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Facts
The assessee filed appeals challenging the orders passed by the National Faceless Appeal Centre (NFAC)/CIT(A). The assessee had moved an application for leading additional grounds, which were purely legal and did not require fresh investigation of facts. These additional grounds related to the jurisdiction of NFAC to frame assessments and issue notices prior to specific dates.
Held
The Tribunal, following Supreme Court judgments, allowed the application for additional grounds as they were legal in nature and went to the root of the case. Since the assessee was ex-parte before the CIT(A), for the interest of justice, the appeals were restored to the file of CIT(A) for fresh adjudication on merits, including the additional grounds, after providing an opportunity of hearing.
Key Issues
Whether the assessment proceedings and notices issued by the NFAC were without jurisdiction due to their issuance prior to the operational dates of the relevant schemes and notifications, and whether the notice u/s 148 was validly served on the assessee.
Sections Cited
250, 147, 144, 144B, 151A, 142B, 142(1), 282, 148, 292B
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Income Tax Appellate Tribunal, “DB” BENCH, SURAT
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
Date of Hearing 09.10.2025 Date of Pronouncement 26.11.2025 ORDER Per: SHRI. SANDEEP GOSAIN, J.M.:
The present appeals have been filed by the assessee challenging the different impugned orders dt. 20.02.2025, passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2014-15.
Since all the issues involved in these three appeals 2. are common and identical, therefore, they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity. we shall
2. At the very outset, we noticed that assessee was ex- parte before Ld. CIT(A). However assessee has now moved an application for leading additional grounds before us and the contents of the same is reproduced herein below:
ADDITIONAL GROUNDS The appellant seeks leave to take additional ground which is purely a legal issue and does not require fresh investigation of facts. Hence, the following additional grounds may kindly be admitted for adjudication in view of the judgment of the Hon'ble Supreme Court in the case of Jute Corporation of India reported in 187 ITR page 688 and National Thermal Power Corporation reported in 229 ITR 383.
Additional Ground No. 1 That, on the facts and in the circumstances of the case and in law, the assessment framed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act by the National Faceless Assessment Centre (NFAC) is bad-in-law and without jurisdiction as NFAC was not empowered under any valid Notification to frame assessments under the faceless scheme prior to 29-03-2022.
1. In respect of this additional ground, the appellant respectfully submits that the re-assessment order framed u/s 147 r.w.s. 144 r.w.s. 144B by the National Faceless Assessment Centre (NFAC) is without jurisdiction and bad in law, as the NFAC had no statutory authority to frame assessments in faceless mode prior to 29-03-2022.
It is submitted the notice u/s. 142(1) of the Act was issued by National Faceless Assessment Centre, Delhi on 24-03-2021. It may be appreciated that the appellant never received any communication intimating him of the faceless re-assessment proceedings. Thereafter, the appellant was issued a show cause notice on 20-09-2021 which was also issued by NFAC. It is submitted that the assumption of jurisdiction by National Faceless Assessment Centre, Delhi prior to 29-03-2022, is bad-in-law and illegal as the provisions of Section 151A of the Act, providing for the Faceless Assessment of Income Escaping Assessment, which was introduced on 01-11-2020 were made operational only w.e.f. 29-03-2022 vide Notification No. 18/2022/F. No. 370142/16/2022- TPL(Part1) 2022. e- Assessment of Income Escaping Assessment Scheme,
3. In the present case, the impugned assessment order was passed on 23- 09-2021, i.e., prior to the effective date of the Notifications empowering NFAC. The order is thus coram non judice, being passed by an authority lacking jurisdiction. Jurisdiction to frame assessment is not a mere procedural formality but goes to the root of the matter. An order passed without jurisdiction is void ab initio and unenforceable in law. The principle was recognised in ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC), that jurisdictional preconditions must be scrupulously satisfied.
4. Further, it is also submitted that section 142B of the Act was inserted w.e.f. 01-11-2020 for making faceless inquiry or valuation and thus, authorizing issuance of notice under section 142(1) of the Act in a faceless. However, the said scheme "Faceless Inquiry or Valuation Scheme, 2022" was notified on w.e.f. 30-03-2022 vide Notification No. 19/2022/F. No. 370142/15/2022-TPL. Therefore, the power to issue notice under section 142(1) of the Act through the automated allocation became operative only subsequently.
5. Accordingly, NFAC had no jurisdiction, authority or statutory mandate even to issue notice u/s. 142(1) prior to 30- 3-2022, and therefore the entire assessment proceedings initiated by such invalid notices and culminating in the assessment order dated 23-09-2021, are without authority of law, bad-in-law, and liable to be quashed in limine.
In the absence of such notifications during the relevant period, the NFAC could not have lawfully exercised powers of an Assessing Officer. The settled principle of law is that delegated authority must operate strictly within the bounds of its statutory empowerment; any act done in excess of such authority is void. Accordingly, the impugned assessment framed by NFAC prior to 29.03.2022 suffers from a jurisdictional defect and is bad in law.
