AI Structured Summary
Not yet generated for this judgment
Judgment
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 04.02.2025 of the Ld. National Faceless Appeal Centre (NFAC) (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No : ITBA/NFAC/S/250/2024-25/1072895208(1) arising out of the order dated 26.12.2019 u/s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the ITO, Ward-4 for AY: 2017-18.
At the time of hearing ld. Counsel has pointed out that assessee’s appeal by the ld. First Appellate Authority has been allowed for statistical purposes by resorting to amendment brought by Finance Act, 2024 by which Commissioner Appeals have been given power u/s 251 of the Act to set aside the assessment made u/s 144 of the Act and refer the cases back to the assessing officer for fresh evaluation. It was submitted that assessee had raised legal ground that mandatory notice u/s 143(2) of the Act has not been issued by competent jurisdictional assessing officer and on that basis the impugned assessment was liable to be quashed and that ground has not been adjudicated.
Ld. DR has submitted that there is no error in the impugned order as the assessee is not prejudiced by the impugned order of ld. First Appellate Authority and issue can be raised before AO.
The Provisio added to sub section (1) (a) to Section 251 of the Act uses the words ‘he may set aside the assessment”. We are of the considered view that the powers given u/s 251 of the Act to Commissioner Appeals, by way of Amendment of Finance Act, 2024 are to be exercised like any powers vested with a quasi judicial authority, to be exercised with judiciously. The discretion as exercised should manifest application of mind. Thus it is not that every assessment concluded u/s 144 of the Act, should be ‘set aside’ at first appellate stage. It is for some reasons to be recorded the ld. First Appellate Authority can consider referring the case back for fresh evaluation to the AO.
However, where a pure question of law emanating from the assessment record is raised before the ld. First Appellate Authority then merely for the reason that assessment has been completed u/s 144 of the Act the powers to set aside the assessment for fresh evaluation is not justified as independently ld. First Appellate Authority can decide the question of law of wrongful assumption of jurisdiction by the assessing officer, as for that reasons the assessment is based on best judgment u/s 144 or otherwise u/s 143 of the Act, is not of any consequence.
In the light of aforesaid the appeal of the assessee is allowed for statistical purposes. We set aside the impugned order of ld. CIT(A) to the extent that the assessee’s legal grounds shall be first adjudicated and thereupon only, if needed, the powers of setting aside the assessments to Assessing Officer may be considered.