When appeal is set aside by ITAT consequential proceedings are fresh proceedings – ITAT

Once appeal of assessee is set aside by ITAT with certain directions, then the consequential proceedings are fresh proceedings – ITAT

In a recent judgment, ITAT Delhi has held that once the appeal of the assessee is set aside by Tribunal with certain directions for reconsideration of the facts, then the consequential proceedings are fresh proceedings and the assessee is at liberty to file appeal against the order of the AO before CIT(A) in case he has not opted to prefer the filing  of objections before DRP u/s 144C of the Act. 

ABCAUS Case Law Citation:
4631 (2025) (07) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) NFAC in dismissing the appeal of the assessee as not maintainable by incorrect appreciation of the facts.

The appellant assessee filed its return of income u/s 139(1) which was revised upword later. The case of the assessee was selected for scrutiny and since the assessee was having specific domestic transaction therefore, the reference was made to Transfer Pricing Officer (TPO) u/s 92CA of the Act.

The TPO vide its order passed u/s 92CA(1) of the Act proposed the adjustment accordingly, the draft assessment order was passed by the AO. The assessee preferred appeal against the draft assessment order before Dispute Resolution Panel (DRP) which reduced the adjustments proposed by TPO and accordingly, the final assessment order u/s 143(3)/144C(13) wherein total income of the assessee was assessed.

Against this order, the appeal was filed before the Tribunal wherein the Co-ordinate Bench of ITAT remanded the matter to the file of AO with certain directions. 

In compliance to the directions given by the Co-ordinate Bench of ITAT, the AO passed the set aside order u/s 143 r.w.s 254 of the Act against which the assessee preferred an appeal before CIT(A).  The CIT(A) vide impugned order dismissed the appeal of the assessee being infructuous and non-maintainable. 

The Tribunal observed that the CIT(A) misunderstood the appeal of the assessee as filed against the final assessment order 143(3)/144C(13) of the Act and thus, observed that as per the existing provisions, the appeal lies before ITAT and not before CIT(A).

The Tribunal opined that the finding of CIT(A) was apparently taken on the basis of wrong appreciation of the facts and while disposing the appeal of the assessee made a reference of the final order passed u/s 143(3)/144C(13) of the Act.

The Tribunal held that once the appeal of the assessee is set aside by the Coordinate Bench of Tribunal with certain directions for reconsideration of the facts, then the consequential proceedings are fresh proceedings and the assessee is at liberty to file appeal against the order of the AO before CIT(A) in case he has not opted to prefer the filing of objections before DRP u/s 144C of the Act. 

In view of the above, the Tribunal held that the action of CIT(A) in dismissing the appeal of the assessee was contrary to the provisions of law and therefore, the order of CIT(A) was set aside and was directed to decide the appeal of the assessee afresh on the grounds taken against the order passed u/s 143(3) r.w.s. 254 in accordance with law. 

As a result, appeal of the assessee was allowed for statistical purposes.

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