ITAT Pune Strikes Down Remand Order for Non-Adjudication of Jurisdictional Issues: Section 250(6) Mandate Reinforced

Introduction

The Income Tax Appellate Tribunal, Pune Bench, delivered a significant ruling emphasizing the procedural obligations of the Commissioner of Income Tax (Appeals) under Section 250(6) of the Income Tax Act, 1961. In the case of George Molakal Mathew v. ITO, International Tax Ward-3, Pune (ITA No. 2236/PUN/2025; AY 2016-17), the Tribunal categorically held that appellate authorities cannot remand matters to the Assessing Officer without first adjudicating legal and jurisdictional grounds raised by the assessee.

This decision reinforces the principle that appellate orders must be comprehensive, reasoned, and address each ground of appeal independently—whether factual or legal. The judgment serves as an important reminder to appellate authorities about their statutory duty to deliver speaking orders rather than taking the easier route of blanket remands.

Background and Factual Matrix

Profile of the Assessee

The appellant in this matter, Mr. George Molakal Mathew, is an individual taxpayer who did not file his return of income for Assessment Year 2016-17. During the relevant period, the Income Tax Department came across information revealing substantial financial activities undertaken by the assessee.

Financial Transactions Under Scrutiny

The departmental investigation uncovered the following financial transactions:

  • Credit card payments exceeding Rs. 24,00,000/-
  • Interest income amounting to Rs. 60,75,000/- on which tax was deducted at source under Section 194A
  • Sale of immovable property valued at Rs. 1,42,00,000/-

Despite these significant financial dealings, no return of income was submitted by the assessee for the year under consideration.

Reopening of Assessment

Based on the available information, the Assessing Officer formed a reasonable belief that income chargeable to tax had escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961. Consequently, the following procedural steps were initiated:

  1. Reopening of assessment under Section 147
  2. Issuance of notice under Section 148
  3. Subsequent notice under Section 142(1)
  4. Show cause notice for non-compliance

Ex-Parte Assessment

The assessee remained non-responsive to the multiple notices issued by the department. Given the continued non-cooperation, the Assessing Officer proceeded to complete an ex-parte assessment under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961.

Through an order dated 27.03.2022, the Assessing Officer determined the total income at Rs. 2,26,79,848/- against nil return filed. This assessed income comprised an addition of Rs. 2,26,79,848/- on account of unaccounted investment.

Appellate Proceedings Before CIT(A)/NFAC

Grounds Raised Before First Appellate Authority

Aggrieved by the ex-parte assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre. The appellant raised eleven distinct grounds of appeal, which included:

  • Jurisdictional challenges to the validity of reopening under Section 147
  • Territorial jurisdiction issues regarding the assessment order passed by National Faceless Assessment Centre, Delhi
  • Factual grounds relating to the additions made by the Assessing Officer
  • Procedural irregularities in the assessment proceedings

Impugned Order of CIT(A)/NFAC

After considering the statement of facts, grounds of appeal, and written submissions, the CIT(A)/NFAC passed an order dated 25.04.2025. However, instead of adjudicating the grounds raised, the appellate authority simply set aside the ex-parte assessment order and remanded the entire matter back to the Assessing Officer for conducting a fresh assessment.

Critically, the CIT(A)/NFAC did not examine or decide:

  • The legal validity of reopening proceedings
  • The jurisdictional challenge regarding NFAC's authority
  • Any of the eleven grounds raised by the assessee

This approach of wholesale remand without addressing legal and jurisdictional issues became the subject matter of appeal before the ITAT Pune.

Contentions Before the Tribunal

Assessee's Arguments

The appellant contended before the Tribunal that:

  1. Violation of Section 250(6): The CIT(A)/NFAC failed to discharge its statutory obligation under Section 250(6) of the Act, which mandates passing a reasoned, speaking order on each ground of appeal.

  2. Non-adjudication of Legal Grounds: The appellate authority completely ignored the legal grounds challenging the validity of reopening under Section 147 and the jurisdiction of NFAC.

  3. Territorial Jurisdiction: The proper appellate authority having territorial jurisdiction was CIT(A)-13, Pune, not the National Faceless Appeal Centre. This fact was communicated to CIT(A)/NFAC through a letter dated 15 March 2023.