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Facts
The assessee filed two appeals concerning Assessment Years 2015-16 and 2020-21. The appeals were against orders passed by the National Faceless Appeal Centre (NFAC) and the Commissioner of Income-tax (Appeals). These orders arose from re-assessment orders by the Assessing Officer. A primary issue concerned a discrepancy in the income calculation where the Assessing Officer appeared to have copy-pasted the income processed under Section 143(1) instead of the correct figure after allowing a deduction under Section 80JJAA. Another significant issue was the validity of re-assessment proceedings due to a lack of proper digital signature or manual signature on the approval for initiating re-assessment.
Held
The Tribunal held that the assessing officer committed a typographical error by copy-pasting the income processed under Section 143(1) instead of the correct assessed income after allowing the deduction. The Tribunal directed the assessing officer to correct this error. Furthermore, the Tribunal found that the re-assessment proceedings were initiated without a valid approval under Section 151 of the Act, as the approval lacked a digital or manual signature, rendering it defective. Consequently, the assessment orders were deemed to be without jurisdiction.
Key Issues
1. Whether the Assessing Officer committed a typographical error by copy-pasting the income processed under Section 143(1) instead of the correct figure after allowing deduction under Section 80JJAA. 2. Whether the re-assessment proceedings were validly initiated without a proper digital or manual signature on the approval under Section 151 of the Income Tax Act, 1961.
Sections Cited
Section 250 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 143(3) of the Income Tax Act, 1961, Section 143(1) of the Income Tax Act, 1961, Section 154 of the Income Tax Act, 1961, Section 143(1)(a)(i) to (vi) of the Act, 1st Proviso to Sec. 143(1) of the Act, Section 151 of the Income Tax Act, 1961, Section 148 of the Income Tax Act, 1961, Section 133(6) of the Income Tax Act, 1961, Section 131 of the Income Tax Act, 1961, Section 144B of the Act, Section 80JJAA of the Act, Section 80G of the Act, Section 194A of the Act, Section 68 of the Act, Section 144 of the Income Tax Act, 1961, Section 142(1) of the Income Tax Act, 1961, Section 143(2) of the Act, Section 69A of the Act, Section 115BBE of the Act, Section 271(1)(c) of the Income tax act, 1961, Section 271(1)(b) of the Income Tax Act, 1961, Section 151A of the Act, Section 124(C) of the Act, Section 149(1)(a) of the Act, Section 148A(b) of the Act, Section 148A(d) of the Act
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
ORDER Per, Dr. Arjun Lal Saini, Accountant Member: Captioned two appeals filed by the same assessee, pertaining to assessment years ( A.Ys.) 2015-16 & 2020-21, are directed against the separate orders passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi / Commissioner of Income-tax (Appeals), dated 18.06.2025 & 17.06.2025, which in turn arise out of separate orders passed by the Assessing Officer u/s 147 r.w.s.
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 2 144B of the Act, on 29.03.2022 and u/s. 143(3) r.w.s. 144B of the Act, on 19.09.2022.
(i)On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the total income of Rs.60,75,10,430/-, determined in assessment order u/s 143(3), as per the income processed by Centralised Processing Centre (CPC), on ignoring the fact that the total income determined by the CPC, in order passed u/s.143(1), is of Rs.61,46,09,250/-. (ii).On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the disallowance of deduction u/s.80JJAA of Rs.3,01,93,275/-, since such deduction had subsequently been allowed by the CPC in rectification order passed u/s 154 of the Act. (iii).The Ld. CIT(A) erred in confirming the total income as computed by the CPC, on ignoring the fact though the adjustments made in intimation u/s 143(1) are not permissible u/s. 143(1)(a)(i) to (vi) of the Act. (iv)The Ld. CIT(A) erred in confirming the total income as determined by the CPC, though the intimation of proposed adjustments was not given to the appellant in accordance to 1st Proviso to Sec. 143(1) of the Act. (v)The Ld. CIT(A) ought to have deleted the additions/disallowances made in intimation u/s.143(1) and Rectification order u/s.154, since such adjustments does not comprise of the mistake apparent on record. (vi)The Ld. CIT(A) erred in confirming the total income as processed by the CPC, on ignoring the fact that the notice for enhancing the income has not been served to the appellant u/s 154(3) of the Act.
