ITO Vs Rakesh Nagpal (ITAT Chandigarh)
Power to Remand Limited to Best Judgment Cases u/s 144, Not 143(3); CIT(A) – Exceeded Power- ITAT Chandigarh
In these appeals, Revenue challenged the orders of CIT(A), Fatehabad, relating to assessment & penalty proceedings. The assessment order for AY 2018-19 had been passed u/s 143(3) r.w.s. 144B on 22.09.2021. Subsequently, penalty u/s 270A(2) was imposed. CIT(A), however, set aside the assessment order, invoking powers u/s 251(1)(a) & consequently cancelled the penalty.
Tribunal observed that the proviso to section 251(1)(a) empowers CIT(A) to set aside an assessment & remand it back to AO only when the order has been passed ex-parte or to the best of judgment u/s 144. In the present case, the assessment was passed u/s 143(3) after hearing the assessee & therefore was not an ex-parte order. Accordingly, CIT(A) had no jurisdiction to annul or remand the assessment; instead, he ought to have adjudicated the appeal on merits.
On this reasoning, ITAT allowed Revenue’s appeals. It set aside CIT(A)’s order & restored the matter back to CIT(A) with a direction to decide the appeal on merits within six months, noting that the matter had already been pending since November 2021. Since the penalty u/s 270A was dependent on the outcome of the quantum proceedings, that issue too was restored to CIT(A) for fresh decision after adjudication of the assessment appeal.
