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Facts
The assessee's income tax assessment for AY 2013-14 was reopened and finalized by the National Faceless Assessment Centre (NFAC) on 22.09.2021, leading to a substantial addition. The assessee challenged the validity of this assessment, contending that the NFAC lacked jurisdiction because the enabling provisions of Section 151A for faceless assessments were notified on 29.03.2022, which was after the assessment order was passed.
Held
The Tribunal found that the assessment framed by the NFAC was without jurisdiction. It ruled that since Section 151A, which governs faceless assessments, was not notified on the date the assessment proceedings commenced and the order was passed, the NFAC lacked the legal authority to issue notices and complete the assessment. Consequently, the Tribunal quashed the assessment order.
Key Issues
Whether the assessment framed by the National Faceless Assessment Centre (NFAC) is valid when the enabling statutory provisions (Section 151A) were not notified at the time of issuing notices and passing the assessment order.
Sections Cited
139(1), 147, 148, 143(2), 142(1), 144B, 151A, 144, 69A, 115BBE, 271(1)(c), 271(1)(b), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
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 28.12.2024 for the AY 2013-14.
At the time of hearing, it was brought to our notice that the assessee has filed an application for admission of additional ground vide letter dated 09.10.2025. By virtue of the said additional ground the assessee has challenged the validity of assessment framed by the National Faceless assessment center, which is extracted below:-
The reassessment in this case has been done by the National Faceless Assessment Centre and order has been passed on 22.09.2021 which is the subject matter of present appeal. However the powers were conferred on the NFAC only w.c.f 29.03.2022 vide Notification dated 18 of 2022. The issue is squarely covered by plethora of judgement of Coordinate Bench of this Tribunal which have been filed in Sr. No.8 10 10 of the judgements paper book.
After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of
The ld. AR submitted before us the facts in brief that the assessee has filed the return of income u/s 139(1) of the Act on 28.09.2013, declaring total income of ₹19,250/-. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 24.03.2020, after recording reasons to believe. The assessee filed the return of income on 15.10.2020, in compliance to notice u/s 148 of the Act, declaring total income of ₹19,250/-. Notice u/s 143(2) of the Act was issued on 21.07.2020 and notice u/s 142(1) of the Act along with questionnaire was issued on 04.02.2021, which were complied with by the assessee. Finally, the assessment was completed by the ld. AR by making an addition of ₹2,14,50,000/- vide order dated 22.09.2021, passed u/s 147 read with section 144B of the Act, which was affirmed by the ld. CIT (A). The ld. AR vehemently submitted before us that all the notices were issued by the National Faceless Assessment Centre, Delhi by referring to page no.16 to 19, which comprised notices issued u/s 142(1) of the Act on 25.08.2021. The ld. AR also referred to the notice issued u/s 4.1. On the other hand , the ld. DR heavily relied on the order of authorities below by submitting that the section itself is brought on statute book with effect from 01.11.2020 and therefore, since these are the systems generated notices and accordingly, the assessment was made by the AO, the same needs to be upheld this forum also.
4.2. After hearing the rival contentions and perusing the materials available on record, we find that the notice u/s 143(2) of the Act was issued on 27.11.2020 and thereafter , the proceedings were taken over by National Faceless Assessment Centre, Delhi and notice u/s 142(1) of the Act dated 04.02.2021, was issued which was followed by issuance of show cause notice dated 09.09.2021 by the NFAC, Delhi. Finally, the assessment was framed vide order dated 22.09.2021, passed u/s 147 read with section 144B of the Act. We have perused the provisions of section 151A of the Act dealing with faceless assessment of income escaping income which was brought on statute book by the taxation and other law (realization and amendment of certain provisions) Act, 2020, with effect from 01.11.2020, and notified on 29.03.2022, vide notification number 18/2022 in F.No. 370142/16/2022-TPI(part). Therefore, the assessment proceedings were taken over by NFAC, Delhi by issuing notice u/s 142(1) of the Act on 25.08.2021 and therefore, assessment was framed accordingly after issuing show cause notice. In our opinion, the assessment framed is without jurisdiction as the provisions of section 151A were not notified by the CBDT on the date of issuance of notice u/s 142(1) of the Act and framing of assessment order. The case of the assessee is squarely covered by the decision of the co-ordinate Bench in series of decisions as has been relied on by the assessee. The operative part in the case of MD Mahimud SK Vs. ITO (supra), read as under:-
“010. After hearing the rival contentions and perusing the materials available on record, we find that the notice to the assessee was issued u/s 148 of the Act on 31.03.2021, through e-mail after the case was reopened u/s 147 of the Act. Notice u/s 143(2) read with section 147 of the Act was issued on 29.06.2021 and thereafter , the proceedings would taken over by National Faceless Centre, Delhi and notice u/s 142(1) dated 09.02.2022, was issued and thereafter show cause was issued to assessee by the NFAC on 17.03.2022. Finally, the assessment was framed u/s 147 read with section 144B of the Act vide order dated 23.03.2022.
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 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:-
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. 013. The additional ground raised in A.Y.2017-18 is similar to one as decided by us in A.Y. 2015-16. Therefore, our decision would, mutatis mutandis, apply to this appeal as well. The appeal of the assessee is allowed.” 4.3. Similar issue has been laid down by the co-ordinate Bench in the Milani Swanirbhar Gosthi Vs. ITO (supra) for A.Y. 2018-19, vide order dated 28.08.2025. Since, the facts before us are materially same, we therefore, respectfully following the decision of the co-ordinate bench, quash the assessment framed by the NFAC as without valid jurisdiction. The additional ground raised by the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 02.12.2025.