InITAT/147/2023 -CAL HC- Calcutta High Court holds CIT(A) cannot remand case back to AO after ruling in favour of assessee
Chief Justice T. S. Sivagnanam & Justice Hiranmay Bhattacharyya [02-08-2023]
New Delhi, September 15, 2023: The Calcutta High Court has held that the Commissioner of Income Tax (Appeals) [CIT(A)] cannot remand a case back to the assessing officer (AO) after ruling in favour of the assessee.
The short question involved in this appeal was whether the CIT(A), even after concurring with the assessee and determining that the AO had made erroneous additions, had the authority to remand the case back to the AO for further verifications or considerations.
The division bench of Chief Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya held that considering the statutory limitations, the Commissioner did not have the authority to remand the case back to the AO, once the Commissioner had already concluded the case entirely in favour of the assesse.
The bench also observed that despite the use of the term 'prima facie' in the order issued by the CIT(A), a comprehensive examination of the CIT(A)'s order indicated that the case was thoroughly deliberated on its merits. Subsequently, a definitive finding was made that the assessing officer's decision to make the addition was unwarranted, and a clear directive was given to remove the addition. In light of such findings, the mere inclusion of the term ‘prima facie’ did not alter the fact that the CIT(A) had extensively assessed the matter, taking into account the factual circumstances.
The bench further noted that during the proceedings before the Income Tax Appellate Tribunal (ITAT), the appellant had explicitly raised the issue that the CIT(A) had exceeded the legally conferred limits of authority as per Section 251(1)(a) of the Income Tax Act. Despite the appellant's specific argument on this matter before the ITAT, the ITAT did not address this particular issue. Therefore, the bench held that not only did the CIT(A) made a legal error by remanding the case to the AO after ruling in favour of the assessee, but the ITAT also failed to consider and resolve this issue adequately.
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