DEEPAK SETH,KOLKATA vs. ITO, WARD 47(6), KOLKATA, KOLKATA

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ITA 2114/KOL/2026Status: DisposedITAT Kolkata26 October 2026AY 2013-201410 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order dated March 21, 2022, passed by the National Faceless Assessment Centre (NFAC) was without jurisdiction. This was because Section 151A of the Act, which deals with faceless assessment of income escaping assessment, was notified and made effective from March 29, 2022, vide Notification No. 18/2022. Therefore, any assessment framed prior to this date under this section was invalid. The Tribunal relied on the coordinate bench decision in MD Mahimud SK Vs. ITO. Consequently, Ground No. 4 of the assessee's appeal was allowed, and the assessment order was quashed. Regarding Ground No. 5, the Tribunal found that the new regime for assessment under Sections 147 to 151 came into force from April 1, 2021. Although the notice under Section 148 was dated March 31, 2021, it was served on April 16, 2021. The AO did not treat this notice as a show-cause notice, nor did they call upon the assessee to furnish details, and crucially, no order under Section 148A(d) was passed. The assessment was framed under the old regime. The Tribunal held that the notice and the consequent assessment were invalid as the AO failed to follow the mandatory procedures under the new regime. Therefore, Ground No. 5 was also allowed, and the notice and assessment were quashed. The appeal of the assessee was allowed.

What were the facts?

The assessee, Deepak Seth, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2013-14. The appeal was filed 154 days beyond the prescribed limitation period, which the Tribunal condoned due to bonafide and genuine reasons. The assessee's case was reopened under Section 147 of the Income Tax Act, 1961, as no return of income was filed. A notice under Section 148 was issued on March 31, 2021, and complied with by filing a return on May 9, 2021, declaring an income of ₹3,36,580/-. Subsequently, notices under Sections 143(2) and 142(1) were issued but not complied with. The Assessing Officer (AO) assessed the total income at ₹2,18,81,152/- under Section 147 read with Section 144 of the Act via an order dated March 21, 2022. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the National Faceless Assessment Centre erred in assuming jurisdiction under Section 151A read with Section 144B of the Act from January 17, 2022, when the faceless scheme was not applicable prior to March 29, 2022. (Question of law) 2. Whether the CIT(Appeals) erred in upholding the validity of the notice dated March 31, 2021, issued under Section 148 of the Act, despite it being digitally signed on April 16, 2021, after the new regime under Sections 147-151 came into force on April 1, 2021. (Question of mixed law and fact) Assessee's Contentions: For Ground 4: The assessment framed by the National Faceless Assessment Centre was without jurisdiction as Section 151A was effective from March 29, 2022, and the assessment order was dated March 21, 2022. The case is covered by the decision in MD Mahimud SK Vs. ITO. For Ground 5: The notice under Section 148 dated March 31, 2021, served on April 16, 2021, is invalid as it was issued after the new regime under Section 147 came into force on April 1, 2021, and the mandatory procedures of the new regime were not followed. Revenue's Contentions: No specific contentions were recorded for the revenue on these grounds.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144B,Section 151A,Section 143(2),Section 142(1),Section 144,Section 148A(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM Shri Abhishek Bansal, AR Shri

For Appellant: Shri Abhishek Bansal, AR
For Respondent: Shri Sudhanshu
Hearing: 05.08.2026Pronounced: 26.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM

ITA No.2114/KOL/2026 (Assessment Year: 2013-14) Deepak Seth ITO, Ward 47(6), Kolkata 123, 3rd Floor, Chittaranjan Aayakar Bhawan, 3rd Floor, 3, Avenue Govt. Place, Kolkata-700001, Vs. Md Ali Park, Kolkata-700073, West Bengal West Bengal (Appellant) (Respondent) PAN No. ALQPS1308A Assessee by : Shri Abhishek Bansal, AR Revenue by : Shri Sudhanshu Shekhar Gautam, DR

Date of hearing: 05.08.2026 Date of pronouncement: 26.10.2026

O R D E R Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as the “Ld. CIT(A)”] dated 15.10.2025 for the AY 15.10.2025.

2.

At the outset, we note that the appeal of the assessee is barred by limitation by 154 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal which is for bonafide and genuine reasons. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the

materials available on record, we find that the delay is for bonafide and genuine reasons and, hence, we condone the delay and adjudicate the appeal in the following paras.

3.