The facts of the case which can be stated quite shortly are as follows: The assessee e-filed its return of income for assessment year (A.Y.) 2020-21 on 28.01.2021, declaring total income Rs.58,44,15,970/-, which was processed u/s 143(1) of the Income Tax Act, 1961 by the CPC, Bengaluru at total income of Rs.60,75,10,430/-. Further, the assessee`s case was selected for scrutiny through CASS and the assessee`s case was picked up for scrutiny for the following reasons, Viz: (i)Refund Claim (ii).ICDS compliance and adjustment, (iii)
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& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 3 deduction from total income under Chapter VI-A. Accordingly, a notice u/s 143(2) of the Act was issued on 29.06.2021 and was duly served on the assessee. Subsequently, the notices u/s 142(1) of the Income Tax Act, 1961 along with questionnaire was issued and details were called for under e- assessment scheme. The assessee has stated that during the year under consideration, its tax liability for the advance tax purpose based on the average gross margin. The prices of palm oil have showed considerable hike resulted in reduction in our operating margin. The comparative average purchase price chart of the main raw material used by the assessee, was submitted before the assessing officer and also stated that the lockdown imposed in the last week of March, 2020 has also adversely impacted their profit margin and there were in the business of Rs. 5 ready to eat packaged namkeen food operated through dealer's network. Therefore, they could not be change their price and quantity frequently to match with raw materials prices. The advance tax calculated at assumption basis turned worn and refund of substantial amount was claimed. The reply filed by the assessee on this issue is acceptable; hence, no adverse inference is drawn on this issue. The assessee- company also had stated before the assessing officer that there is no mismatch between ICDS adjustments reported in Form 3CD and ITR and also stated that they have reported Rs. 1,87,86,147/-, as the increase in profit in ICDS and in ITR, the assessee has disallowed depreciation of Rs. 21,03,18,355/-, as per companies Act, 2013 and claimed depreciation of Rs. 19,15,32,208/-, as per I.T. Act. Further, the company has increased its profit by Rs. 1,87,86,147/- (Rs. 21,03,18,355/- less Rs. 19,15,32,208/-) in income tax return (ITR). In support of this, the assessee has submitted before the assessing officer the copy of computation of income for assessment year (Α.Υ.) 2020-21. On these facts, no adverse inference was drawn by the assessing officer. The Company has made certain donations, which are deductible u/s 80G, which are claimed as deduction while filing return of income. The Copies of receipt for donations made have been & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 4 submitted by the assessee. The Company has also claimed deductions u/s 80JJAA of Act. The total no. of employees during the previous year was 2531 out of which eligible employees for the purpose of section 80JJAA was 627. The copy of excel sheet file for deductions claimed u/s 80JJAA of the Act and Form 10DA has been submitted by the assessee. Hence, no adverse inference was drawn on this issue, by the assessing officer. The reply and details uploaded by the assessee were carefully examined by the assessing officer. On the basis of maternal available on record, the explanation of the assessee on the issue(s) is accepted. Accordingly, the assessment is being completed u/s 143(3) of the Income Tax Act, 1961 by accepting the income processed by the CPC u/s 143(1) of the I.T. Act. Considering the above remarks, the total income of the assessee is assessed as under.
Income Processed u/s 143(1) by CPC : Rs. 60,75,10,430/-. Total Assessed Income: Rs. 60,75,10,430/- 4.Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed, the action of the assessing officer, observing as follows:
“6.1 I have gone through the facts of the entire case. In brief it can be stated that the return of income filed by the appellant was processed u/s 143(1) after making some adjustment to the returned income. Subsequently, the case was selected for scrutiny and the Assessment was completed vide order dated 19.09.2022, without making any addition. The assessed income was determined at Rs. 60,75,10,430/-, the income as per processing. The appellant is in appeal against this assessment order u/s 143(3) dated 19.09.2022, in which no addition or any other adverse action has been taken against the appellant. The grounds of appeal are directed against the processing. The only aspect related to this assessment is the claim that the A.O is not justified in adopting the amount of processing. Since no adverse action has been taken against the appellant in the impugned assessment order, there is no ground of appeal. Since the processing order was existing at the time of this assessment, the A.O was fully justified in adopting the amount of income as per that processing. The cause of grievance arises from processing of the return of income at an income higher than the returned income. That grievance cannot be got addressed by filing appeal against different assessment order. Accordingly this appeal and grounds taken are not relevant and allowable and are liable to be dismissed.”
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 5 5.Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before us.
