TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1798
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....acts and in law; 2) The learned CIT (A) erred in not deciding the Ground No.2 i.e. validity of the notice u/s 148 of the I.T. Act when the notice u/s 148A(b) and order u/s 148A(d) were not issued by the appropriate authority; 3) The learned CIT (A) erred in confirming the action of the Assessing Officer in treating the aggregate of the deposits of Rs. 2,37,38,900/- as the income of the appellant without considering the fact that they relate to the business receipts which were all accounted for in the books of account; 4) The learned CIT (A) erred in setting aside the appeal without considering the ground that the provisions of Sec. 148 are not validly initiated; 5) Any other ground/grounds that may be urged at the time of hearing; 3. Succinctly stated, the A.O., based on information that the assessee firm during the subject year had though made cash deposits of Rs. 2,37,38,900/- in its bank account with ICICI Bank, Branch: Madhapur, but had not filed its return of income, initiated proceedings u/s 147 of the Act. 4. On a perusal of the record, the A.O. further observed that the assessee firm during the subject year had earned commission income of Rs. 90,088/-. Considering....
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....ought on record were not available with the A.O. on account of absolute non-compliance of the appellant during assessment proceedings. The absolute non-compliance attitude of the appellant has compelled the AO to complete assessment on the basis of documents or details available on records. As the AO was not having benefit of the documents which have been filed during appellate proceedings, the AO is being directed to re-examine the claims of the appellant in the light of the submissions made at the time of appeal proceedings in regards to the grounds of appeal raised and re-verify the claims which weren't produced before the AO by the appellant and allow credits as applicable and permissible as per law. Since, the above facts and documents/evidences remained to be examined by the AO, the present appeal is being set aside to the file of the AO with the directions to consider the same during the set-aside proceedings. In view of the aforesaid observations, facts and circumstances of the present case, I have perused the relevant documents/records available with the undersigned, the present appeal needs to be set aside to the file of the AO for fresh adjudication. As the present a....
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....of appeal No. 2" that was raised before the CIT(A), had specifically assailed the validity of jurisdiction that was assumed by the AO for initiating the reassessment proceedings. For the sake of clarity, the "Ground of appeal No.2" raised by the assessee company before the CIT(A) is being culled out as under: "1. The Assessing Officer who issued notice u/s 148A(b), order u/s 148(d) and notice u/s 148 has no jurisdiction and, therefore, the order passed u/s 144 is not valid." 12. Admittedly, the legislature in all its wisdom had vide the Finance (No.2) Act 2024 w.e.f. 01.10.2024 inserted the "Proviso" to section 251(1)(a) of the Act, as per which the CIT(A) has been vested with the power to set-aside the assessment and refer the case back to the AO for making afresh the assessment, in a case, where the appeal filed before him is against the order of assessment made u/s 144 of the Act. For the sake of clarity, section 251(1) is culled out as under: "251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers - (a) In an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment. Provided that where such a....
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....Commissioner (Appeals) shall be empowered to set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment.". Although the "Proviso" to Section 251(1) is an enabling proviso that further vests jurisdiction with the CIT(A) to set-aside a best judgment assessment order, but, the same cannot be construed in a manner that the same, inter alia, takes away his power to annul an assessment or reassessment which is framed in absence of valid assumption of jurisdiction by the A.O. As a word of caution, if a best judgment assessment or reassessment framed u/s 144 of the Act, despite an invalid assumption of jurisdiction by the A.O is set aside and referred back to his file by the CIT(A) for framing of a fresh assessment, then, impliedly the lack of jurisdiction by the A.O will be given a go by and the challenge of the assessee- appellant to the validity of the assumption of jurisdiction would stand frustrated. We are of the firm conviction that the purpose of insertion of the "Proviso" to Section 251(1) by the legislature vide the Finance (No.2) Act, 2024 w.e.f 01.10.2024 can by no means be stretched to the extent of using it for validating an asses....
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....d 20.09.2024 to his file with a direction to decide the same after disposing of the quantum appeal of the assessee firm. 19. Resultantly, the appeal filed by the assessee firm is allowed on the same terms for statistical purposes. ITA NO.631/HYD/2025 20. We shall now deal with the appeal filed by the assessee firm in ITA No. 631/Hyd/2025, which in turn arises from the order passed by the A.O. under Section 271(1)(b) of the Act. The assessee firm has assailed the impugned order on the following grounds of appeal before us: "1) The order of the learned CIT (A) is erroneous both on facts and in law; 2) The learned CIT (A) erred in holding that the notice u/s 148A(b) is validly issued when the Hon'ble Telangana High Court held that the jurisdictional Assessing Officer has no jurisdiction to issue such notice; 3) The learned CIT (A) erred in confirming the penalty of Rs. 20,000/- levied u/s 271(1)(b) of the I.T.Act. 4) Any other ground/grounds that may be urged at the time of hearing." 21. Succinctly stated, the A.O., based on the fact that the assessee firm had failed to respond to the notice(s) u/s 142(1) of the Act, dated 23.08.2023 and 15-09-2023, initiated penalty p....
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....necessary evidences for receipts and also P & L account. The appellant further contended that the Assessing officer ought to have considered that there is a substantial compliance to the notices issued during the course of assessment proceeding by furnishing the details required by AO. From the above facts of the instant appeal, it is noticed that Ld. AO has allowed sufficient opportunities to the appellant by issue of initiating of penalty notice u/s. 271(1)(b) dated 04.03.2024 for non-compliance of the notice u/s. 142(1) of the IT Act 1961 dated 23.08.2023 and 15.09.2023., however the appellant has not made any compliance of such statutory notices. Apart from this, during penalty proceedings, three show cause notices were issued. Even then, appellant didn't deem it fit to respond. All notices were sent on e-mail ID of the appellant registered on e-filing portal as per the ITBA system of department and delivered to appellant via e-mail. However, like earlier, the appellant had made absolute non-compliance attitude & failed to submit any response till the date of passing of the penalty order dated 24.08.2024 passed u/s 271(1)(b). It is clear that the appellant has failed to o....