AWARD VINTRADE (P) LTD.,,KOLKATA vs. ITO, WARD 11(1),, KOLKATA

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ITA 994/KOL/2026Status: DisposedITAT Kolkata29 June 2026AY 2014-201510 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment framed by the NFAC was without valid jurisdiction because the provisions of Section 151A of the Income Tax Act, 1961, were not effective on the date the assessment was made. Consequently, the assessment order and the penalty levied were quashed.

What were the facts?

The assessee's income was assessed by the National Faceless Appeal Centre (NFAC) based on alleged bogus share premium and investment. The assessee argued that the NFAC order was without jurisdiction as the relevant faceless assessment provisions were not notified at the time of assessment.

What were the issues?

The primary issue was whether the assessment proceedings conducted by the NFAC were valid, given the notification date of the faceless assessment provisions. A secondary issue concerned the validity of the penalty levied in the absence of a valid assessment.

Which sections of the Income-tax Act were involved?

Section 151A,Section 147,Section 144B,Section 142(1),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI GEORGE MATHAN, JM & SHRI RAJESH KUMAR, AM

For Appellant: Shri Manoj Kataruka, AR
For Respondent: Shri Dipu Koley, DR
Hearing: 22.06.2026Pronounced: 29.06.2026

Heard together (4 matters)

ITA Nos. 973/KOL/2026
ITA Nos. 974/KOL/2026
ITA Nos. 994/KOL/2026
ITA Nos.995/KOL/2026

Read from the judgment's own cause title. This page is filed under one of them.

Per Bench:

These are appeals preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”]even dated 02.03.26, 04.03.2026 for the AYs 2013-14,2014-15, 2017-18. The penalty was levied u/s 271(1)(c) of the Act vide order dated 11.11.2021 by NFAC, Delhi.

ITA Nos. 973/KOL/2026 3. The only issue raised by the assessee is against upholding the assessment order by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] vide order dated 21.03.2022, which is without jurisdiction and is accordingly, invalid.

4.

The facts in brief are that the assessee filed the return of income on 29.09.2014 for A.Y. 2017-18, showing total loss at ₹5,290/-. The ld. AO noted that assessee was a beneficiary, who had received ₹70,00,490/- through rotation of funds in the guise of bogus share premium money, bogus investment etc from the Banka Group entities managed and controlled by Shri Mukesh Banka. Subsequently, the case of the assessee transferred to NaFAC. Thereafter, notice u/s 142(1) of the Act dated 02.12.2021 was issued which was replied by the assessee. Finally , the impugned assessment order was passed u/s 147 r.w.s. 144B on 21.03.202 by the NFAC, Delhi by assessing income at ₹70,16,700/- to the total income of the assessee.

2.

The ld. AR vehemently submitted before us that the order passed by the NFAC is without jurisdiction as though the provisions dealing with the faceless assessment of income escaping the assessment u/s 151A of the Act were brought on statute book by Taxation and Other Law (Relaxation and Amendment of Certain Provisions) Act, 2020, with effect from

3.

The ld. DR on the other hand submitted that the assessment has been framed by the NFAC after issuing notice as per the provisions of Section 151A of the Act which were brought on the statute book with effect from 1.11.2020. Therefore, the legal issue raised by the assessee may kindly be dismissed.

4.

After hearing the rival contentions and perusing the materials available on record, we note that the assessment has been framed by the NFAC vide order dated 21.03.2022. We further find that the Section 151A of the Act deals with the faceless assessment of income escaping assessment and was brought on the statue book by taxation and other law (relaxation and amendment of certain provisions) Act, 2020, with effect from 01.11.2020 which was notified on 29.03.2022 vide notification no.18/2022/F. No. 370142/16/2022-TPL(Part)]. Therefore, the issuance of notice u/s 142(1) of the Act and thereafter framing of assessment by the NFAC, in our opinion, are

“11. We have perused the section of Section 151A of the Act, which deals with the faceless assessment of income escaping assessment and was brought on the statute book by taxation and other law (realization and amendment of certain provisions) Act, 2020, with effect from 01.11.2020 which was notified on 29.03.2022 vide notification no.18/2022/F. No. 370142/16/2022-TPL(Part)]. Therefore, the assessment proceedings were taken by the National Faceless Assessment Centre, Delhi by issuing notice u/s 142(1) dated 09.02.2022 and thereafter the assessment was framed accordingly after issuing show cause notice which in our opinion is without jurisdiction. The provisionw of Section 151A of the Act were brought on the statute book with effect from 01.11.2020. However, the same were made effective and applicable with effect from 29.03.2022 vide notification no. when the CBDT notified the new scheme for assessment of income escaping assessment scheme, 2022. In our considered view the assessment framed is without jurisdiction and cannot be sustained. The case of the assessee find force from the decision of Nabiul Industrial Metal Pvt. Ltd., Paschim Medinipur VS. I.T.O., in ITA no. 1328/KOL/2024 for A.Y. 2017-18, the order dated 15.10.2024, wherein a similar issue has been decided in favor of the assessee. For the sake of ready reference, the notice issued u/s 142(1) dated 09.02.2022 and show cause notice dated 17.03.2022, are extracted below:-

12.

Considering the above facts and legal position, we are of the considered opinion that the order passed by the NFAC, Delhi is without jurisdiction and is hereby quashed. The appeal of the assessee is allowed. 13. The additional ground raised in ITA No. 2230/Kol/2024 A.Y.2017-18 is similar to one as decided by us in ITA No. 2229/Kol/2024 A.Y. 2015-16. Therefore, our decision would, mutatis mutandis, apply to this appeal as well. The appeal of the assessee is allowed. 14. In the result, the appeal of the assessee is allowed.” 4.1. In view of the above facts and circumstances and following the decision of the coordinate bench as discussed above , we are inclined to quash the assessment framed by the ld. AO/ NFAC.

5.

The appeal of the assessee is allowed.

ITA No. 994 & 995/KOL/2026

The issue invlolved in these appeals is similar to one as decided by us in ITA No. 993/Kol/2026(supra). Therefore our decision in ITA No. 993/Kol/2026(supra) would , mutatis mutandis, apply to these appeals as well. Accordingly the appeals are allowed.

For A.Y. 2013-14 ITA No. 974/KOL/2026

6.

This is an appeal filed against the upholding penalty order by ld. CIT(A) in ITA No. 974/KOL/2026. Since we have already quashed the assessment framed by the ld. AO/ NFAC while adjudicating the quantum appeal of the assessee in ITA No.973/KOL/2026(supra), therefore, the penalty levied by the Assessing Officer and confirmed by the ld. CIT(A) /NFAC would also stand quashed as the very foundation of levy of penalty does not more survive. The appeal is allowed.

7.

In the result, all four appeals of the assessee are allowed.

Order pronounced on 29.06.2026.

Sd/- Sd/- (GEORGE MATHAN) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 29.06.2026 Sudip Sarkar, Sr.PS

Asst. Registrar Income Tax Appellate Tribunal, Kolkata

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