CIT(A) lacks power to direct AO to reframe assessment under section 150 after finding original assessment invalid

ITAT Delhi held that CIT(A) exceeded jurisdiction by directing AO to reframe assessment under section 150 after finding the original assessment invalid due to non-issuance of notice under section 143(2). While CIT(A) correctly identified the assessment as null and void for lack of proper notice, the direction to reframe constituted setting aside the assessment, a power CIT(A) does not possess. Both the assessment order and CIT(A)'s order were quashed, with the assessee's appeal allowed.

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Issues involved:
The issues involved in this case include the jurisdiction of the CIT(A) in directing the Assessing Officer to proceed under section 150 of the Income Tax Act, 1961 and reframe the assessment order, as well as the validity of the assessment order due to lack of notice under section 143(2) of the Act.

Jurisdiction of CIT(A) - Observations of the CIT(A):
The CIT(A) had directed the Assessing Officer to proceed in terms of section 150 of the Act and reframe the assessment order, which was deemed unnecessary and beyond the CIT(A)'s jurisdiction. The CIT(A) setting aside the assessment order was considered as exceeding his powers, leading to the quashing of both the assessment order and the order of the CIT(A).

Validity of Assessment Order - Lack of Notice under Section 143(2):
The assessment in question was framed without issuing a notice under section 143(2) of the Act, rendering the assessment null and void. This fact was acknowledged by the first appellate authority, indicating that the assessment was conducted without proper jurisdiction, thereby leading to the decision to allow the appeal and quash both the assessment order and the CIT(A)'s order.

High Court Directions and Remand:
The matter had previously reached the Hon'ble High Court, which set aside the issue and remanded it back to the ITAT for fresh consideration. The High Court's findings highlighted discrepancies in the Tribunal's orders and the necessity for a fresh decision. With the consent of both parties, the impugned orders were set aside, and the matter was remanded back to the ITAT for a fresh decision, leaving the rights and contentions of all parties open.

Conclusion:
In conclusion, the appeal by the assessee was allowed based on the jurisdictional issues surrounding the CIT(A)'s directions and the lack of proper notice under section 143(2) for the assessment. The decision to quash both the assessment order and the CIT(A)'s order was made, emphasizing the importance of adhering to procedural requirements and staying within the bounds of jurisdiction. The final decision was announced in the open court on 29.11.2023.

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