BHAWANI DEVELOPERS,LUCKNOW V. INCOME TAX OFFICER-4(1), LUCKNOW-NEW, LUCKNOW-NEW

ITA 253/LKW/2025

AI Insights

The case involves Bhawani Developers appealing against an assessment order for the year 2018-19, which determined their total income significantly. The primary contention in the appeal was the jurisdiction to issue notice under sections 148 and 147 of the Income Tax Act, 1961. The assessee challenged the validity of the assessment proceedings and the assessment order itself, initially through the CIT(A) and subsequently via a Writ Petition in the Allahabad High Court. The High Court directed the CIT(A) to decide on the jurisdictional issues first, and if decided against the assessee, to also decide on the merits unless compelling reasons dictated otherwise. However, the CIT(A) only addressed the jurisdictional issues, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780508 (ITAT-LUCKNOW)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 30-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.K. AGARWAL
• Assessee Lawyers: P.K. KAPOOR
• Keywords: Set aside
• Section: 147; 148; 144; 143(3); 27

Judgement Text

"I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.253/Lkw/2025 Assessment Year: 2018-19 Bhawani Developers 2/67, Bahar, Sahara Estate, Jankipuram, Lucknow. PAN:AAPFB8273P Vs. Income Tax Officer-4(1), Lucknow-New (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) This appeal vide I.T.A. No.253/Lkw/2025 has been filed by the assessee for assessment year 2018-19 against impugned appellate order dated 16/01/2025 (DIN & Letter No.ITBA/NFAC/F/17/2024- 25/1072227089(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. (B) In this case assessment order dated 27/03/2023 was passed by the Assessing Officer u/s 147 of the Act read with section 144B of the Act, whereby the assessee’s total income was determined at Rs.27,26,42,787/- Appellant by Shri P. K. Kapoor, C. A. Respondent by Shri R. K. Agarwal, CIT (D.R.) Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 2 (rounded off to Rs.27,26,42,790/-). The relevant portion of the aforesaid assessment order is reproduced as under: Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 3 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 4 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 5 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 6 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 7 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 8 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 9 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 10 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 11 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 12 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 13 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 14 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 15 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 16 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 17 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 18 (B.1) The assessee filed appeal in the office of the learned CIT(A). During the appellate proceedings, the assessee took additional grounds challenging the jurisdiction to issue notice u/s 148 read with section 147 of the Act. During the pendency of the appeal in the office of the learned CIT(A), the assessee filed a Writ Petition before Hon'ble Allahabad High Court to Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 19 challenge the validity of the assessment proceedings initiated u/s 147 of the Act and the assessment order passed in pursuance of the same. Hon'ble Allahabad High Court, vide judgment and order dated 04/12/2024 in Writ Tax No.316 of 2024, has passed the following order:- \"2. The petitioner has already challenged the notice under Section 148A(b) of the Income Act, 1961 dated 15.03.2022, the order under Section 148A(d) of the Income Tax Act, 1961 and notice under Section 148 of the Income Tax Act, 1961 dated 29.03.2022 before the appellate authority. One of the grounds raised therein is that these notices/orders could not have been issued/passed in the first place. Certain jurisdictional issues have been raised. The submission is that the jurisdictional assessing authority could not have issued the said notices/orders, it is only the faceless assessing authority who could have done it. Mr. Pradeep Agrawal says that instead of entering into the merits of the issues the appellate authority should first decide jurisdictional issue.” 3. Learned Departmental Representative raised no objection to the jurisdictional issues being decided first. 4. In these circumstances, we dispose of this writ petition with a direction to the appellate authority i.e. opposite party no. 5 to consider and decide the jurisdictional issues raised by the petitioner- appellant before it at the earliest but as per law and after hearing the Department, as, in the event jurisdictional issues are decided in favour of the petitioner then the appellate authority may not have to go to the merits of the issues unless of course there are compelling reasons to decide the jurisdictional issues along with the merits of the issues in that case the appellate authority can to do so but will have to give reasons for the same. 5. As far as interim relief is concerned, it is open for the petitioner to move an application before the appellate authority or if it has already been moved, the appellate authority should decide it at the earliest say within fifteen days of receipt of certified copy of this order unless of course the earlier application has already been decided.” (B.2) On perusal of the above mentioned order of Hon'ble Allahabad High Court, it is found that in para 4 of the order, the Hon'ble High Court directed Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 20 the learned CIT(A) to decide the jurisdictional issues raised by the assessee at the earliest as per law and after hearing the Department. Hon'ble High Court further observed that in the event jurisdictional issues are decided in favour of the petitioner then the appellate authority may not have to go to the merits of the issues unless there were compelling reasons to decide the jurisdictional issues along with the merits of the issues; in which case the learned CIT(A) would have to give reasons. In pursuance of the order of Hon'ble High Court, the learned CIT(A) has passed part order dated 16/01/2025 u/s 250 of the Act. The learned CIT(A) has titled his order dated 16/01/2025 as “Part order