SATPAL NANDRAJOG,DELHI vs. DCIT, CIRCLE 58(1), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1218/Del/2026 (Assessment Year : 2017-18) Satpal Nandrajog Vs. DCIT B-93, 1st Floor, East Delhi Circle – 58(1) Vivek Vihar, Delhi Delhi – 110 095 PAN No. ABUPN 5485 D (APPELLANT) (RESPONDENT) Assessee by Shri Abhishek Jain, C.A. and Ms. Sunidhi Sharma, Adv. Revenue by Shri Ravi Kant Choudhary, Sr. D.R. Date of hearing: 18.05.2026 Date of Pronouncement: 13.08.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the assessee against the order of the CIT(A)/NFAC Delhi dated 16.12.2024 arising from the assessment order dated 21.03.2022 under Section 147 r.w.s. 144 r.w.s 144B of the Income Tax Act, 1961 (‘the Act’) by the NFAC, Delhi concerning Assessment Year (A.Y.) 2017-18.

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT 2. At the outset, the ld counsel of the assessee stated that the appeal was filed with a delay of 339 days. The reason for delay was that the assessee has not been mentally fit since 2011 and was under medical treatment and is not able to understand the nature and consequence of issues. We find that the assessee has sufficient cause for the delay and following the decision of hon’ble Supreme Court in the case of Collector Land Acquisition V Mst Katij & othrs (1987) 167 ITR 471(SC), we condone the delay. 3. Brief facts of the case are that the assessee is an individual and had not filed his return of income for A.Y. 2017-18 u/s 139(1) of the Act. The Jurisdictional Assessing Officer (JAO) received an information available on AIR, that the assessee has made cash payments for goods and services amounting to Rs.9,31,600/- and has received rent amounting to Rs.69,30,841/-. The JAO, after following the due procedure and obtaining prior approval, issued notice under section 148 of the Act dated 30.03.2021 which was duly served upon the assessee. The AO notes that the assessee did not file ITR In response the notice u/s 148 of the Act. Instead, the assessee filed his ITR for AY 2017-18 u/s 139(4) r.w.s 119(2)(b) declaring income of Rs 4,36,510/- on 15.04.2021. The return filed u/s 139(4) r.w.s. 119(2)(b) was ignored

Page 2 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT by the FAO while passing the assessment order u/s 147 r.w.s 144 r.w.s. 144B of the Act. 4. During the course of assessment proceedings, the JAO has issued notice under section 142(1) of the Act dated 15.11.2021 along with detailed show-cause notice. In response to the notices, the assessee had not furnished any detail. Subsequently, the NFAC, hereinafter referred to as FAO, issued a notice u/s 142(1) dated 23.11.2021 and 03.02.2022. As no response was forthcoming, FAO issued a show cause notice u/s 144 of the Act dated 07.02.2022. Thereafter, FAO issued a show cause notice dated 13.03.2022 intimating the assessee of the proposed variation. Finally, in absence of any response or explanation from the assessee, the FAO completed the assessment under section 147 r.w.s 144 r.w.s 144B of the Act dated 21.03.2022 by assessing the total income at Rs.57,83,189/- thereby raising the tax demand of Rs.41,27,616/-. 5. Aggrieved, assessee was in appeal before the CIT(A)/NFAC. CIT(A)/NFAC observed that no reason to interfere with the order of the FAO. Hence, the Assessment Order was upheld. Aggrieved by the order of CIT(A)/NFAC, assessee is now in appeal before us with the following grounds:

