2018 (3) TMI 1446 - AT - Income Tax

Tribunal clarifies CIT(A)'s powers in setting aside matters to AO under Income Tax Act

The Tribunal held that the Ld. CIT(A) lacks the explicit power to set aside or remand matters to the AO. In a case where the Ld. CIT(A) directed the AO to ... CIT(A) power in directing the AO (TDS) to re-examine the rectification petition of the assessee - Held that:- We note that though the Ld. CIT(A) has got the power to confirm, reduce, enhance or annul the assessment, the power to set aside/remand to the AO has not been given to the Ld. CIT(A), therefore, we set aside the order of Ld. CIT(A) and in the interest of justice, remand the matter to the file of the AO and direct the AO to de novo adjudicate the issues raised by the assessee in the rectification petition filed by the assessee u/s. 154 of the Act on 14.04.2011 untramelled by any observations given while explaining the facts - the assessee may be given adequate opportunity of being heard before passing the speaking order. Appeal of revenue is allowed for statistical purposes. Issues:1. Jurisdiction of the Ld. CIT(A) to direct re-examination of rectification petition.2. Power of Ld. CIT(A) to set aside matters to the AO.Analysis:1. The main issue in this case was regarding the jurisdiction of the Ld. CIT(A) to direct the AO to re-examine the rectification petition of the assessee. The revenue contended that the Ld. CIT(A) does not have the power to set aside matters to the AO. The assessee had filed a rectification petition under section 154 of the Income Tax Act, 1961, which was summarily rejected by the AO. The Ld. CIT(A) remanded the matter back to the AO for a speaking order. The Tribunal noted that while the Ld. CIT(A) has the power to confirm, reduce, enhance, or annul the assessment, the power to set aside/remand to the AO is not explicitly granted. Therefore, the Tribunal set aside the Ld. CIT(A)'s order and remanded the matter to the AO for de novo adjudication of the issues raised by the assessee in the rectification petition.2. The second issue revolved around the power of the Ld. CIT(A) to set aside matters to the AO. The Tribunal emphasized that the Ld. CIT(A) has the authority to confirm, reduce, enhance, or annul the assessment but does not possess the power to set aside or remand matters to the AO. In this case, the Ld. CIT(A) had directed the AO to re-examine the rectification petition filed by the assessee under section 154 of the Act. The Tribunal concluded that the Ld. CIT(A)'s decision to remand the matter to the AO was beyond his jurisdiction. Therefore, the Tribunal allowed the revenue's appeal for statistical purposes, emphasizing the need for the AO to re-adjudicate the issues raised by the assessee in the rectification petition.In conclusion, the judgment focused on clarifying the jurisdictional boundaries of the Ld. CIT(A) in directing the re-examination of rectification petitions and emphasized the importance of adhering to the prescribed powers of appellate authorities in tax matters.