Assessment order and Special Audit referral for an assessee remanded after denial of opportunity, directing de novo assessment

Challenge to validity of an assessment order and referral for Special Audit was predicated on procedural fairness; the tribunal remitted the matter to the assessing officer on the basis that the assessee was denied a reasonable opportunity of being heard, directing a de novo assessment to be framed. The tribunal did not decide the substantive issues on merits and indicated that a specified paragraph (Para 4) shall also apply to ongoing appellate proceedings before the Commissioner of Income Tax (Appeals); the application relating to these proceedings was disposed of accordingly.

---

---

Issues: Whether paragraph 4 of the Court's order dated 16-02-2024, which remitted the matter to the Assessing Officer for de novo assessment while keeping all rights and contentions open and holding that the appeals did not raise any substantial question of law at that stage, also applies to the related proceedings pending before the Commissioner of Income Tax (Appeals).

Analysis: The Court recalled its observation in paragraph 4 of the earlier order of 16-02-2024 which recorded that the ITAT had remanded the matter to the Assessing Officer for de novo assessment and left all rights and contentions of the assessee and Revenue open; the Court noted that one set of proceedings is currently before the Commissioner of Income Tax (Appeals) and clarified the temporal and procedural scope of its earlier direction so that the liberty and remand embodied in paragraph 4 extend to those proceedings as well.

Conclusion: Paragraph 4 of the Court's order dated 16-02-2024 shall apply to the proceedings before the Commissioner of Income Tax (Appeals); this clarification is in favour of the assessee.

---