Page 3 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT 1. “That in facts and circumstances of the case, the Ld. AO has erred in law in passing the assessment order u/s 147 r.w.s 144r.w.s 144B of the IT Act, 1961, hence such assessment order is liable to be quashed. 2. That in facts and circumstances of the case, the Ld. AO, has erred in law in not conducting and completing a sin qua non valid assessment u/s 148 of the IT Act, 1961 in terms of provisions of section 151A of IT Act, 1961 r/w CBDT Notification No. 18/22, hence entire assessment proceedings is null and void and liable to be quashed. 3. That in facts and circumstances of the case, the Ld. AO has erred in law in making the addition of Rs. 57,83,189/- in the hands of the assessee company ignoring the facts the return was already filled by the assessee. 4. That in facts and circumstances of the case, the impugned assessment order is illegal which is not sustainable in law, hence such assessment order is liable to be quashed. 5. That the appellant craves leave to add, amend, alter and/or withdraw any or all the above grounds at the time of hearing and disposal of appeal.” 6. The ld counsel of the assessee made the following submission arguing that the assessment order is not valid: “GROUND-4 That in facts and circumstances of the case, the impugned assessment order is illegal which is not sustainable in law, hence such assessment order is liable to be quashed. It is imperative to mention here that the assessment proceedings concluded under section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 is invalid and beyond jurisdiction, as such proceeding along with assessment order passed u/s 147 r.w.s 144 r.w.s 144B of the Act in itself suffers from fundamental legal infirmities. The said proceedings were conducted beyond jurisdiction and without authority of law in absence of notification giving power for faceless assessments which was notified only on 29.03.2022 vide CBDT Notification No. 18/2022 [F. No. 370142/16/2022-TPL (Part 1)]. Further, it is to be submitted that section 151A of the Act, introduced by the Finance Act, 2020 with effect from 01.11.2020, lays down the framework for faceless assessment, reassessment, re-computation, issuance of notice under Section 148, and sanction under Section 151 of the Act where section 151A of the Act stating that: 151A. (1) The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of assessment, reassessment or re-computation under section 147 or issuance of notice under section 148 or sanction for issue of such notice under

Page 4 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT section 151, so as to impart greater efficiency, transparency and accountability by- (a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based assessment, reassessment, re- computation or issuance or sanction of notice with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, 2022. (3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] As per Section 151A(2) which empowers modifications or exceptions to the Act for giving effect to such a scheme as may be specified in the notification. Importantly, the faceless scheme for reassessment became operational only upon issuance of CBDT Notification No. 18/2022 [F. No. 370142/16/2022- TPL (Part 1)] dated 29.03.2022, accordingly the scheme in sub-section (1) of Section 151A of Income Tax Act, 1961 gets legal validity for implementation only on 29.03.2022 and not any time before that. However, in the present case, the impugned assessment proceeding u/s 147 in the instant case under the scheme specified in sub-section (1) of section 151A of Income Tax Act, 1961 i.e in faceless manner was initiated much prior to the said notification dated 29.03.2022, accordingly such assessment proceedings were conducted in faceless manner without any authority of law. The important timelines are shown in below table: Date Section under Authority issuing such notice which notice is issued 30.03.2021 148 ACIT, Circle – 58(1), Delhi 15.11.2021 142(1) ACIT, Circle – 58(1), Delhi 23.12.2021 142(1) National Faceless Assessment Centre, Delhi 03.02.2022 142(1) National Faceless Assessment Centre, Delhi 07.02.2022 SCN National Faceless Assessment Centre, Delhi 13.03.2022 SCN National Faceless Assessment Centre, Delhi 21.03.2022 147 r.w.s 144 r.w.s National Faceless Assessment Centre, Delhi 144B of the Act

