ITO Vs Deep Trading Co. (ITAT Chandigarh)
The Revenue filed an appeal against the order dated 20.02.2025 passed by the Commissioner of Income Tax (Appeals) (CIT(A)), National Faceless Appeal Centre (NFAC), Delhi, relating to the assessment year 2012-13 for Deep Trading Co. The appeal concerned a best judgment assessment made under Section 144 of the Income Tax Act, 1961, and the CIT(A)’s decision to remand the matter to the Assessing Officer (AO) under the newly inserted provision Section 251(1)(a) by the Finance Act, 2024.
The Revenue’s grounds of appeal included allegations that the CIT(A) erred in allowing the assessee’s appeal without addressing:
1. Multiple opportunities given by the AO to file a reply.
2. Justification for the assessee’s non-compliance before the AO and CIT(A).
3. The unexplained addition of ₹11,12,71,500 as cash deposits for which no source explanation was provided.
4. Reliance on past judgments, including Principal Commissioner of Income Tax-3 vs. Ashokji Chanduji Thakor, where ITAT orders were quashed and AO/CIT(A) orders restored.
No representation appeared on behalf of the assessee, and the matter was considered on the record available.
The Revenue’s principal contention was that the CIT(A) erred in remanding the assessment to the AO solely based on the newly inserted Section 251(1)(a) of the Income Tax Act. The provision, effective from 1.10.2024, states that the CIT(A), in an appeal against an assessment under Section 144, may set aside the assessment and refer the case back to the AO for a fresh assessment.
