of reassessment proceedings, he has not adjudicated the same and restored the matter back to the file of the Assessing Officer for denovo adjudication which is not correct. We find some force in the above argument of the Ld. Counsel for the assessee. In our opinion when the assessee has raised a legal ground before the Ld. CIT(A)/NFAC challenges the validity of the reassessment proceedings, the Ld. CIT(A)/NFAC should have adjudicated the said legal ground first. However, in the instant case, Ld. CIT(A)/NFAC has not adjudicated the same and instead has restored the matter back to the file of the Assessing Officer for denovo adjudication. Under these circumstances, we deem it proper to restore the matter back to the file of Ld. CIT(A) / NFAC with a direction to adjudicate first the legal ground raised before him. Needless to say the Ld. CIT(A)/NFAC shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

9. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 15 July, 2026.