Reference in this connection is invited to the decisions of the Hon'ble ITAT Kolkata in the case of MD Mahimud SK (ITA Nos. 2230 & 2229/KOL/2024) dated 04-03-2025 and Milani Swanirbhar Gosthi (ITA No.397/KOL/2025) dated 30-07-2025 wherein the Hon'ble ITAT allowed the appeal of the assessee and held that the order passed by the NFAC in faceless manner prior to the notifying of the faceless scheme u/s. 151A as well as u/s. 142B is without jurisdiction
8. It is therefore prayed that the Hon'ble Tribunal may be pleased to admit this additional ground and hold the entire proceedings carried out in faceless manner as without jurisdiction and void ab initio.
Additional Ground No. 2 That, on the facts and in the circumstances of the case and in law, the reassessment proceedings initiated u/s. 147 of the Act are bad in law and void ab initio, as the impugned notice u/s. 148 dated 03-03-2020 was neither uploaded on the e- filing portal of the Income Tax Department nor received on the registered email address of the Appellant and consequently there was no valid service of notice in terms of section 282 of the Act. The absence of valid service vitiates the entire reassessment proceedings.
The Appellant respectfully submits that the reassessment proceedings for AY 2014-15 are void ab initio, as the impugned notice u/s 148 dated 03-03-2020 was never validly served. The notice was neither uploaded on the Appellant's e- filing portal account nor delivered to the registered email address furnished at the time of filing the return of income. It is relevant to note that the email address recorded in the e- filing portal pertained to the Appellant's tax consultant, who regularly handled the Appellant's compliance matters.
2. Further, the factual position that the notice was never uploaded is corroborated by the screenshot of the Appellant's e-filing portal for the relevant period, which clearly shows absence of any such notice.
3. Under section 282 of the Act, service of notice is a jurisdictional requirement and must be effected in the prescribed manner, either electronically through the registered account or email or by other recognised modes such as post. In the present case, the notice was not served in accordance with these mandatory provisions and the absence of proper service vitiates the very assumption of jurisdiction under section 147.
The Hon'ble Supreme Court in CIT v. Laxman Das Khandelwal (2019) 417 ITR 325 (SC) has categorically held that valid service of notice u/s 148 is a sine qua non for reassessment; absence thereof goes to the root of jurisdiction and renders the reassessment proceedings void. This principle has been reiterated in CIT v. Chetan Gupta (2015) 382 ITR 613 (Del) and Kanubhai M. Patel (HUF) v. Hiren Bhatt (2011) 334 ITR 25 (Guj), where it was held that when the notice is not served in accordance with law, the reassessment fails.
In the present case, the non-receipt of the notice on email, together with the screenshot of the e-filing portal, conclusively demonstrates that no valid service of notice ever took place. This defect is not a mere procedural irregularity but a jurisdictional infirmity which cannot be cured u/s 292B. Consequently, the assessment framed u/s 147 r.w.s. 144 is illegal and liable to be quashed.
6. It is therefore prayed that this Hon'ble Tribunal may be pleased to allow this additional ground and hold that, in the absence of valid service of notice u/s 148, the reassessment proceedings are void ab initio and without authority of law.
Further, it is most humbly prayed that the legal issue raised in the above additional grounds may be adjudicated by the Hon'ble bench in view of the decision of the Hon'ble Bombay High Court in the case of Kansai Nerolac Paints Ltd. v. Dy. CIT (2014) 364 ITR 0632.
After hearing heard counsels for both the parties, we noticed that the additional grounds are legal in nature and goes to the roots of the case, therefore while following the principles laid down in the decision of Hon’ble Supreme Court in the case of The Jute Corporation India Ltd., Vs. CIT, 187 ITR 688 and The NTPC Vs. CIT, 229 ITR 383 and also considering the facts of the present case, we allow the application for raising the additional ground and consequently the said grounds are admitted to be heard on merits.
4. Since as per records, the assessee was ex-parte before Ld. CIT(A), therefore, in our view, the interest of justice would be met only if the matter is the restored back to the file of Ld. CIT(A) for deciding the matter afresh including the additional grounds on merits after consulting and verifying the assessment records, needless to mention after providing opportunity of hearing to the assessee. Thus, keeping in view the above factual position, the present appeals of the assessee are restored to the file of Ld. CIT(A) for adjudicating the matter afresh including the additional grounds on merits by providing opportunity of hearing to the parties. The Ld. CIT(A) shall be at liberty to call for any other document from the parties or to call for remand report.
6. Before parting, we make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed, as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.
& 505/SUR/2025, A.Y: 2014-15 As the facts and circumstances in these appeals are 7. identical to for the A.Y 2014-15 (except variance in figures) and the decision rendered in above paragraph would apply mutatis mutandis for these appeals also. Accordingly, the grounds of appeal of the present appeals also stands allowed for statistical purposes.
In the result, all the three appeals filed by the assessee are stands allowed for statistical purposes.