MATIULLAH,SIDDHART NAGAR vs. INCOME TAX OFFICER, WARD-BASTI-NEW, BASTI

PER SUDHANSHU SRIVASTAVA, J.M.:

This appeal has been preferred by the Assessee against the order dated 29.07.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2019-20.

2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made total cash deposits of Rs.2,09,50,170/- and cash withdrawal of Rs.24,60,000/- from the Bank Account No.3139808215 maintained with Central Bank of India during the year under consideration. The case of the assessee was reopened under section 147 of the Income Tax Act, 1961

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(hereinafter called “the Act’) after issuing notice to the assessee under section 148 of the Act. In response to the said notice under section 148 of the Act, the assessee filed his return of income on 13.01.2024 declaring a total income of Rs.1,53,600/-. From the perusal of bank account statement, the Assessing Officer (AO) noticed that the assessee had made total cash deposits of Rs.1,20,83,972/- in his Bank Account No.3139808215 maintained with Central Bank of India during the year under consideration. After considering the replies and the return filed by the assessee, the AO issued a notice under section 142(1) of the Act dated 21.02.2024, calling for a detailed reply from the assessee against ten points raised therein. However, there was no response from the side of the assessee. In the absence of any response to this notice from the assessee, the AO held that the cash deposits made by the assessee remained unexplained and, hence, treated the cash deposits of Rs.1,20,83,972/- as unexplained credits and added the same to the income of the assessee under section 69A of the Act. The AO completed the assessment under section 147 read with section 143(3) of the Act, computing the income of the assessee as under:

Returned income : Rs.1,53,601/- Addition u/s. 69A of the Act : Rs.1,20,83,972/-

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Total income (rounded off) : Rs.1,22,37,570/-

2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271AAC(1) of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee by passing an order ex-parte qua the assessee and confirmed the order of the AO.

2.3 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

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duty bound to dispose of the appeal by passing a speaking order on each ground raised before him. 4. That on facts and in law the learned CIT(A) has grossly erred in ignoring the settled law laid down by various courts that even in absence of the appellant, the appeal cannot be dismissed in limine and the authority is bound to adjudicate each ground raised before him on merits. 5. That on the facts and in law, the learned Jurisdictional Assessing Officer erred in assuming jurisdiction and in proceeding to issue notices/orders under section 148/148A of the Act and passing of impugned reassessment order under appeal in violation of the statutory scheme of Faceless Assessment, whereby the power to issue such notices and to pass assessment/reassessment orders vests exclusively with the Faceless Assessment Officer (FAO). 6. That on the facts and in law, the learned Jurisdictional Assessing Officer erred in initiating the reopening proceeding by issue of notice u/s 148A(b), passing order u/s148A(d), issue of notice u/s 148 and consequent impugned assessment order as he failed to consider the fact that the subsequent to the amendment incorporated in Income Tax Act, 1961, with effect from 29-03-2022 all proceedings initiated by the authorities under Section 148A and under Section 148 of the I.T. Act, are all mandatorily to be proceeded in a faceless manner. 7. That on facts and in law the impugned notices issued by the Jurisdictional Assessing Officer (JAO) and the impugned reassessment order under appeal are without authority of law, void ab initio, and liable to be quashed being contrary to

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the mandate of sections 147,148A, 148, 151A and 144B of the Income Tax Act 1961 read with the Faceless Assessment Scheme, 2019. 8. That the order passed on the basis of such an invalid notice is non est in law, having been vitiated by lack of jurisdiction, and hence deserves to be declared null and void. 9. That the appellant craves leave to add, to amend, to alter, or to withdraw any of the grounds of appeal at the time of hearing, in the interest of justice. 3.0 During the course of hearing before us, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that the NFAC has erred on facts and in law in dismissing the appeal of the assessee in limine merely on the ground of non- appearance/non-response from the side of the assessee, without adjudicating the issues involved in the appeal of the assessee on merit. The Ld. A.R. prayed that the appeal of the assessee may be restored to the file of the NFAC for deciding the same on merit after considering the submissions of the assessee.

4.0 Per contra, the Ld. CIT(DR) submitted that there was non-compliance by the assessee before NFAC and, therefore, no other opportunity be given to the assessee and the appeal of the assessee be dismissed.

5.0 We have heard both the parties and have also perused the material on record. It is evident that there was complete non-

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compliance on the part of the assessee during the course of first appellate proceedings. However, looking into the facts of this case, we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the NFAC with the direction to provide one more opportunity to the assessee to present his case. We also caution the assessee to fully comply with the directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.

6.0 In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 30/04/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED:30/04/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR

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By order

Assistant Registrar/DDO