Issue: Whether in terms of newly inserted proviso to section 251(1)(a) empowering CIT(A) to set aside assessment, where assessment is made u/s 144, the CIT(A) must necessarily set aside the assessment order and restore it the assessing officer?

The court held that
“4. Perusal of the impugned order shows that the ld CIT(A) has remanded/ set aside the assessment order passed u/s. 147/144 of the Act, by invoking the powers vested in him vide, proviso to section 251(1)(a) of the Act, which was inserted with effect from 01.10.2024 by Finance Act, 2024.This proviso provides that where such appeal is against the order of assessment made u/s. 144, he may set aside the assessment and render the case back to the assessing officer for making a fresh assessment. It is important to note that the legislature has used the word “may” which shows that the ld CIT(A) is not mandated to always set aside the assessment, having been framed u/s. 144 of the Act. Where the assessee is able to show that the assessing officer has incorrectly or invalidly assumed the jurisdiction for initiating the reassessment proceedings u/s. 147, the power of remand/ set aside in such a case may not be exercised and the first appellate authority, should decide the issue at its own. Mere framing of assessment u/s. 144 of the Act will not automatically give the ld CIT(A) a blanket discretion to always set aside the assessment for being redone in a routine manner.”

Issue: Whether reassessment is sustainable when reply to notice u/s 148A(b) shows that there is no income escaping assessment?
The court held that the Ld AO ignored the reply filed in response to notice u/s 148A(b) which showed that the sum considered as escaping assessment was already included in the income in the return.
“Hence, we have no hesitation to hold that the very assumption of jurisdiction of the ld AO u/s 147 of the Act is totally flawed as there is no income escaping assessment at all.”