Page 5 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT As can be seen from the above table, that the entire assessment proceedings was conducted under the scheme provided in Section 151A(1) of Income Tax Act, 1961 before issuance of notification dated 29.03.2022 which means such an assessment has been conducted in a manner which is beyond authority of law. It is a settled principle that a notification becomes operative only from the date of its issuance and is not retrospective unless expressly stated. Accordingly, the CBDT's notification dated 29.03.2022 applies only to proceedings initiated on or after 29.03.2022. Any proceedings prior to 29.03.2022 continue under the earlier regime, wherein NFAC had no jurisdiction to conduct reassessment proceedings under Section 147 of the Act. Thus, the reassessment framed by NFAC in the present proceeding is initiated, conducted and concluded before the operative date of the said notification, therefore, the assessment framed in the present case is prior to the notification dated 29.03.2022 which makes the entire assessment proceeding illegal and invalid, hence liable to be quashed. Further, Hon'ble Supreme Court in the case of UCO Bank v. CIT [(1999) 237 ITR 889 (SC)] has categorically held that circulars and instructions issued by the CBDT in exercise of its powers under section 119 are binding on the Departmental authorities. Therefore, any action taken in violation of such binding instructions is rendered void ab initio. Accordingly, assessment proceeding u/s 147 of Income Tax Act, 1961 is in contravention to CBDT Notification No. 18/2022/F. No. 370142/16/2022- TPL(Part 1)] dated 29.03.2022 is invalid, and is beyond jurisdiction and non- est. Reliance is also placed on the decision of the - Hon'ble ITAT Delhi, Bench "G" in the case of Suresh Chand V/s ITO, Ward 4(1), Gurgaon, ITA No. 4110/Del/2024 Hon'ble ITAT Kolkata, Bench "C" in the case of MD Mahimud SK V/s ITO, Ward 3(1), ITA Nos. 2230 & 2229/KOL/2024 Hon'ble ITAT Delhi, Bench "SMC" in the case of Atar Singh V/s ITO, Ward 70(1), Delhi, ITA No. 186/Del/2025 - Hon'ble ITAT Guwahati, Bench "DB" in the case of John Chhetri V/s Ward 1(2), Ghy, ITA No. 139/GTY/2025 - Hon'ble ITAT Patna, Bench "Patna" in the case of Kashyap Constructions & Developers V/s ACIT, Cir-4, Patna, ITA No.716/PAT/2024 - Hon'ble ITAT Kolkata, Bench "SMC" in the case of Nabiul Industrial Metal Pvt. Ltd V/s ITO, IT Department, NFAC, Delhi, L.T.A. No.: 1328/KOL/2024 Hence, in light of the above facts and judgment the proceeding u/s 147 of the Income Tax Act, 1961 was beyond jurisdiction and invalid. Therefore,

Page 6 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT the assessment order passed u/s 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 is liable to be quashed. Thus, we hereby pray to your honor to kindly accept the above additional ground of appeal which is on legal issue emerging out of assessment record itself. Your honor's kind consideration in the matter will be highly appreciated.” 7. Per contra, learned DR vehemently argued that the NFAC has validly made faceless assessment under the law. The ld DR appraised us with the scheme of Faceless assessment dated 12.09.2019 and 'E- assessment Scheme, 2019' vide Notification No. 60/2020-Income Tax dated 13.08.2020. The ld DR referred to the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), whereby Section 144B of the Act was introduced w.e.f 01.04.2021. The ld DR referred to CBDT’s order u/s 119 of the Act dated 06.09.2021 and its amendment vide order dated 22.09.2021 wherein all assessment was directed to be conducted under the Faceless scheme. The ld DR also referred to the Finance Act, 2022 which amended section 144B to include assessments, reassessments or recomputation under Sections 143(3), 144 and 147 of the Act w.e.f. 01.04.2022. 8. We have heard the rival submissions and perused the material available on record. The legal challenge that is posed before us for adjudication of the validity of assessment order passed under section 147 r.w.s 144 r.w.s 144B of the Act dated 21.03.2022 by FAO, before the faceless scheme for reassessment became operational vide CBDT

Page 7 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT Notification No. 18/2022 dated 29.03.2022. The argument propounded is that since the impugned assessment proceeding u/s 147 in the instant case, was initiated under the scheme specified in sub-section (1) of section 151A of Income Tax Act, 1961 i.e in faceless manner much prior to the said notification dated 29.03.2022, such assessment proceedings were conducted in faceless manner without any authority of law, hence the same is not sustainable in law. The argument is that the sub-section (1) of Section 151A of Income Tax Act, 1961 gets legal validity for implementation only on 29.03.2022 and not any time before that. 9. In order to adjudicate on the issue involved, we have to delve into the history of Faceless Assessment in the Income Tax Department. The statutory scheme of faceless assessment, brought in a paradigm shift in the way the assessment was to be conducted. The hon’ble Delhi High Court in the case of T.K.S. Builders (P.) Ltd. vs. Income- tax Officer [2024] 167 taxmann.com 759 (Delhi)/[2024] 469 ITR 657 (Delhi)[28-10-2024] recognized the purpose as well as evolution of the Faceless assessment scheme. It noted that the faceless scheme of assessment came to be introduced, for the first time on 12.09.2019 through the 'E-assessment Scheme, 2019', which thereafter came to be referred to as the 'Faceless assessment scheme, 2019' vide the

