Commissioner of Income Tax (Appeals) authorized to annul assessment order, rejects challenge on authority.

The court held that the Commissioner of Income Tax (Appeals) has the power to annul the assessment order, which is broader than setting it aside. Despite the petitioner's argument, the court rejected the contention that the CIT(A) lacks the authority to nullify or set aside the assessment order. The writ petition was closed, granting the petitioner liberty to pursue an appropriate statutory remedy, with the CIT(A) set to hear any appeal filed within three weeks on its merits, including the issue of limitation raised by the petitioner's counsel.

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Issues involved:
The judgment involves the assessment order passed u/s 147, read with Section 144 of the Income Tax Act, 1961 for Assessment Year (AY) 2016-17. The main issue is whether the Commissioner of Income Tax (Appeals) [CIT(A)] has the power to annul or set aside the assessment order.

Details of the Judgment:

Assessment Order and Escaped Income:
The Assessing Officer (AO) passed an order u/s 148A(d) followed by an assessment order dated 31.05.2023 for AY 2016-17. The AO determined that income of Rs. 30,85,500/- had escaped assessment, which included cash and jewellery brought by the petitioner from Pakistan.

Appellate Remedy:
The petitioner was advised to seek a statutory appellate remedy. The petitioner's counsel contended that under Section 251 of the Act, the appellate authority cannot set aside the assessment order. However, the court disagreed, stating that the appellate authority has the power of annulment, which is broader than setting aside.

CIT(A)'s Powers:
The court expressed a view that the appeal may not be maintainable, but the CIT(A) has wide powers to annul the assessment order if convinced by the assessee's case. Annulling the order would cancel it, returning parties to their pre-assessment order position.

Decision:
Despite the petitioner's argument, the court rejected the contention that the CIT(A) lacks the authority to nullify or set aside the assessment order. The writ petition was closed, granting liberty to the petitioner to pursue an appropriate statutory remedy. If an appeal is filed within three weeks, the CIT(A) will hear it on merits, including the issue of limitation raised by the petitioner's counsel.

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