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2014 (5) TMI 992 - AT - Income TaxVerification of claim - Whether the CIT(A) has erred in directing the AO to verify the claim of the assessee Held that - Section 251 clearly states that when an appeal is preferred against the assessment order, CIT(A) has the power to confirm, reduce, enhance or annul the assessment the order of the CIT(A) is from an appeal preferred against an order passed by AO u/s 154 of the Act - An appeal against section 154 order of the Act of the AO does not fall under section 251(1)(a), the power of the CIT(A) has to be drawn from section 251(1)(c) which clearly states that in any other case he may pass such orders as he thinks fit - the order before the CIT(A) falls under the category in any other cases envisaged u/s 251(1)(c). Only one notice was send by AO, to assessee on 15.06.2012 fixing the matter on 30.05.2012 - no reply or none appeared on behalf of the assessee, the AO passed an ex-parte order u/s 154 of the Act - the CIT(A) has not set aside the order of the AO Officer which was passed u/s 154 but he has only remitted the case back to the file of the AO to verify the claim of the assessee on the ground of violation of natural justice thus, there was no infirmity in the direction passed by the CIT(A) Decided against Revenue.
Issues: Appeal against order of Assessing Officer u/s 154 - Power of CIT(A) to set aside order
In this case, the Appellate Tribunal ITAT DELHI considered an appeal by the revenue against the order of the ld CIT(A)-XXV, New Delhi for the Assessment Year 2008-09. The sole ground of appeal was that the ld CIT(A) erred in directing the Assessing Officer to verify the claim of the assessee, which was perceived as setting aside the matter not permitted by law. The original assessment was completed under section 143(3) of the Income Tax Act 1961, and subsequently, an ex-parte order was passed under section 154. The ld CIT(A) held that the Assessing Officer was not justified in making the addition without giving the assessee a proper opportunity, and remitted the case back for verification. The revenue contended that the order of the ld CIT(A) amounted to setting aside the Assessing Officer's order, which was not permissible. The Tribunal analyzed the powers of the ld CIT(A) under section 251 of the Act, which allows for confirmation, reduction, enhancement, or annulment of the assessment in an appeal. However, in the case of an appeal against a section 154 order, falling under "in any other case," the ld CIT(A) has the power to pass orders as deemed fit under section 251(1)(c). Since the ld CIT(A) did not set aside the Assessing Officer's order but only remitted it for verification due to a violation of natural justice, the Tribunal found no issue with the direction given by the ld CIT(A). Consequently, the appeal by the revenue was dismissed, upholding the ld CIT(A)'s order. This judgment highlights the importance of understanding the specific provisions of the law governing appeals and the powers of appellate authorities in different scenarios. It clarifies that in cases where an appeal is made against a rectification order like section 154, the ld CIT(A) can exercise powers under section 251(1)(c) to pass appropriate orders. The decision emphasizes the need for procedural fairness and adherence to natural justice principles in tax assessments, ensuring that taxpayers are given a proper opportunity to present their case before any adverse actions are taken.
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