Page 8 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT amending Notification No. 60/2020-Income Tax dated 13.08.2020. Where the 'E-assessment Scheme, 2019' dated 12.09.2019 included ‘assessment’ u/s 143(3) only, the ‘Faceless assessment scheme’, 2019 added assessment u/s 144 of the act. Thereafter, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), introduced Section 144B of the Act w.e.f 01.04.2021 to cover assessments under Sections 143(3) and 144 which was subsequently enlarged by Finance Act, 2022 to include assessments as well as reassessments or recomputation under Sections 143(3), 144 and 147 of the Act w.e.f. 01.04.2022. The provisions of Section 144B, beginning with “Notwithstanding anything to the contrary contained in any other provision of this Act”, mandated and prescribed the process of the assessment to be made by NaFAC in faceless nmanner. The provision of section 144B w.e.f. 01.04.2021 are reproduced below for ready reference: [Faceless Assessment. 144B. (1) Notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely:— ******** The provision of section 144B w.e.f. 01.04.2022 is as under: Faceless Assessment. 144B. (1) Notwithstanding anything to the contrary contained in any other provision of this Act, the assessment, reassessment or recomputation under sub- section (3) of section 143 or under section 144 or under section 147, as the case

Page 9 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT may be, with respect to the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely:— **********

F No. 187/3/2020-ITA-I Ministry of Finance Department of Revenue (Central Board of Direct Taxes) North Block, New Delhi Dated, the 6th September, 2021 ORDER Subject:- Order under section 119 of the Income-tax Act, 1961 (the Act) providing exclusions to section 144B of the Act. The Faceless Assessment Scheme, 2019 (the Scheme) has been incorporated in the Act vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 144B of the Act pertaining to Faceless Assessment has been inserted by the said amendment w.e.f. 01.04.2021. 2. The Central Board of Direct Taxes vide Order F.No.187/3/2020-ITA-I dated 13th August, 2020 (the Order) read with order under section 119 of the Act regarding mutatis mutandis application of Orders, Circulars etc. issued in order to implement the Scheme to Faceless Assessment u/s 144B of the Act, F.No.187/3/2020-ITA-I dated 31st March, 2021 directed that all the Assessment Orders shall be passed by the National Faceless Assessment Centre (NaFAC) u/s 144B of the Act except as under:- i. Assessment orders in cases assigned to Central Charges. ii. Assessment orders in cases assigned to International Tax Charges. 3. In partial modification of the said Order, the Central Board of Direct Taxes in exercise of powers under section 119 of the Act, hereby directs that in addition to exceptions (i) & (ii) provided in Para 2 of the Order, the following exception is also hereby added as under:- iii. Assessment Orders in cases where pendency could not be created on ITВА because of technical reasons or cases not having a PAN, as the case may be.

Page 10 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT 4. Further, the Central Board of Direct Taxes clarifies that assessment in cases transferred by the Principal Chief Commissioner or the Principal Director General in charge of National Faceless Assessment Centre (NaFAC) u/s 144B(8) of the Act shall be handled as per the procedure specified in the letter F.No. 225/97/2021/ITA-II dated 06th September, 2021. 5. This order comes into effect immediately. -sd- (Sourabh Jain) Under Secretary (ITA-I),CBDT 11. The amended order u/s 119 of the Act dated 22.09.2021 enlarging the scope of assessment to include reassessment u/s 147 of the Act, is reproduced hereunder:- "ORDER UNDER SECTION 119 OF THE INCOME-TAX ACT, 1961 PROVIDING EXCLUSIONS TO SECTION 144B OF THE ACT ORDER F. NO. 187/3/2020-ITA-I, DATED 6-9-2021 AS AMENDED BY ORDER F. NO. 187/3/2020-ITA-1, DATED 22-9-2021 1. The Faceless Assessment Scheme, 2019 (the Scheme) has been incorporated in the Act vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Section 144B of the Act pertaining to Faceless Assessment has been inserted by the said amendment w.e.f. 1-4-2021. 2. The Central Board of Direct Taxes vide Order F.No. 187/3/2020-ITA-I dated 13th August, 2020 (the Order) read with order under section 119 of the Act regarding mutatis mutandis application of Orders, Circulars etc. issued in order to implement the Scheme to Faceless Assessment under section 144B of the Act, F.No. 187/3/2020- ITA-I dated 31st March, 2021 directed that all the Assessment Orders shall be passed by the National Faceless Assessment Centre (NaFAC) under section 144B of the Act except as under:- i)Assessment orders in cases assigned to Central Charges ii)Assessment orders in cases assigned to International Tax Charges iii)assessment order in cases where pendency could not be created on ITBA portal because of technical reasons or cases not having a PAN, as the case may be. iv)Assessment orders in cases a) set aside to be done de novo or b) to be done u/s 147 of the act for which the time limit for completion expires on 30.09.2021 pending with the jurisdictional Assessing officer as on 11.09.2021 on thereafter, which cannot be completed as per the procedure laid down under section 144B of the act due to technical/ procedural constraints in the given period of limitation.] 3. In partial modification of the said Order, the Central Board of Direct Taxes in exercise of powers under section 119 of the Act, hereby directs that in addition to