u/s 250”, dismissing the assessee’s grounds taken on the jurisdictional issue. Relevant portion of the order of learned CIT(A) dated 16/01/2025 is reproduced below: Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 21 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 22 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 23 (B.3) The present appeal before us has been filed by the assessee against the aforesaid part order dated 16/01/2025 passed by learned CIT(A). During appellate proceedings, the learned A.R. for the assessee filed paper book containing the following particulars: Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 24 Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 25 (C) At the time of hearing before us, the learned A.R. for the assessee submitted that the jurisdictional issue, which was decided against the assessee by the learned CIT(A), may be decided by the Income Tax Appellate Tribunal. (C.1) The learned Departmental Representative submitted the learned CIT(A) erred in passing part order wherein he has decided only the jurisdiction issue. He submitted that once the jurisdiction issue was decided against the assessee, the learned CIT(A) should have decided the grounds raised on merits as well. (C.2) We have heard both sides. We have perused the materials on record. In the aforesaid order dated 04/12/2024 of Hon'ble Allahabad High Court it has been observed that in the event jurisdictional issues were decided in favour of the assessee, the learned CIT(A) might not have to go to the merits of the issues. Implied in this observation of Hon'ble High Court, is a Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 26 sense that the learned CIT(A) was required to decide the grounds taken by the assessee on merits also if the jurisdictional issues were decided against the assessee. The learned CIT(A) has failed to take note of this implication of the order of Hon'ble High Court. Under the scheme of the Act, one consolidated assessment order for a particular year by the Assessing Officer is to be passed, and separate assessment orders for separate issues would not be in consonance with the scheme of the Act. Similarly, the learned CIT(A) is also required to pass one consolidated order on the appeal filed by the assessee against the assessment order passed by the Assessing Officer. It would have been another matter, had the learned CIT(A), in the present case, decided the jurisdictional issues in favour of the assessee. In that scenario the issues on merits would have become merely academic and did not have been decided by the learned CIT(A). However, that is not the case here. In the present case, the learned CIT(A) has decided the jurisdictional issues against the assessee therefore, he was required to pass the order on the grounds taken by the assessee on merits as well. In this context, it will be useful to refer to relevant provisions of law under section 250(6), section 250(7) and section 251(1) of I. T. Act, which are reproduced below for the ease of reference: Section-250 (6) The order of the [Joint Commissioner (Appeals) or the] Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (7) On the disposal of the appeal, the [Joint Commissioner (Appeals) or the] Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 27 Section 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 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;] (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. [(1A) In disposing of an appeal, the Joint 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; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit.] (C.2.1) It is helpful to notice that section 250(6) of the I. T. Act uses the words “points for decision” (i.e. plural number) and “order” (i.e. singular number). The implication is obvious; one ‘order’ is to be passed by the CIT(A) for deciding all ‘points’ for determination. Further, section 250(6) of ITAT is a directory provision whereunder the learned CIT(A) is expected to decide ‘every appeal’ within a period of one year from the end of the financial year in which ‘such appeal’ is filed. If the CIT(A) were to decide issues raised in the appeal, in many parts through multiple orders; and further, if he were to await one issue to attain finality before deciding other issue(s); then it would lead to a tight time-frame, perhaps difficult to manage. Lastly, section 251(1)(a) of I. T. Act settles the matter decisively. In an Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 28 appeal against assessment order; CIT(A) may confirm, reduce, enhance or annul the assessment and may set aside the assessment back to the Assessing Officer for making a fresh assessment if the assessment appealed against was made u/s 144 of the I. T. Act. In the present case, the assessment was made u/s 143(3) of the I. T. Act. Therefore, once the CIT(A) decided not to annul the assessment in the present case, he was required to confirm or reduce or enhance the assessment. There was requirement on the part of the learned CIT(A) in the present case, either in the provisions of law, or in the order of Hon'ble High Court; to await the matter regarding annulment of the assessment to attain finality before deciding to confirm, reduce or enhance the assessment. The learned CIT(A) has erred, in passing a part order on jurisdictional issues leaving the grounds taken by the assessee on merits undecided. In view of the foregoing, we direct the learned CIT(A) to consider all the grounds taken by the assessee in appeal filed against the assessment order; and to pass one consolidated order on all the grounds taken in appeal. The present appeal is disposed of in accordance with the aforesaid directions. (C.3) In view of our decision in foregoing paragraph (C.2.1) of this order; the issues raised in grounds of appeal are not being decided presently. However, the assessee will be at liberty to take the grounds of appeal raised in the present appeal, in the appeal that the assessee may file in future, against order passed by learned CIT(A) in pursuance of our direction in the present appeal. (D) The appeal of partly allowed for statistical purposes only. (Order pronounced in the open court on 09/10/2025) Sd/. Sd/. (KUL BHARAT) (ANADEE NATH MISSHRA) Vice President Accountant Member Dated:09/10/2025 *Singh Printed from counselvise.com I.T.A. No.253/Lkw/2025 Assessment Year:2018-19 29 Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. Concerned CIT 4. D.R. ITAT, Lucknow Printed from counselvise.com "