KILARI LAKSHMI SUTHAA,BENGALURU vs. INCOME TAX OFFICER, WARD - 4(1)(3), BENGALURU

ITA 1447/BANG/2026Status: DisposedITAT Bangalore28 September 2026AY 2020-217 pages
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What did the Tribunal hold?

The Tribunal held that the learned CIT(A), NFAC, wrongly assumed jurisdiction in passing the impugned orders. The Tribunal referred to CBDT Circular dated 06/10/2022 and a notification dated 13/10/2022, which stipulated that appeals against penalty orders passed in cases where assessment was completed pursuant to a search under section 132 of the Act remain with the jurisdictional CIT(A) and are not transferred to the NFAC, even after the implementation of the Faceless Appeal Scheme, 2021. Therefore, the Tribunal found the orders passed by the NFAC to be without jurisdiction. The Tribunal set aside the impugned orders and restored the appeals to the file of the jurisdictional CIT(A) for de novo adjudication. Ground No. 2 raised by the assessee, concerning jurisdiction, was allowed. Other grounds were kept open.

What were the facts?

The assessee, Kilari Lakshmi Suthaa, filed appeals against penalty orders passed under section 270A of the Income Tax Act, 1961, for assessment years 2017-18, 2019-20, and 2020-21. These penalty orders arose from assessment proceedings initiated after a search action under section 132 of the Act. The appeals were filed before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The assessee's primary contention was that the NFAC lacked jurisdiction to hear these appeals, arguing that jurisdiction should lie with the jurisdictional Commissioner of Income Tax (Appeals) based on CBDT Circulars and notifications concerning appeals arising from search cases. The Tribunal consolidated the appeals for a common decision.

What were the issues?

1. Whether the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), had the jurisdiction to decide the appeals against penalty orders passed under section 270A of the Income Tax Act, 1961, when the assessment was completed in pursuance of a search under section 132 of the Act. Assessee's Contention: The assessee argued that the appeals should have been heard by the jurisdictional CIT(A) and not the NFAC. Reliance was placed on a CBDT Circular dated 06/10/2022, which, according to the assessee, clarified that appeals against penalty orders in search cases fall outside the purview of the Faceless Appeal Scheme and remain with the jurisdictional CIT(A). Revenue's Contention: The judgment does not record any specific arguments made by the revenue on this jurisdictional issue. However, the fact that the NFAC passed the impugned orders suggests an assertion of jurisdiction by the revenue's appellate authority.

Which sections of the Income-tax Act were involved?

Section 270A,Section 250,Section 153A,Section 144,Section 153D,Section 132,Section 246A,Section 248

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

PER SANDEEP SINGH KARHAIL, JUDICIAL MEMBER:

The assessee has filed the present appeals against the separate impugned orders, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centr

The order continues below.

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