Page 11 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT exceptions (i) & (ii) provided in Para 2 of the Order, the following exception is also hereby added as under:- iii. Assessment Orders in cases where pendency could not be created on ITBA because of technical reasons or cases not having a PAN, as the case may be. 4. Further, the Central Board of Direct Taxes clarifies that assessment in cases transferred by the Principal Chief Commissioner or the Principal Director General in charge of National Faceless Assessment Centre (NaFAC) under section 144B(8) of the Act shall be handled as per the procedure specified in the letter F.No. 225/97/2021/ITA-II dated 6th September, 2021. 5. This order comes into effect immediately." Emphasis supplied 12. We note that vide the above Circular dated 22-9-2021 issued u/s 119 of the Act, the Central Board of Direct Taxes explicitly directed to implement the Faceless Assessment Scheme u/s 144B of the Act, and further directed that all the Assessment Orders shall be passed by the National Faceless Assessment Centre (NaFAC) under section 144B of the Act except as listed in sub clause (i), (ii), (iii) and (iv) of clause 2 of the said Circular. The above Circular specifically covered assessment to be made u/s 147 of the act also. Only those assessment u/s 147 were excluded for which the time limit for completion expires on 30.09.2021 and were pending with the jurisdictional Assessing officer as on 11.09.2021 or thereafter, which cannot be completed as per the procedure laid down under section 144B of the act due to technical/procedural constraints in the given period of limitation. 13. We further note that the CBDT designated authorities charged with the conduct of faceless assessment in respect of various territorial areas vide Notification issued u/s 120 of the Act dated

Page 12 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT 13.08.2020. We further refer to the hon’ble Delhi High Court decision in the case of TKS Builders (supra) which held that the faceless assessment itself conferred "concurrent” jurisdiction upon JAO as well as FAO to take up assessment proceedings. 14. Further, the legislature carried out the amendment vide Finance Act, 2026 which introduced a new Section 147A into the Income-tax Act, 1961, legally validating reassessment notices issued by JAOs instead of solely through the faceless mechanism with retrospective Effect from April 1, 2021 as follows: 147A. Notwithstanding anything contained in any judgment, order or decree of any court or in section 151A or in any scheme framed thereunder, for the removal of doubts, it is hereby clarified that the Assessing Officer for the purposes of sections 148 and 148A shall mean and shall always be deemed to have meant to be an Assessing Officer other than the National Faceless Assessment Centre or any assessment unit referred to in sub-section (3) of section 144B. 15. In such facts and circumstances, we are therefore of the considered view that a harmonious and constructive reading of the statute u/s 144B of the Act as on 01.04.2021; the Circulars dated 22.09.2021 issued by the CBDT u/s 119 of the Act as referred herein above; the decision of the hon’ble Delhi High Court in the case of TKS Builders (supra) and the legislative amendment vide Finance Act 2026 in section 147A of the Income Tax Act, lead us to conclude that the

