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Facts
The assessee challenged the orders of the National Faceless Appeal Centre (NFAC) for Assessment Years 2015-16 and 2017-18. The core issue is whether the NFAC had the jurisdiction to assume jurisdiction and pass assessment orders prior to the notification of Section 151A of the Act on 29.03.2022.
Held
The Tribunal held that the assessment order passed by the NFAC, Delhi was without jurisdiction because it was issued before the effective date of Section 151A of the Act. The assessment was therefore quashed.
Key Issues
The primary issue is whether the National Faceless Assessment Centre (NFAC) had valid jurisdiction to pass assessment orders prior to the notification of Section 151A of the Income Tax Act, 1961.
Sections Cited
Section 151A, Section 144B, Section 147, Section 142(1), Section 143(2), Section 144, Section 69A, Section 115BBE, Section 271(1)(c)
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM & 2229/KOL/2024 (Assessment Years:2015-16 & 2017-18) MD Mahimud SK ITO, Ward 3(1) S/o Abdul Razzak, Income Tax Office, Netaji Village-Kismat narayanpur Market complex, P.O. Sirampur, SD-English Vs. Rathbari, Malda, Bazar, Malda, West Bengal 732101 West Bengal 732216 (Appellant) (Respondent) PAN No. BQYPS8209L Assessee by : Shri S.K. Tulsiyan, AR Revenue by : Shri Prabhakar Prakash Ranjan, DR Date of hearing: 21.01.2025 Date of pronouncement : 04.03.2025 O R D E R Per Rajesh Kumar, AM:
These are the appeals preferred by the assessee against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] even dated 25.09.2024 for the AY 2015-15 and 2017-18 respectively.
The assessee has challenged the appellate order passed by the ld. CIT (A) on various grounds of appeal as mentioned in the memorandum of appeal, besides the assessee has raised additional ground challenging the jurisdiction of national faceless assessment center u/s 151 read with section 144B of the Act when it did not have any power under any notification. First of all we shall adjudicate the additional ground raised in A.Y. 2015-16 which is extracted below:-
“1. That, on the facts and in the circumstances of the case, the National Faceless Assessment Centre (NFAC) erred in having assumed jurisdiction u/s 151A r.w.s. 144B
The ld. DR on the other hand opposed the admission of the additional ground for the reason that it was never raised before the authorities below by the assessee. Therefore, at this stage the assessee should be pre-concluded from raking up this legal issue.
After hearing the rival contentions and perusing the materials available on record, we find that the additional ground raised by the assessee is purely on the legal issue of wrong assumption of jurisdiction by the NFAC u/s 151A read with section 144B of the Act, prior to 27.03.2022. In our opinion, the issue involved does not require any verification from any end whatsoever and all the facts in relation to the assessment proceedings as well as appellate proceedings were in appeal folder. Therefore, by relying on the decision of the Hon'ble Apex Court in the case of CIT Vs. National Thermal Power Co. Ltd. Vs. CIT (Supra), we are inclined to admit the same for adjudication.
The facts in brief are that credible information was received that the assessee had an aggregate credits of ₹ 16.99 lacs and aggregate debits of ₹16.99 lacs during the period commencing from 01.04.2014 to 31.03.2015 in the bank account maintained with the bank of Baroda accountant number 006975. Accordingly, the AO initiated the proceedings u/s 147 of the Act after recording the reasons to belief and after obtaining the prior approval of the PCIT. Notice u/s 148 of the Act was issued on 31.03.2021 and was served through email requiring the assessee to file the return of income within 30 days. In compliance ,the assessee filed the return of income on 28.04.2021,
In the appellate proceedings, the ld. CIT (A) dismissed the appeal in limine by not condoning the delay of 183 days for which the assessee filed the affidavit before us explaining the delay, the reasons for the delay in filing of the appeal.
The ld. Counsel for the assessee vehemently submitted before us that the assessment framed by the ld. AO u/s 147 read with section 144B of the Act dated 23.03.2022, is without jurisdiction and required to be quashed. The ld. AR submitted that the notice u/s 142(1) of the Act dated 09.02.2022, was issued by National faceless assessment centre, Delhi under DIN No. DIN: ITBA/AST/F/142(1)/2021- 22/1039573181(1), meaning thereby that the migration of assessment proceedings for A.Y. 2015-16 was communicated by this notice. Thereafter, the assessee was issued a show cause notice on 17.03.2022 by NFAC with DIN:ITBA/AST/F/147(SCN)2021- 22/1040949460(1). The ld. AR submitted that the assumption of jurisdiction of National faceless assessment centre, Delhi prior to 29.03.2022, was invalid as the provisions of Section 151A of the Act were not operational prior to 29.03.2022. The ld. AR submitted that the provisions of Section 151A of the Act, were brought on the statute book from 01.11.2020 and the same were notified on 29.03.2022 vide notification no. 18/2022 on e-assessment of income escaping income of 2022. The ld. Counsel therefore submitted that the
The ld. DR on the other hand submitted that the proceeding under the NFAC was a continuous proceeding and there was nothing wrong in it and therefore, the legal issue raised before the Bench by the assessee may kindly be dismissed.
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
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.
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.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 04.03.2025.