SAROJAMMA,RAMANAGAR vs. INCOME TAX OFFICER, WARD-1, , RAMANAGAR

The facts, in brief, are that the AO passed an order under section 147 r.w.s. 144 of the Act on 27.03.2023, determining the total income at ₹10,75,212/- and raising a demand of ₹12,97,800/- only. The assessee carried the matter in appeal before the learned CIT(A) who however, dismissed the appeal on 24.10.2024 by invoking the provisions of section 249(4)(b) of the Act. Against the said order, the present appeal is filed before the Tribunal. The appeal ought to have been filed on or before 23.12.2024. However, the same has been filed with a delay of 8 days.

The assessee has explained that she is a senior citizen, finding difficulty in carrying out her daily activities. It is also explained that the consultant engaged for filing the appeal was not well-versed with the online filing procedure, which resulted in a small delay. It is submitted that the delay was neither deliberate nor intentional, but occurred due to genuine hardship. Thus, the ld. AR prayed for the condonation of delay and decide the issue on merit.

On the other hand, the ld. DR, considering the length of delay, left the issue at the discretion of the bench.

We have carefully considered the submissions and the reasons placed on record. The delay involved is only 8 days. The explanation furnished appears bona fide and reasonable. It is a settled law that while considering applications for condonation of delay, a liberal approach is to be adopted. The Hon’ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Others (167 ITR 471) has held that substantial justice should prevail over technical considerations and that ordinarily, when sufficient cause is shown, the delay must be condoned.

The interconnected issues raised by the assessee in the grounds of appeal are that the learned CIT(A) erred in dismissing the appeal by invoking the provisions of section 249(4)(b) of the Act and thereby confirming the addition of Rs. 10 Lakh on account of cash deposit and Rs. 75,212 on account of alleged undisclosed interest income.

The facts in brief are that the assessee is an individual and she has not filed her return of income for the A.Y. 2017-18. As per the information available on ITBA Portal the assessee has made cash deposit of Rs. 10 lakhs during the demonetisation period in the bank account held with Canara Bank. After complying with the provision of section 148A of the Act, where the assessee remained unresponsive, the notice under section 148 of the Act dated 28th July 2022 was issued requiring the assessee to file the return of income. There were multiple notices issued but the assessee has not responded. Hence, the AO in absence of any response from the assessee treated the cash deposit as unexplained money under section 69A of the Act and added to the total income of the assessee. Further, the AO found that the assessee has also received interest on deposits from bank for Rs. 75,212/- which was not offered to tax. Accordingly, the impugned amount was also added to the total income of the assessee. Thus, the AO of the faceless assessment unit finalized the assessment under section 147 r.w.s. 144 of the Act vide order dated 27th March 2023 assessing the income at Rs. 1075212/- only.

The aggrieved assessee preferred an appeal before the learned CIT(A).

However, the AO of the faceless assessment unit, without going into the detail that the impugned case has been transferred to the JAO, has passed the order dated 27-03-2023 assessing the income at Rs. 10,75,212/- only. The assessee without depositing the demand filed the appeal in form 35. The learned CIT(A) observed that as per the provision of section 249(4)(b) of the Act, no appeal shall be admitted unless an amount equal to advance tax paid by the assessee in a situation where no return was filed by the assessee. Hence, the learned CIT(A) dismissed the appeal.

Being aggrieved by the order of the learned CIT(A) the assessee is in appeal before this Tribunal.

The learned AR before us submitted that the assessment order passed by the faceless juri iction is without authority of law. He pointed out that once the case was transferred to the juri ictional Assessing Officer, the faceless juri iction lost its power to pass any assessment order. The juri ictional AO had in fact issued a hearing notice, examined the reply of the assessee along with supporting documents, and after verifying the bank statement of the assessee’s father and other materials, accepted the explanation of the assessee. This favorable finding was recorded in the order dated 30.03.2023. Page 5 of 7 15. The ld. AR argued that despite this, the faceless juri iction, which no longer had juri iction, proceeded to pass another assessment order dated 27.03.2023. This was wholly illegal as the power to assess had already vested with the juri ictional AO. Therefore, the appeal filed against the faceless order was proper.

He further submitted that the CIT(A) dismissed the appeal on a technical ground stating that admitted taxes were not paid and hence the appeal was not maintainable. According to the AR, this finding is patently incorrect and unjustified because the main issue was of juri iction. Once it is held that the faceless juri iction had no authority to pass the order, the entire order and consequential demand automatically becomes invalid.

The learned AR prayed the Tribunal to appreciate the facts that the juri ictional AO had already accepted the assessee’s explanation in his order dated 30.03.2023 and made no addition. Hence, the order dated 27.03.2023 passed by the faceless juri iction is void ab initio and deserves to be quashed. He therefore requested us to set aside the impugned assessment order and grant relief to the assessee in the interest of justice.

On the other hand, the learned DR before us vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record. The short issue for determination is whether the assessment order dated 27.03.2023 passed by the Faceless Assessment Unit has any validity, when the juri iction over the assessee’s case had already been transferred to the Juri ictional Assessing Officer (JAO) who has also passed an order dated 30.03.2023 accepting the assessee’s explanation and not making any addition.

It is an admitted fact that the Faceless Unit passed its order on 27.03.2023 and, thereafter, the JAO passed his order on 30.03.2023. The assessee has Page 6 of 7 produced on record the order of the JAO showing that the juri iction was returned back by the NFAC to JAO by exercising the power under section 144B(8) of the Act. Thereafter JAO had duly issued hearing notices, received submissions, verified the bank statement of the assessee’s father and other documents, and on being satisfied, accepted the assessee’s explanation regarding the source of the cash. Thus, the JAO had exercised juri iction and concluded the assessment. In our considered opinion once the NFAC transferred back the case to JAO, the juri iction stood vested with the JAO only and the Faceless Unit could not have passed an order.

We also note that during the course of hearing, the learned DR submitted that he would file a report from the AO regarding the fact of two separate assessment orders having been passed. However, despite such submission, no report has been filed on record. Therefore, in absence of any rebuttal from the Revenue side, the facts stated by the assessee remain uncontroverted.

In law, an authority having no juri iction cannot pass a valid order. Any such order is a nullity and void ab initio. The Hon’ble Courts, time and again, have held that when there is a question of juri iction, technicalities like payment of admitted tax or maintainability of appeal cannot override the basic principle that an order passed without juri iction has no legal sanctity. In the present case, once the JAO had already taken over juri iction and concluded the proceedings, the Faceless Unit’s order dated 27.03.2023 stands rendered illegal and non-est.

The learned CIT(A) has dismissed the appeal on the ground that advance tax was not paid in terms of section 249(4)(b) of the Act. In our considered view, this approach is misplaced because the issue of juri iction goes to the root of the matter. When the order itself is without juri iction, the bar of section 249(4)(b) cannot come in the way of granting substantive relief. Justice requires that such an order be quashed. Accordingly, we hold that the assessment order dated 27.03.2023 passed by the Faceless Assessment Unit is without juri iction and is liable to be Page 7 of 7 quashed. Consequently, the demand raised pursuant to such order also does not survive. The order dated 30.03.2023 passed by the Juri ictional AO, accepting the explanation of the assessee, remains valid and binding. Accordingly, the ground of appeal of the assessee is allowed.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 26th August, 2025. (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member

Respondent 3. CIT

DR, ITAT, Bangalore

Guard file

CIT(A)