2025 (6) TMI 1039 - AT - Income Tax

Income Tax Appellate Tribunal Upholds Taxpayer Rights, Affirms CIT(A)'s Remand Powers Under Recent Legislative Changes

ITAT Agra dismissed Revenue's appeals challenging CIT(A)'s orders setting aside assessment orders for AYs 2013-14 and 2014-15. The Tribunal upheld ... Power of CIT(Appeals) to remand the matter back to the AO in a case when the assessment order is passed u/s.144 - HELD THAT:- DR has not disputed that the Finance (No.2) Act, 2024 has empowered CIT(Appeals) w.e.f. from the said amendment, i.e., from 01.10.2024 that the first appellate authority may set aside the assessment order and is also empowered to refer the case back to the AO for making fresh assessment in case of an appeal against the order of assessment passed u/s.144 of the Act. It is also not disputed that the said assessment orders have been passed u/s. 144 r/w section 153A of the Act. A perusal of the impugned orders reveals that the CIT(Appeals) has categorically found that the assessee was not afforded reasonable opportunity of hearing in the assessment proceedings. We, therefore, do not deem it just and proper to interfere in the wisdom of CIT(A) in referring the case to the AO back when the authority has made such orders after concluding that the principles of natural justice have not been complied with. Said issue is accordingly decided against the appellant/Revenue. The Appellate Tribunal (ITAT Agra) dismissed Revenue's appeals challenging the CIT(A)'s orders that set aside assessment orders passed under sections 153A and 144 of the Income-tax Act, 1961 for AYs 2013-14 and 2014-15. The key issue was whether the CIT(A) is empowered, post the Finance (No. 2) Act, 2024 amendment effective 01.10.2024, to remand cases back to the Assessing Officer after an assessment under section 144. The Tribunal affirmed that the amendment empowers the first appellate authority to 'set aside the assessment order and... refer the case back to the Assessing Officer for making fresh assessment.' Since the CIT(A) found that the assessee was denied 'reasonable opportunity of hearing' violating 'the principles of natural justice,' the Tribunal upheld the remand, stating it would not interfere with such a finding. The appeals were dismissed accordingly.