ITO WARD-1(5) LUDHIANA, LUDHIANA V. ANANT SPINNERS PRIVATE LIMITED, LUDHIANA

ITA 1150/CHANDI/2024

AI Insights

The case involves an appeal by the Income Tax Department against the order of the CIT(A), which remanded the assessment of M/s Anant Spinners Pvt. Ltd. back to the Assessing Officer. The original assessment for the year 2017-18 was contested by the Revenue on the grounds that the CIT(A) improperly applied the newly inserted proviso to section 251(1)(a) of the Income Tax Act, 1961. The Revenue argued that the assessment should not have been remanded as it was completed under section 143(3) and not section 144. However, the Tribunal found that the assessment was indeed made under section 144, thus validating the CIT(A)'s decision to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707153 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 26-11-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Keywords: Set aside; Principle of natural justice
• Section: 144; 143(3)

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, 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.1150/Chd/ 2024 िनधाŊरण वषŊ / Assessment Year : 2017-18 The ITO Ward -1(5), Ludhiana बनाम M/s Anant Spinners Pvt. Ltd. B-XXX-230, Sherpur Khurd, Ludhiana ˕ायी लेखा सं./PAN NO: अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : None राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 07/07/2025 उदघोषणा की तारीख/Date of Pronouncement : 08/07/2025 आदेश/Order PER LALIET KUMAR, J.M: This appeal is filed by the Revenue against the order of the CIT(A), NFAC, dated 04.10.2024 for the assessment year 2017–18. 2. At the time of hearing, none appeared on behalf of the assessee despite service of notice. Hence, the appeal is being decided ex parte qua the assessee, on the basis of the material available on record and the submissions of the Ld. DR. 3. The Ld. CIT-DR submitted that the CIT(A) erred in invoking the newly inserted proviso to section 251(1)(a) of the Income Tax Act, 1961, to remand the matter to the file of the Assessing Officer for a fresh assessment. It was argued that the assessment in this case was completed under section 143(3) of the Act and not under section 144, and therefore the remand power 2 introduced by Finance Act, 2024, w.e.f. 01.10.2024, was not applicable to the facts of the case. 4. The Ld. DR submitted that the order of assessment dated 31.12.2019, though mentioning that the assessee’s books were rejected under section 145(3), ultimately culminated in an assessment passed under section 143(3), and that the mention of section 144 in the concluding paragraph was only incidental or procedural. Thus, it was contended that the CIT(A) had exceeded his jurisdiction in setting aside the assessment under the pretext of a best judgment assessment. 5. We have heard the submissions of the Ld. DR and carefully perused the orders of the authorities below. 5.1 On perusal of paragraph 5.6 of the assessment order, it is clearly recorded by the AO as under: “...the book version of assessee cannot be accepted as true and correct, hence, the same is rejected as per provisions of section 145(3) of I.T. Act, 1961 and the taxable income of the assessee is computed as per provisions of section 144 of I.T. Act, 1961, to the best of Judgment...” Thus, the AO has explicitly invoked section 144 while computing the income, and the assessment is in the nature of a best judgment assessment under section 144 read with section 145(3), notwithstanding the procedural reference to section 143(3) in the assessment heading. 5.2 Once the assessment is made under section 144, the Ld. CIT(A) was fully empowered under the newly inserted proviso to section 251(1)(a) effective from 01.10.2024 to set aside such assessment and remand the matter back to the AO for a fresh assessment. The Ld. CIT(A) has rightly done so after recording that the assessee had not filed submissions and that the principles of natural justice warranted a fresh opportunity. 3 5.3 Accordingly, we find no merit in the Revenue’s contention. The order passed by the Ld. CIT(A) is legally tenable and in accordance with the statutory provisions as they now stand. 6. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 08/07/2025 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. आयकर आयुƅ/ 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, सहायक पंजीकार/ Assistant Registrar "