Shri Prakash Jhunjhunwala, Learned Counsel for the assessee, begins by pointing out that assessee- company had claimed the deduction u/s.80JJAA of the Act in the return of income. The CPC (Central Processing Unit) u/s.143(1) of the Act vide order dated 31.03.2021), has disallowed the deduction u/s 80JJAA of the Act, to the tune of Rs.3,01,93,275/-. However, later on, the assessee`s case, was selected for scrutiny under section 143 (3) of the Act and the said deduction u/s.80JJAA of the Act, was allowed by the assessing officer, vide order dated 19.09.2022, passed by the assessing officer under section 143(3) r.w.s.144B of the Act. In the said scrutiny assessment, under section 143 (3) of the Act, the assessing officer, by mistake, copy paste the income processed under section 143(1) by CPC(Central Processing Unit) u/s.143(1) of the Act vide order dated 31.03.2021), hence, it is a mistake apparent from record, which needs correction. Therefore, Ld. Counsel for the assessee submitted that the order passed by the CPC u/s.143(1) of the Act, dated 31.03.2021 has merged with the order passed by the assessing officer under section 143(3) of the Act dated 19.09.2022 and in the said scrutiny assessment proceedings, the assessing officer has allowed the deduction claimed by the assessee, under section 80JJAA of the Act to the tune of Rs.3,01,93,275/-, therefore, while making the order under section 143(3) of the Act dated 19.09.2022, assessing officer ought to have taken the correct assessed income of the assessee to the tune of Rs. 58,44,15,970/-, instead of wrong figure of Rs.60,75,10,430/-.
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 6 7. The Ld. Counsel for the assessee, further submitted that now the assessee is in appeal before this Tribunal, against the order passed by the assessing officer, in scrutiny assessment u/s 143(3) of the Act dated 19.09.2022, wherein the assessing officer has allowed the deduction u/s.80JJAA of the Act to the tune of Rs.3,01,93,275/-. However, the main grievance of the assessee is that while passing the assessment order u/s.143(3) r.w.s. 144B of the Act dated 19.09.2022, the assessing officer simply copy paste the income processed u/s.143(1) of the Act by the CPC to the tune of Rs.60,75,10,430/-. However, the assessing officer ought to have taken the correct figure of Rs.58,44,15,970/-. Therefore, this is the typographical error committed by the assessing officer while passing the assessment order u/s.143(3) of the Act and such typographical mistake may be corrected by this Tribunal. Since, later on, the order passed by the CPC under section 143(1) of the Act, has merged with scrutiny assessment order passed by the assessing officer under section 143(3) of the Act, dated 19.09.2022, therefore, Ld. Counsel for the assessee submitted that the correct figure which ought to be taken by the assessing officer while passing the assessment order u/s.143(3) of the Act is to the tune of Rs.58,44,15,970/-. Therefore, direction may be given to the assessing officer to correct the typographical error committed by the assessing officer while passing the order u/s.143(3) of the Act.
On the other hand, Ld. CIT-DR for the Revenue fairly agreed that there is no doubt that the order passed by the CPC u/s 143(1) of the Act dated 31.03.2021 has merged with the assessment order dated 19.09.2022 passed under section 143(3) of the Act. The assessee is in appeal before this Tribunal against the order passed by the assessing officer u/s.143(3) of the Act. Therefore, the Tribunal may direct the assessing officer to correct the error committed by the assessing officer while passing the order u/s.143(3) of the Act.
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 7 9. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We find merit in the submissions of learned Counsel for the assessee to the effect that assessee- company had claimed the deduction u/s.80JJAA of the Act in the return of income. The CPC (Central Processing Unit) u/s.143(1) of the Act vide order dated 31.03.2021), has disallowed the deduction u/s 80JJAA of the Act, to the tune of Rs.3,01,93,275/-. However, later on, the assessee`s case, was selected for scrutiny under section 143 (3) of the Act and the said deduction u/s.80JJAA of the Act, was allowed by the assessing officer, vide order dated 19.09.2022, passed by the assessing officer under section 143(3) r.w.s.144B of the Act. therefore, we find that earlier order passed by the CPC under section 143(1) of the Act dated 31.03.2021 got merged with order passed by the assessing officer under section 143(3) r.w.s.144B of the Act, dated 19.09.2022. Hence, the figure mentioned by the CPC, as a total income, under section 143(1) of the Act dated 31.03.2021, is not relevant, and the figure assessed by the assessing officer, for total income, under section 143(3) r.w.s.144B of the Act, dated 19.09.2022 should be considered, which would be different, as the assessing officer allowed the deduction under section 80JJAA of the Act. However, in the said scrutiny assessment, under section 143 (3) of the Act, the assessing officer, by mistake, copy paste the income processed under section 143(1) by CPC(Central Processing Unit) u/s.143(1) of the Act vide order dated 31.03.2021), hence, it is a mistake apparent from record, which needs correction, as order u/s.143(1) of the Act merged with order under section 143 (3) of the Act.
