Best judgment reassessment under faceless assessment can be remanded by the appellate authority where non-compliance persists.

A reassessment completed in the faceless regime was treated as a best judgment assessment because the assessee repeatedly failed to comply with notices under section 142(1) and did not effectively to the show cause notice. On that footing, the first appellate authority's power under the amended proviso to section 251(1)(a), effective from 01.10.2024, was available because the appeal arose from an order falling within section 144. The appellate authority could therefore set aside the assessment and remit the matter to the Assessing Officer for fresh determination, and the Revenue's challenge failed.

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Issues: (i) Whether, in an appeal arising from a reassessment framed in the faceless regime, the first appellate authority could set aside the matter to the Assessing Officer for fresh determination on the footing that the reassessment was in substance a best judgment assessment under section 144 of the Income-tax Act, 1961.

Analysis: The reassessment record showed repeated non-compliance with notices issued under section 142(1), partial responses only, and no effective reply to the show cause notice issued before completion of assessment. The assessment was framed under section 147 read with section 144B, but the substantive character of the proceedings was best judgment reassessment because of the assessee's failure to comply with the statutory notices and the consequential resort to section 144 procedure. In that setting, the appellate authority's power under the proviso to section 251(1)(a), as amended with effect from 01.10.2024, was attracted because the appeal was against an order that fell within section 144.

Conclusion: The first appellate authority was empowered to set aside the matter and refer it back to the Assessing Officer for fresh assessment, and the Revenue's challenge failed.

Final Conclusion: The appeal was rejected because the reassessment was treated as a best judgment assessment under the faceless assessment framework, thereby sustaining the appellate authority's remand to the Assessing Officer.

Ratio Decidendi: Where a reassessment completed under the faceless procedure is, in substance, a best judgment assessment owing to sustained non-compliance by the assessee, the appellate authority may invoke the amended section 251(1)(a) to set aside the assessment and remit the matter for fresh adjudication.

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