DCIT Vs Phoenix Flexibles Private Limited (ITAT Ahmedabad)
CIT(A) Cannot Remand Without Deciding Validity of Reopening –Wrongly Branded as 144 Order – ITAT Ahmedabad Directs CIT(A) to Decide on Reopening Matter
Assessee had filed return declaring ₹4.46 lakh. Based on information of accommodation entries, AO reopened the case u/s 147 and issued notice u/s 148 on 07.04.2022. In reassessment, AO made additions of ₹48.12 lakh u/s 68 & ₹9.66 lakh u/s 69C, passing the order on 11.03.2024, wrongly citing it as an ex-parte order u/s 144 though assessee had filed replies.
CIT(A) treated the order as ex-parte & remanded the matter back to AO u/s 251(1)(a) without deciding merits or jurisdictional grounds. Revenue argued before tribunal that CIT(A) erred in setting aside when the order was not truly ex-parte. Assessee in its cross objection contended that CIT(A) failed to adjudicate its core legal challenge to reopening, i.e., invalid sanction u/s 151 & procedural lapses in issuing notice u/s 148A(b).
Tribunal observed that AO had acknowledged assessee’s compliance, hence the order was not an ex-parte one under s.144. CIT(A) wrongly relied on the label in the assessment order without examining contents. Legal grounds raised by assessee (validity of notice u/s 148, sanction u/s 151, lack of inquiry u/s 148A) were left undecided. Holding that CIT(A) cannot simply remand without deciding jurisdictional grounds, Tribunal set aside the matter back to CIT(A) with direction to adjudicate both the legal & merit issues afresh.
