CIT(A) Must Decide Reopening Validity Before Remanding: Analysis of Late Shyam Sunder Vs ITO (ITAT Delhi)

In Late Shyam Sunder Vs ITO (ITAT Delhi), the Income Tax Appellate Tribunal, Delhi Bench, examined whether the CIT(A) can avoid adjudicating jurisdictional challenges to reassessment proceedings by simply sending the case back to the Assessing Officer (AO) for a fresh assessment.

The Tribunal held that such an approach is impermissible. Once an assessee raises legal objections to the very jurisdiction of reassessment—such as the validity of a Section 148 notice, compliance with Section 148A, or approval under Section 151—the CIT(A) is obliged under Section 250(6) to render a reasoned decision on those points. A remand order, without adjudicating those issues, violates the statutory mandate.

This ruling relies heavily on the jurisdictional Delhi High Court decision in Akasaki Technology (P.) Ltd. Vs PCIT, ITA No.241/2025, order dated 27.11.2025, and reinforces the appellate duty under Section 250(6) and Section 251(1)(a) of the Income Tax Act 1961.

Factual Matrix: Common Reopening for Four Assessment Years

The Tribunal heard four connected appeals for Assessment Years 2013-14 to 2016-17. All appeals arose from similar reassessment proceedings based on information regarding alleged investments in the Piyush Group of companies and interest income thereon.

The appeal for AY 2013-14 (ITA No. 1267/Del/2026) was treated as the lead matter since:

  • The assessee was the same (Late Shyam Sunder, represented by legal heir),
  • The pattern of reopening and additions was similar, and
  • The reasoning of the CIT(A) was common across years.

Original Return and Reopening for AY 2013-14

For AY 2013-14:

  • The assessee, an individual, filed a return of income on 31.07.2013, declaring ₹3,32,210.
  • The return was processed under Section 143(1) on **07.10.2013`.
  • Subsequently, the AO reopened the assessment under Section 147 by issuing a Section 148 notice dated 30.03.2021, after obtaining approval under Section 151 from the Pr. CIT, Faridabad.

The assessee did not respond to:

  • The Section 148 notice, or
  • Multiple Section 142(1) notices dated 25.11.2021, 14.12.2021, 06.01.2022, and 01.02.2022.

Consequently:

  • A show cause notice under Section 144 dated 11.02.2022 was issued for proposed addition of ₹48,53,745 as unexplained investment under Section 68.
  • No reply was filed.
  • The AO completed a best judgment assessment under Section 144, making a total addition of ₹55,82,620 under Section 68 and initiated penalty proceedings.

The key controversy across all years concerned:

  • Alleged investments in the Piyush Group, and
  • Interest income attributed to those investments.

Appeal Before CIT(A): Jurisdictional and Merits Challenges

Before the CIT(A)/NFAC, the assessee challenged:

  • The legality of reopening itself, and
  • The quantum and basis of additions under Section 68/Section 69A and interest income.

Nature of Jurisdictional Objections

The assessee’s written submissions, as recorded by the CIT(A), raised several jurisdictional objections, including:

  • Reopening based on borrowed satisfaction from police information without independent inquiry by the AO.
  • Absence of tangible material or corroborative evidence to support “reasons to believe”.
  • Defects in approval under Section 151, including:
    • Allegation of mechanical sanction without application of mind.
    • Approval by a non-jurisdictional Pr. CIT in some years.
    • Timing of receipt of approval vis-à-vis issuance of Section 148 notice.
  • Non-compliance with the new regime under Section 148A in respect of notices issued during the transitional period referred to in Rajeev Bansal & Anr. v. Union of India (2023) 469 ITR 46 (SC).
  • Alleged violation of Section 151A, CBDT Notification No. 76/2020 dated 25.09.2020 and CBDT Circular No. 19/2020 dated 13.08.2020, in those years where reassessment was not carried out through NFAC despite the mandate.
  • Alleged invalidity of notices issued without DIN contrary to CBDT Circular No. 19/2019 dated 14.08.2019.

On merits, the assessee contended that:

  • Additions for unexplained investments and interest income were made purely on suspicion and conjecture, allegedly based on unverifiable police information.
  • There was no evidence linking the assessee with the alleged investments or interest receipts.
  • No independent inquiries under Sections 131, 133(6), or 142(2) were carried out.

CIT(A)’s Approach: Remand Without Deciding Jurisdiction