Page 13 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT NaFAC, in the instant case, is empowered to conduct all assessment including assessment u/s 147 r.w.s.144 r.w.s.144B of the Act u/s 147 of the Act dated 21.03.2021. As noted above, in the instant case, the first notice u/s 143(2) and 142(1) was issued by JAO and thereafter NaFAC followed the procedure enumerated in the section 144B and completed the assessment. The instant case is also not covered in the exception contained in clause (iv)(b) of para 2 of CBDT circular dated 22-9-2021 as the time limit for passing the order was 31.03.2022. 16. Coming to the decisions of coordinate Benches of ITAT, we find that the ld AR relied on several decisions of Delhi, Kolkata, Guwahati and Patna Benches of ITAT. The first of the decision was in the case of ITAT Kolkata in Nabiul Industrial Metals Pvt Ltd in ITA 1328/Kol/2024 dated 15.10.2024, wherein the jurisdiction u/s 151A r.w.s 144B was assumed by the NFAC from 29.11.2021 when notice u/s 142(1) was issued by NFAC and order was passed on 31.03.2022. The ITAT Kolkata held that as Section 151A came into statute w.e.f 01.11.2021 but Notification No 18/2022 vide No SO 1466(E) notified it only on 29.03.2022, hence the assumption of jurisdiction prior to 29.03.2022 is invalid. We find, chronologically, the exact same reasoning was followed in Md Mahimud SK ITA 2230/Kol/2024 dated 04.03.2025, Kashyap Construction & Developers ITA 716/Pat/2024 dated

Page 14 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT 02/04/2025, John Chhetri ITA 139/GTY/2025 dated 02/09/2025. Then came the decision of Delhi Bench of ITAT in the case of Suresh Chand ITA 4110/Del/25 dated 30/07/2025, which in turn had followed the Kolkata ITAT in the case of Nabiul Industrial Metals Pvt Ltd (supra). The Delhi ITAT followed the decision of Suresh Chand (supra) in the case of Atar Singh ITA 186/Del/2025 dated 20.08.2025 and in the case of Vinay Kumar ITA 3543/Del/2025 dated 26/02/2026. 17. First of all, we find that the ITAT in above cases were dealing with assessments made u/s 151A of the Act. The facts of the instant case is distinguishable as in the instant case, the assessment is made u/s 147 r.w.s 144 r.w.s 144B of the Act. The NaFAC never invoked the provisions of section 151A to conduct the assessment proceedings. Furthermore, we find the Coordinate Benches of ITAT in the above cases, were not presented with the schemes of Faceless assessment. The various Circulars, especially the Circulars, post the commencement of the Faceless Assessment Scheme 2019, followed by an order u/s 119 of the Act dated 06.09.2021 and amending order dated 22.09.2021, were not placed before the ITAT. The statutory provisions of section 147A introduced by Finance Act, 2026, were also not put before the ITAT for consideration. Thus, we hold that the legal mandate of section 144B coupled with Circulars dated 22.09.2021

Page 15 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT issued by CBDT u/s 119 of the Act, empowers the NaFAC as well as the JAO to conduct assessment/reassessment proceedings u/s 147 of the Act in Faceless manner. We are of the considered view therefore, that the assessment made by NaFAC does not suffers from any legal infirmities. Further, it would not be out of place to reiterate that circulars and instructions issued by the CBDT in exercise of its powers under section 119, are binding on the Departmental authorities, as held by Hon'ble Supreme Court in the case of UCO Bank v. CIT [(1999) 237 ITR 889 (SC)]. We therefore hold that the NaFAC had assumed valid jurisdiction to conduct the proceedings and had full authority of law. The ground 2 and 4 is dismissed. 18. On merits, we find that the NaFAC has passed the order ex- parte u/s 144 of the Act. The ld AR of the assessee has explained that the assessee could not attend the assessment proceedings because of his suffering from mental illness since 2011. In such facts and circumstances of the case, we are of the considered view that in the interest of natural justice, the CIT(A) may give reasonable opportunity to the assessee to represent the case. We therefore, set aside the issues of cash payments for goods and services and rent received to the file of the CIT(A) for fresh adjudication. The CIT(A) is directed to accord three effective opportunities to the assessee and assessee is

Page 16 of 18

ITA No. 1218/DEL/2026 [A.Y 2017-18] Satpal Nandrajog vs DCIT likewise directed to avail the opportunities and submit documents/evidence as required by the CIT(A). The appeal of the assessee is decided in aforesaid terms. 19. In the result, appeal filed by the assessee in ITA No.1218/Del/2026 is partly allowed for statistical purpose. Order pronounced in the open court on 13.08.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 13.08.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

Page 17 of 18