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Judgment
PER MANISH AGARWAL, AM:
The present appeal is filed by the Revenue against the order dated 13.10.2025 of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2017-18/10051584 passed u/s 250 of the Income Tax Act, 1961 [“the Act” in short] arising out of assessment order dated 19.04.2021 passed u/s 143(3) pertaining to Assessment Year 2018-19.
The Revenue has raised following grounds of appeals:
“I. Whether the Ld. CIT(A), NFAC has erred in law and on facts in mis-interpreting the section 251(1)(a) of the Income Tax Act, 1961 as the same only allows setting aside the assessment orders wherein order has been passed under section 144 of the Income Tax Act, 1961.
II. Whether the Ld. CIT(A) has failed to adjudicate the appeal on merits despite availability of complete material on record.”
None appeared for the assessee and ld. Sr. DR appeared for the revenue.
Before us, ld. Sr. DR submits that the assessment order was passed u/s 143(3) of the Act however, the ld. CIT(A) has allowed the appeal of the assessee for statistical purposes by remand it back to the file of AO as the assessee has stated that no proper opportunity was granted by the AO. Ld. Sr DR submits that since the assessment order was passed u/s 143(3) of the Act thus, ld. CIT(A) has no power to set aside the same. Ld. Sr. Dr submits that as per section 251(1)(a) of the Act, as amended by Finance Act No.2, 2024, power granted to CIT(A) to set aside the assessment is limited to cases where assessment order is passed u/s 144 of the Act. However, in the instant case ld. CIT(A) himself in para 6.1.1 of the order observed that order was passed u/s 143(3) of the Act but set aside the same. Ld. Sr. DR thus prayed that the case may be remit back to the file of ld. CIT(A) to decide the appeal of the assessee on merits.
Heard the ld. Sr. DR and perused the material available on record. It is observed that in the instant case, the assessment order was passed u/s 143(3) however, ld. CIT(A) has set aside the same to the file of the AO to pass the assessment order afresh. The provision of section 251(1)(a) as amended vide Finance Act No.2 of 2024 is as under:
“251. Powers of the Joint Commissioner (Appeals) or the Commissioner (Appeals).
(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 appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment;”
As could be observed, Proviso to Section 251(1)(a) empowers the CIT(A) to set aside the assessment order however such power is granted only in cases where the assessment order is passed u/s 144 of the Act. Admittedly, in the instant case, the assessment order was passed u/s 143(3) of the Act therefore, the ld. CIT(A) has no power to set aside the same to the file of AO for fresh consideration. Under these circumstances, we set aside the order of ld. CIT(A) and direct to pass the order on merits of the issues raised by the appellant. Needless to say, appellant should be provided sufficient opportunity of being heard. The ground of appeal No.1 of the revenue is thus, allowed for statistical purposes.
In the result, appeal of the revenue is allowed for statistical purposes.