CIT(A) Can’t Bypass Jurisdictional Challenge in Best Judgment Cases | ITAT

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  • Last Updated on 5 June, 2025

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Eyegear Optics ITAT 2025

Case Details: Eyegear Optics India (P.) Ltd. vs. Deputy Commissioner of Income-tax - [2025] 174 taxmann.com 1060 (Hyderabad-Trib.)

Judiciary and Counsel Details

  • Ravish Sood, Judicial Member & Madhusudan Sawdia, Accountant Member
  • Ms Suvibha Nolkha, AR for the Appellant.
  • Srinath Sadanala, DR for the Respondent.

Facts of the Case

Assessee-company, engaged in retail trading of ophthalmic products, claimed deduction of Rs. 4.17 crores towards referral fees paid to doctors. The Assessing Officer (AO) reopened the assessment under section 147 and completed it under section 144 because referral fees were not an allowable expenditure under section 37(1).

On appeal, the CIT(A) set aside the assessment to the AO with a direction to decide the matter afresh after affording a proper opportunity of being heard to the assessee. The aggrieved assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that the CIT(A) had restored the matter to the file of the AO as the assessee had not participated in the proceedings. However, the CIT(A) did not deal with the specific issues based on which the validity of the jurisdiction for framing the assessment was challenged.

The CIT(A) adopted an evasive approach and afforded the AO a second chance to undo the said lapse. The CIT(A) had the power to set aside the best judgment assessment order and refer the case back to the AO for a fresh assessment. However, this could not justify refraining from adjudicating the legal issues based on which the validity of the jurisdiction was challenged before him.

The CIT(A) was obligated to address and adjudicate the grievance of the assessee as regards the validity of the jurisdiction assumed by the AO for initiating the assessment or reassessment proceedings. Therefore, the matter was restored to CIT(A) with a direction to adjudicate the specific ground based on which the jurisdiction assumed by the AO for framing the reassessment order was assailed by the assessee.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied