Harjeet Kaur Vs Circle (ITAT Delhi)
CIT(A) Cannot Set Aside After Favorable Remand: Delhi ITAT Quashes Section 144 Assessment and Deletes Massive Cash Deposit Additions
The Delhi Bench of the ITAT allowed the appeal of Harjeet Kaur (AY 2017-18) and quashed both the CIT(A)’s set-aside order and the original best-judgment assessment under section 144, holding that once additional evidence is admitted and a detailed remand report is obtained, the CIT(A) is duty-bound to decide the appeal on merits and cannot give a “fresh lease of life” to the Assessing Officer.
The Tribunal noted that during remand proceedings, the AO categorically accepted that:
- One bank account (₹1.49 crore deposits) did not belong to the assessee at all,
- Cash deposits in the assessee’s bank account were out of recorded cash sales, duly supported by books, branch-wise sales details and cash balances, and
- On test-check of books, no defects or discrepancies were found, making rejection of books and estimation of profit at 8% wholly unjustified.
Despite these clear findings, the CIT(A) set aside the assessment invoking the proviso to section 251(1)(a). The ITAT held that this power cannot be exercised after full remand verification, especially when the remand report favours the assessee. Such use of set-aside powers would undermine finality of appellate proceedings.
Accordingly, the ITAT deleted all additions relating to cash deposits and estimated profits, quashed the assessment itself, and ruled that the remand report was conclusive enough to grant relief, reinforcing that appellate authorities must adjudicate rather than remand endlessly.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the order dated 28.02.2025 of the Ld. National Faceless Appeal Centre (NFAC) (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1073811772(1)arising out of the order dated 07.11.2019 u/s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ACIT, Circle 5(1) for AY: 2017-18.
