The CIT(A)'s power to set aside an assessment under the proviso to Section 251(1)(a) is discretionary. Where reassessment proceedings under Section 147 are initiated without valid jurisdiction or in violation of statutory procedures (Ss. 148/148A/151), the assessment must be quashed rather than remanded to the Assessing Officer.

Date of hearing 19.03.2026 Date of pronouncement 19.05.2026 ORDER PER: SUNIL KUMAR SINGH, JM.

This appeal has been preferred against the impugned order dated

06.11.2025passed in Appeal No NFAC/2017-18/10296965by the ld Commissioner of Income Tax, NFAC(Delhi) [hereinafter referred to as the “CIT(A)]u/s. 250 of the Income Tax Act, 1961(hereinafter referred to as the ‘Act),for the A.Y. 2018-19, wherein ld CIT(A) has remanded the assessment order dated 29.03.2023 passed u/s. 147/144 of the Act by invoking the powers under the proviso to clause (a) of sub-section (1) of section 251 of the Act, directing the assessing officer for making fresh assessment order.

2. At the very outset, we notice that assessee has raised 10various grounds under second appeal. Ld AR submits that one of the grounds raised by the assessee is that the reassessment proceedings were initiated before issuance of notice u/s. 148(A)(b) and 148 of the Act without PAN and without obtaining prior approval from the specified authority as mandated u/s. 151 of the Act. This apart, assessee has also stated that the assessment has been made against a non existing entity and not in the name of the appellant assessee. Ld AR, thus, submits that ld CIT(A) has erred in mechanically setting aside the assessment order instead of holding that jurisdiction assumed u/s. 147 was invalid etc.

3. Per contra, ld Sr DR has supported the impugned order being in accordance with newly inserted proviso to section 251(1)(a) of the Act, vide Finance Act, 2024.

4. Perusal of the impugned order shows that the ld CIT(A) has set aside the assessment order passed u/s. 147/144 of the Act by invoking the powers vested in him under the proviso to section 251(1)(a) of the Act.This proviso was inserted with effect from 01.10.2024 by Finance Act, 2024, which 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.

5. At the outset, we find that the notice u/s 148A(b) of the Act dated 16.03.2022 was issued by the ld AO giving time to the assessee to respond on or before 23.12.2022. This fact is evident from pages 25 to 27 of the paper book. Notice u/s 148 of the Act was issued on 29.03.2022 itself without even waiting for reply of the assessee. This itself makes the issuance of notice u/s 148 of the Act flawed which in turn become fatal to the entire assumption of jurisdiction and consequential reassessment proceedings. Hence, we have no hesitation to hold that entire reassessment deserves to be quashed on this limited aspect.

6. Further, we find the show cause notice issued u/s 148A(b) of the Act by the ld AO is dated 16.03.2022 but the 151 approval by the ld PCIT is dated 14.03.2022. The revenue could not explain as to how the approval u/s 151 of the Act could be given by the ld PCIT even before the date of issuance of show cause notice u/s 148A(b) of the Act. The evidence in this regard enclosed in pages 24 of the paper book. This also becomes f