INCOME TAX OFFICER, KHANNA V. ROHIT GUPTA, KHANNA

ITA 861/CHANDI/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Ld. CIT(A)/NFAC, Delhi, which pertained to the Assessment Year 2015-16. The Revenue challenged the decision of the Ld. CIT(A) to set aside the assessment made by the Assessing Officer, which was initially completed ex-parte due to the non-compliance of the assessee, Rohit Gupta. The Assessing Officer had treated an investment of Rs. 26,54,06,000 in shares as unexplained under section 69 of the Income Tax Act, 1961. The Ld. CIT(A) set aside this assessment, citing the need for a fresh assessment to ensure that the assessee's rights were not irreversibly prejudiced by an ex-parte decision. The Tribunal agreed with the Ld. CIT(A)'s decision, emphasizing the legislative intent behind the proviso to section 251(1)(a) of the Act, which allows for such remands to ensure assessments are ultimately framed on merits after proper verification.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826527 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 26-06-2025
• Other Referred Cases: Principal Commissioner of Income Tax-3, Vs. Ashokji Chanduji Thakor
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Keywords: Set aside; Opportunity of being heard; Unexplained investment
• Section: 147; 148; 144; 142(1); 69

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM &SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 861/Chd/ 2025 िनधाŊरण वषŊ / Assessment Year : 2015-16 The ITO Khanna बनाम Rohit Gupta Prop. R.R. Industries , GTB Market Khanna ˕ायी लेखा सं./PAN NO: AAZPG5572C अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : None राजˢकी ओर से/ Revenue by : Shri Rajat Kumar Kureel, CIT, DR सुनवाई की तारीख/Date of Hearing : 07/01/2026 उदघोषणा की तारीख/Date of Pronouncement : 08/01/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Revenue against the order of the Ld. CIT(A)/NFAC, Delhi dt. 16/04/2025 pertaining to Assessment Year 2015-16. 2. In the present appeal Revenue has raised the following grounds: 1. That, the Ld. Commissioner of Income Tax(Appeals) has erred in allowing the appeal of the assessee and setting aside the matter to the file of AO, without going into and discussing the merits of the case that Assessing Officer had given various opportunities to file the reply to the assessee. 2) That, the Ld. Commissioner of Income Tax (Appeals) has failed to appreciate the fact that the addition of Rs.26,54,06,000/- made by the AO being unexplained investment in shares u/s 69 r.w.s. 115BBE of the Income Tax Act, 1961 as the assessee had failed to furnish any explanation on this issue during the course of assessment proceedings. 3) That, the Ld. Commissioner of Income Tax (Appeals) has failed to appreciate the fact that the addition of Rs. 26,54,06,000/- made by the AO being unexplained investment in shares, as the assessee had failed to furnish satisfactory explanation on this issue during the course of assessment proceedings. 4) That, reliance is placed on the judgement of Hon'ble High Court of Gujarat at Ahmedabad in the case of Principal Commissioner of Income Tax-3, Vs. Ashokji Chanduji Thakor dated 27.06.2018 wherein the order passed by the Hon'ble ITAT was quashed & order of AO/CIT(A) were restored. Further appeal of the assessee Printed from counselvise.com 2 (SLP No. 15019/2021) was also dismissed by the Hon'ble Supreme Court vide order dated 26.07.2021. 5) That the appellant craves leave to add or amend any ground of appeal before it is finally disposed of. 3. Despite service of notice, none appeared on behalf of the assessee at the time of the hearing. There is also no request for adjournment. Therefore, the appeal is taken up for hearing ex parte qua the assessee and is disposed of after hearing the Ld. DR and perusing the material available on record. 3.1 The assessee did not file the return of income for the year under consideration. Information was received by the Assessing Officer that during the financial year relevant to A.Y. 2015-16, the assessee had made an investment in shares amounting to Rs. 26,54,06,000/-.On the basis of the said information, proceedings under section 147 of the Income Tax Act, 1961, were initiated, and a notice under section 148 was issued. Since the assessee failed to comply with the statutory notices issued under sections 148 and 142(1) of the Act, the Assessing Officer completed the assessment under section 147 read with section 144 of the Act and treated the alleged investment as an unexplained investment under section 69 of the Act. 4. Against the order of the Assessing Officer the assessee went in appeal before the Ld. CIT(A). The Ld. CIT(A) noted that the assessment had been completed ex-parte due to non-compliance on the part of the assessee. Taking note of the proviso to section 251(1)(a) of the Act, inserted with effect from 01.10.2024, the Ld. CIT(A) set aside the assessment and restored the matter to the file of the Assessing Officer for making a fresh assessment after affording reasonable opportunity of being heard to the assessee. 5. Aggrieved by the said action, the Revenue is in appeal before the Tribunal. 6. The Revenue has assailed the order of the Ld. CIT(A) on the ground that sufficient opportunities were already afforded to the assessee during the Printed from counselvise.com 3 assessment proceedings and, therefore, the Ld. CIT(A) erred in setting aside the assessment instead of adjudicating the issue on merits. 6.1 The Ld. DR submitted that the assessee remained non-compliant throughout the assessment proceedings and the Assessing Officer was left with no option but to complete the assessment under section 144 of the Act.It was submitted that the Ld. CIT(A) ought to have decided the appeal on merits instead of remanding the matter back to the Assessing Officer. 7. We have heard the Ld. DR and carefully perused the material available on record. It is an undisputed fact that the assessment in the present case was completed under section 147 read with section 144 of the Act due to the assessee's non-compliance. The proviso to section 251(1)(a) of the Act, inserted by the Finance Act, 2024 with effect from 01.10.2024, specifically empowers the Commissioner (Appeals) to set aside an assessment made under section 144 and to refer the case back to the Assessing Officer for making a fresh assessment. The legislative intent behind the said proviso is to ensure that an ex parte assessment does not result in irreversible prejudice to the assessee and that the assessment is ultimately framed on merits after proper verification. 7.1 In the present case, the Ld. CIT(A) has recorded a categorical finding that the Assessing Officer could not carry out any meaningful verification of the alleged investment due to the absence of supporting material and non- cooperation by the assessee. 7.2 We find that the action of the Ld. CIT(A) is strictly in consonance with the statutory powers conferred under section 251(1)(a) of the Act. The Ld. CIT(A) has neither exceeded jurisdiction nor acted contrary to law. The situation before us is distinguishable from cases where appellate authorities remand matters without statutory sanction. Here, the remand is expressly authorized by the Act itself. 7.3 In view of the foregoing discussion, we do not find any infirmity in the order passed by the Ld. CIT(A) in setting aside the assessment framed under section Printed from counselvise.com 4 147 read with section 144 of the Act. Accordingly, the order of the Ld. CIT(A) is upheld. The Assessing Officer shall frame the assessment afresh in accordance with law after affording an adequate opportunity to be heard to the assessee. 8. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open Court on 08/01/2026. Sd/- Sd/- क ृणवȶ सहाय लिलत क ुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟/JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकरआयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar Printed from counselvise.com "