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Facts
The assessee filed an appeal against an order dated 23.06.2025 by the NFAC for AY 2015-16. The assessee sought to raise additional grounds challenging the assumption of jurisdiction under Section 147.
Held
The Tribunal held that a legal ground challenging jurisdiction can be raised at any stage, relying on a Supreme Court decision. The assessment order was found to be bad in law.
Key Issues
Whether the assessment order passed by the Faceless mechanism, with a notice issued by the Jurisdictional Assessing Officer, is valid and whether the assessee can raise additional grounds challenging jurisdiction before the Tribunal.
Sections Cited
147, 144, 148, 148A, 151A
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Before: Shri M. Balaganesh & Shri S.S. Viswanethra Ravi
Year: 2015-16 Asmath Basha Akthar Basha, Vs. The Income Tax Officer, D. No. 51-9, Bharathi Nagar, IInd Ward 1, Cross, Newpet, Krishnagiri 635 001, Krishnagiri. Tamil Nadu. [PAN: AFGPA0229L] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri S. Bhupendran, Advocate ��थ� की ओर से/Respondent by : Shri C.P. Solomon, JCIT सुनवाई की तारीख/ Date of hearing : 23.10.2025 घोषणा की तारीख /Date of Pronouncement : 24.10.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 23.06.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2015-16.
When the appeal was taken up for hearing, the ld. AR Shri S. Bhupendran, Advocate drew our attention to the application seeking permission to file additional grounds of appeal dated 10.10.2025 placed on record, submits that the assessee raised additional grounds of appeal challenging assumption of jurisdiction under section 147 of the Income Tax Act, 1961 [“Act” in short] and passing assessment order under section 147 r.w.s. 144 of the Act by the Faceless mechanism [Assessing Officer], which is not in accordance with the provisions of law. The ld. AR submits that it is a legal ground, which goes to the root of the case, raised for the first time before the Tribunal. He argued that the said legal ground can be raised at any stage of the proceedings including this Tribunal and placed reliance on the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Reported in 223 ITR 383 (SC). He prayed to admit the said additional ground and proceed to decide the said issue as preliminary ground.
The ld. DR submits that the assessee having participated before the Assessing Officer and the ld. CIT(A) did not raise the same before the said authorities. He argued that it requires examination of the facts and prayed to dismiss the said ground.
Having heard both the parties, we note that the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. (supra) was pleased to hold that the legal ground can be raised at any stage of the proceedings including this Tribunal. The ld. DR did not dispute the decision of the Hon’ble Supreme Court and we find no new facts are required to be examined and therefore, we proceed to admit additional ground.
The additional ground raised
by the assessee is reproduced herein below:
1. The Reassessment Proceeding is null and void, as the order under section 148A(d) and notice under section 148 dated 11.04.2022 were issued by the Income Tax Officer, Ward-1, Krishnagiri, being the Jurisdictional Assessing Officer (JAO) violating section 151A and Faceless Reassessment Scheme, 2022.
6. The ld. AR submits that the order under section 148A(d) of the Act and notice under section 148 of the Act dated 11.04.2022 were issued by the Income Tax Officer, Ward I, Krishnagiri. The ld. AR vehemently argued that the assessment order passed by the Faceless mechanism [Assessing Officer] is bad in law in terms of the decision of the Hon’ble High Court of Madras in the case of Mark Studio India (P.) Ltd. V. ITO in W.A. No. 781 of 2025 dated 24.06.2025 and prayed to quash the assessment order passed by the NFAC without issuing notice under section 148A(d) of the Act.
The ld. DR Shri C.P. Solomon, JCIT supported the order passed the Assessing Officer.
We have heard both the parties and perused the material available on record. In this case, we note that the assessment order was passed under section 147 r.w.s. 144 of the Act by the assessment unit of NFAC. Further, we note that the notice under section 148 of the Act was issued by the Jurisdictional Assessing Officer. On perusal of the decision of the Hon’ble High Court of Madras in the case of Mark Studio India (P.) Ltd. V. ITO (supra), we note that the Hon’ble High Court was pleased to hold that the assessment made by the assessment unit of NFAC is not valid if the order and notice under section 148A(d)/148 of the Act issued by the Jurisdictional Assessing Officer, but, however, liberty was given to the Revenue to re-ignite the notice in case the Hon’ble Supreme Court interferes with the order of the Hon’ble High Court of Bombay in the case of Hexaware Technologies Ltd. V. ACIT 464 ITR 430 (Bombay). Accordingly, we hold that the assessment order dated 23.03.2023 passed by the assessment unit of NFAC is bad in law and it is quashed. The ld. AR prayed to keep open grounds of appeal filed along with Form 36 for the assessee in case the Hon’ble Supreme Court interferes with the decision of the Hon’ble High Court of Bombay in the case of Hexaware Technologies Ltd. V. ACIT (supra). Accordingly, the ground raised by the assessee on assumption jurisdiction raised by way of additional ground is allowed and the grounds raised under Form 36 become academic in view of our decision in the additional ground raised by the assessee.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 24th October, 2025 at Chennai.