At the time of hearing , the assessee pressed down number 4 and 5 which are extracted below:

“4. For that the National Faceless Assessment Centre erred in having assumed Jurisdiction u/s 151A r.w.s 144B of the Act from 17.01.2022 when they were not empowered under any notification about the applicability of the faceless scheme for making assessment in faceless manner prior to 29.03.2022. 5. For that the Ld. CIT(Appeals) erred in upholding the validity of the notice dated 31.03.2021 issued u/s 148 of the Income Tax Act, 1961, despite the same being digitally signed on 16.04.2021, i.e., after the new regime u/s 147-151 came into force w.e.f. 01.04.2021” 4. The issue raised in ground number 4 which is against the assessment framed by the National Faceless Assessment Centre vide order dated 21-3-2022, which is prior to the notification issued by the competent authority and therefore order is without jurisdiction and same is prayed to be quashed.

5.

The facts in brief are that the assessee did not file return of income for the impugned assessment year. The case of the assessee was re-opened u/s 147 of the Act. Thereafter, notice u/s 148 of the Act was issued on 31.03.2021 which was complied with by filing the return of income on 09.05.2021, declaring total income at ₹3,36,580/-.Accordingly, notices u/s 143(2) and 142(1) along with questionnaire were issued and served upon the assessee which was not complied with. Thus, in absence of any compliance to the notices and keeping in Page 2 of 11

view the facts of the case and also the materials available on record, the ld. AO assessed the total income at ₹2,18,81,152/- u/s 147 read with section 144 of the Act vide order dated 21.03.2022.

6.

In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee.

7.

After hearing the rival contentions and perusing the materials available on record, we 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)]. Considering these facts, we are of the considered view that the issuance of notices and thereafter framing of assessment by the NFAC, dated 21.03.2022 were without jurisdiction as the Provisions of Section 151A of the Act were effective from 29.03.2022.Consequently, the assessment order passed by the AO cannot be sustained. The case of the assessee is squarely covered by the decision of the co-ordinate in case of MD Mahimud SK Vs. ITO in ITA no. 2230 & 2229/KOL/2024 vide order dated 04.03.2025, wherein the co-ordinate Bench has decided the issue by observing and holding as under: -

“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 Page 3 of 11

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 provisions 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.” 8. In view of the above facts and the decision of the coordinate bench, we are inclined to quash the assessment framed by the ld. AO/ NFAC. The ground no. 4 of the appeal of the assessee is allowed.

9.

The issue raised in ground number 5 is against the validity of notice issued under section 148 of the Act on 31stMarch 2021 which was a digital signed on 16-4-2021, after a new regime

Page 7 of 11

of assessment came into operation u/s 147 of the Act, which was effective from 1-4-2021.

10.

The facts in brief are that the assessee did not file the original return of income for the impugned assessment year.Thereafter case of the assessee was reopened under section 147 read with section 148 of the Act for large cash deposits into the bank accounts with HDFC Bank and ICICI Bank Limited.It was also noted that assessee during the year has made credit card payments amounting to₹2,01,646/- and also earned brokerage amounting to rupees ₹3,77,477/- on which TDS under section 194H was deducted.The AO also noted that besides the above transactions the assessee has also gone into making of term deposits of ₹7,20,000/- .Accordingly, notice under section 148 of the Act was issued on 31stMarch 2021 by ITO, ward 47(2), Kolkata, which was served on 16-4-2021.Consequently the assessment framed under section 147 read with section 144 read with section 144B of the Act, vide order dated 21stMarch 2022 by making various additions.

11.

The learned CIT(A) dismissed the appeal of the assessee reframing the assessment.

12.

After hearing the rival contention and perusing the materials available on record, we find that with effect from 1-4-2021 new regime of assessment under section 147 to 151 of the Act has come into force.However, the AO has issued notice under section 148 of the Act, which was dated 31stMarch 2021 Page 8 of 11

but served on 16thApril 2021.We also note that thereafter the AO neither did treat the said notice as show cause notice nor did he call upon the assessee to furnish the details. We also note that no order under section 148(A)(d) of the Act was passed and the assessment was framed under the old regime. In our considered view the assessment framed by the AO and the notice issued and served to the assessee on 16-4- 2021 as well as the assessment framed consequently are invalid and cannot be sustained as the AO has not followed the mandatory procedure under the new regime.Therefore, the notice as well as the assessment framed are hereby quashed. The ground no. 5 is allowed.

13.

In the result, the appeal of the assessee is allowed.

Order pronounced on 26.10.2026.

Sd/- Sd/- (DUVVURU RL REDDY) (RAJESH KUMAR) (VICE PRESIDENT) (ACCOUNTANT MEMBER) Kolkata, Dated: 26.10.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// // TRUE COPY // Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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