2026 (2) TMI 1117 - AT - Income Tax

Validity of reopening: appellate authority must decide contested jurisdictional objections rather than summarily remitting the assessment.

Where the assessee specifically contested the legality of reopening and the validity of the notice, the appellate authority must adjudicate those ... Reopening of assessment u/s 147 - CIT(A) setting aside the assessment order passed u/s 147 r.w.s. 144 issued by the Ld. AO without adjudicating the legal grounds - HELD THAT:- CIT(A) has not decided the jurisdictional and legal grounds and has simply set aside the order of AO and referred the case back to AO for making a fresh assessment. As decided in case of Eyegear Optics India Pvt. Ltd. [2025 (6) TMI 388 - ITAT HYDERABAD] held that where assessment was reopened in case of assessee u/s 147 and was completed u/s 144 disallowing some expenditures, CIT(A) instead of summarily setting aside matter to the file of AO for making fresh assessment, ought to have taken a call as regards specific ground based on which validity of jurisdiction that was assumed by AO or framing reassessment was assailed by assessee before him. Tribunal set aside the order of CIT(A) and restored the matter to his file with a direction to adjudicate the specific jurisdictional ground. We set aside the order of CIT(A) and remand the matter back to his file with a direction to decide the appeal afresh by adjudicating of the grounds including the jurisdictional and legal grounds raised by the appellant before him after providing reasonable opportunity of being heard to assessee. Issues: Whether the Commissioner of Income-tax (Appeals) erred in setting aside an assessment completed under section 144 r.w.s. 147 of the Income-tax Act, 1961 and remanding the matter to the Assessing Officer without adjudicating the substantive jurisdictional and legal grounds (including validity of reopening under section 147 and notice under section 148) raised by the assessee.Analysis: The Tribunal noted that the assessee had raised specific jurisdictional and legal grounds before the CIT(A) challenging the validity of reopening under section 147 and issuance of notice under section 148, along with related grounds contesting jurisdictional approvals and procedural defects. The CIT(A) set aside the AO's best judgment assessment under section 144 and remanded the matter for fresh assessment relying on the amended section 251(1) power to set aside orders. Coordinate Benches have held that where jurisdictional validity of reopening is specifically contested before the first appellate authority, the CIT(A) should adjudicate those grounds rather than summarily remanding the matter; if the CIT(A) does not adjudicate such contested grounds, the matter should be remitted back to the CIT(A) with direction to decide those grounds after giving opportunity of hearing.Conclusion: The CIT(A)'s order is set aside and the matter is remitted to the file of the CIT(A) with a direction to adjudicate the jurisdictional and legal grounds raised by the assessee (including validity of reopening under section 147 and notice under section 148) after providing reasonable opportunity of hearing to the assessee; the appeal is allowed for statistical purposes in favour of the assessee.