Whether CIT(A) is Mandated to Remand the Matter to the Assessing Officer in Cases of Non-Appearance Before Lower Authority?
Introduction
The appellate process under the Income Tax Act, 1961, is meant to ensure fair assessments and correct application of law. But in reality, there are instances where the AO finalizes the order without proper participation from the assessee. In such cases, the assessee often seeks another opportunity before the AO through remand during the appeal.
The issue is – does the law make remand compulsory in such cases, or is it left to CIT(A)’s discretion?
Legal Provisions
Section 250(4) allows CIT(A) to make further inquiries if needed. Section 251(1) gives them the power to confirm, reduce, enhance, annul, or even set aside an order and send it back to the AO. Rule 46A says that if new evidence is brought up during the appeal, the AO must get a chance to examine it.
However, there is no specific provision saying that remand is mandatory just because the assessee did not appear before the AO. It depends on the facts of the case and whether principles of natural justice were followed.
What Courts Have Said
Courts have held that remand is not automatic, but it becomes necessary in certain situations, mainly where natural justice was not given or new evidence comes up during appeal.
- Tin Box Company vs CIT (2001) 249 ITR 216 (SC) – If assessment is made without giving a proper chance of hearing, the appellate authority should set aside the order and remand the case for fresh assessment.
- Kapurchand Shrimal vs CIT (1981) 131 ITR 451 (SC) – CIT(A) has a duty to correct mistakes and remit matters for proper inquiry where important facts were ignored.
- R.B. Jodha Mal Kuthiala vs CIT (1971) 82 ITR 570 (SC) – If additional evidence is filed during appeal, AO must be given a chance to verify it as per Rule 46A(3).
When Remand is Necessary
From these cases, remand becomes necessary where:
- The assessment order was passed without proper notice or opportunity to the assessee (Tin Box Company).
- The order is ex parte and lacks inquiry or reasoning (Kapurchand Shrimal).
- Fresh evidence is filed before CIT(A) and AO hasn’t seen it (Rule 46A).
When CIT(A) Can Decide Without Remand
If the assessee had enough chances before the AO but did not respond, or if the record already has all relevant details, CIT(A) can decide the case on merits without sending it back. There is no blanket rule that every ex parte order must be remanded.
Practical Takeaway
From what I’ve understood, non-appearance before the AO weakens the case and makes appeal proceedings harder. But if there was a genuine reason for absence, one can plead violation of natural justice and rely on Tin Box Company to seek remand. If you bring new evidence before CIT(A), ask for its admission under Rule 46A and remand for AO’s comments.
Conclusion
There is no law making remand mandatory in all cases where the assessee missed hearings before AO. But if the assessment was made without giving a fair opportunity or without considering key facts or new evidence, remand should be allowed to ensure justice.
For me, the biggest takeaway is that fair hearing is not just a formality – it is the foundation of a valid assessment, whether under Section 144 or 143(3).
Author Bio
