Best judgment assessment remand upheld where denial of reasonable hearing justified setting aside and fresh consideration.

Where an assessee was denied reasonable opportunity of hearing in a best judgment assessment, the first appellate authority may set aside the assessment and remit the matter for fresh consideration if the statute so permits. The text notes that assessments under section 144 read with section 153A were challenged, but the appellate authority's finding on denial of opportunity was not displaced. It also refers to the amended section 251, effective 01.10.2024, as supporting the power to set aside and refer the matter back. The remand was upheld and the Revenue's challenge failed.

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Issues: Whether the first appellate authority could set aside a best judgment assessment and remand the matter to the Assessing Officer for fresh assessment where the assessee was found not to have been afforded reasonable opportunity of hearing.

Analysis: The assessment orders were passed under section 144 read with section 153A of the Income-tax Act, 1961. The appellate authority recorded a finding that the assessee had not been given reasonable opportunity in the assessment proceedings and, in the light of the amendment to section 251 by the Finance (No. 2) Act, 2024 with effect from 01.10.2024, exercised the power to set aside the assessment and refer the matter back for fresh consideration. The challenge by Revenue did not dislodge that finding or the appellate authority's jurisdiction to do so.

Conclusion: The remand by the first appellate authority was upheld and the appeal was decided against Revenue.

Ratio Decidendi: Where the appellate authority finds that the assessee was denied reasonable opportunity and the statute empowers it to set aside and remit a section 144 assessment, the remand order is sustainable.

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