Despite set aside for “de novo consideration”, AO cannot look at fresh issues

Gemini Oils Pvt. Ltd vs. ITO (ITAT Mumbai)

The CIT(A) disposed off the appeal filed by the assessee by observing “A perusal of the above additions clearly show that the AO has made the assessment in a very casual manner … Considering the heavy additions made and the necessity for making adequate enquiries into the matter, it is considered necessary to set aside the assessment for denovo consideration”. In the order passed pursuant to the said order of the CIT(A), the AO made additions on issues other than those that were covered in the first order. The assessee challenged this on the basis that even though the CIT(A) had set aside for “denovo consideration”, the AO could not look into new issues. HELD by the Tribunal:

The scope of proceedings after remand depend on the terms of the remand order. If the appellate authority has set aside the assessment and directed the making of a fresh assessment without imposing any restrictions or limitations, the AO has the same powers in making fresh assessment as he originally had. However, if any restrictions are placed, the AO cannot travel beyond those restrictions. The scope of the remand order has to be determined depending on the subject matter of the appeal and the appellate order read as a whole in its proper context. On facts a perusal of the findings of the CIT (A) shows that he was concerned with the additions made in the original assessment order and it was in the light of the additions made therein, that the assessment was set aside for denovo consideration. This clearly shows that the directions of the CIT (A) for denovo assessment were restricted to the additions made by the AO in the original assessment order and, therefore, the AO had no jurisdiction to look at other issues.