Income Tax Act | CIT(A) Can't Remand Matter Back To AO Without Deciding Jurisdictional Validity Of S.144 Order: Delhi High Court
The Delhi High Court has made it clear that the Commissioner of Income Tax Appeals cannot remand assessment back to the Assessing Officer, unless it decides the jurisdictional validity of AO's order passed under Section 144 of the Income Tax Act 1961.Section 144 empowers the deals with the assessment of a taxpayer that is carried out by the Assessing Officer (AO) as per his best judgement...
The Delhi High Court has made it clear that the Commissioner of Income Tax Appeals cannot remand assessment back to the Assessing Officer, unless it decides the jurisdictional validity of AO's order passed under Section 144 of the Income Tax Act 1961.
Section 144 empowers the deals with the assessment of a taxpayer that is carried out by the Assessing Officer (AO) as per his best judgement and based on all relevant information gathered.
In the case at hand, the Appellant-assessee argued that the three conditions as stipulated under Section 144 of the Act were not satisfied for the AO to assume jurisdiction.
Moreover, no notice as mandatory under Section 143(2) was issued to the assessee.
The provision stipulates that the Assessing Officer, if it considers to ensure that the assessee has not understated the income, shall serve on the assessee a notice requiring him to appear or produce any evidence on which the assessee may rely in support of its return.
In these circumstances, the Appellant argued that CIT(A) could not have disposed of its appeal by simply remanding the matter back to the AO and it ought to have addressed the issue of jurisdiction first.
A similar error was committed by the ITAT, the Appellant submitted.
Agreeing, a division bench of Justices V. Kameswar Rao and Vinod Kumar held,
“ITAT does not deal with the pleas urged by the appellant before it. Even the CIT(A) without dealing with the submissions, has primarily by observing that the appellant had submitted that the assessment order was passed under Section 144 of the Act without issuing notice under Section 143(2) of the Act, has remanded the matter back to the AO.
There is no finding of the CIT(A) on the said aspect inasmuch as it ought to have to come to the conclusion whether such a notice had in fact been issued, if not what is the effect and also, in such circumstances…the matter could not have been remanded back to the AO. Similarly, the ITAT has also without deciding the issue as raised by the appellant, upheld the order passed by the CIT(A).”
The Court said that since an infirmity has arisen at the level of the CIT(A), the issue needs to be decided by the CIT(A) and not by the AO.
It accordingly set aside the orders passed by ITAT and CIT(A) and remanded the matter back to the CIT(A) to decide the appeal afresh.
Appearance: Mr. S. Krishnan, Adv. for Appellant; Mr. Vipul Agrawal, SSC, Ms. Sakashi Shairwal, JSC, Mr. Akshat Singh, JSC and Mr. Gaoraang Ranjan & Ms. Harshita, Advs. for Respondent
Case title: Akasaki Technology (P) Ltd v. Principal Commissioner Of Income Tax
Case no.: ITA 241/2025