As we have noted above that later on, the assessee’s case was selected for scrutiny and notice u/s.143(2) of the Act and the assessment order was framed & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 8 by the assessing officer u/s.143(3) r.w.s. 144B of the Act, wherein the assessing officer has allowed the deduction u/s.80JJAA of the Act to the tune of Rs.3,01,93,275/-. Therefore, the order passed by the CPC u/s.143(1) of the Act dated 31.03.2021 has merged with the order passed by the assessing officer u/s.143(3) of the Act dated 19.09.2022 and in the scrutiny assessment proceedings, and the assessing officer has allowed the deduction claimed by the assessee u/s.80JJAA of the Act to the tune of Rs.3,01,93,275/-. Now, the assessee is in appeal before this Tribunal against the order passed by the assessing officer in scrutiny assessment u/s.143(3) of the Act dated 19.09.2022, wherein the assessing officer has allowed the deduction u/s.80JJAA of the Act to the tune of Rs.93,01,93,275/-. However, while passing the assessment order u/s.143(3) r.w.s. 144B of the Act dated 19.09.2022, the assessing officer simply copy paste the income processed u/s.143(1) of the Act by the CPC to the tune of Rs.60,75,10,430/-, which is wrong. The assessing officer ought to have taken the correct figure of Rs.58,44,15,970/-. Therefore, this error committed by the assessing officer while passing the assessment order u/s.143(3) of the Act should be corrected. The main grievance of the assessee is that the correct figure which ought to be taken by the assessing officer while passing the assessment order u/s.143(3) of the Act is to the tune of Rs.58,44,15,970/-. We have examined the order passed by the CPC under section 143(1) of the Act, and order passed by the assessing officer in scrutiny assessment u/s.143(3) of the Act, and noted that correct figure of total income of the assessee, under consideration, is to the tune of Rs.58,44,15,970/-.
11.Therefore, the said error needs to be corrected as per the records provided by the assessee and we find that the income chargeable to tax at normal rate comes to Rs.58,44,15,970/-, therefore, the same should substituted against the figure wrongly copy pasted by the assessing officer at Rs.60,75,10,430/-, while & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 9 framing the assessment order u/s.143(3) r.w.s. 144B of the Act vide order dated 19.09.2022. Therefore, this correction is to be done by the assessing officer and for that we rely on the order passed by the Co-ordinate Bench of ITAT, Mumbai in the case of DCIT vs. Aditya Birla Housing Finance Limited in & Ors., order dated 03.03.2025, wherein it was held as follows:
“15. On perusal of above it can be seen that the returned income of INR.218,41,70,860/- filed by the Assessee has been accepted as assessed income. At the same time the Assessing Officer has, while concluding, has stated that the assessment of income is done as per computation sheet. A perusal of the Computation Sheet shows that the adjustment made while processing return of income under Section 143(1) of the Act have been incorporated. Therefore, in the facts of the present case, it cannot be said that the grievance raised by the Assessee in appeal before the CIT(A) does not rise from the Assessment Order, dated 25/10/2022, passed under Section 143(3) read with Section 144B of the Act. Accordingly, we accept the contention of the Assessee that in the facts and circumstances of the present case the doctrine of merger would apply. Therefore, we reject the contention of the Revenue that the CIT(A) erred in entertaining and adjudicating the grounds raised by the Assessee in appeal before the CIT(A) challenging the adjustments made while issuing intimation under Section 143(1) of the Act. Accordingly, Ground No. 1 raised by the Revenue is dismissed.”
12. Therefore, we direct the assessing officer to consider the total income chargeable to tax to the tune of Rs.58,44,15,970/-. Hence, this appeal filed by the assessee is allowed for statistical purposes.
Now, we shall take assessee`s appeal in for assessment year 2015-16. The grounds of appeal
raised by the assessee in are as follows: (i)On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the validity of notice u/s.148 issued in mechanical manner, in absence of fresh tangible material and on the basis of borrowed satisfaction and without having reason to believe of escapement of income; & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT
10. (ii)On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition u/s.68 of Rs.85,00,000/- of unsecured loans received from M/s. Mansarovar Financial Services Ltd and M/s. Suramya Tradelinks Pvt Ltd; (iii)The Ld. CIT(A), before sustaining the addition u/s 68 of unsecured loans received of Rs.85,00,000/-, ought to have considered the understated vital facts, being; a) The exhaustive documentary evidences, being Ledger, Confirmation, PAN, Own bank statement, I.T return, bank statement and balance sheet of lenders and TDS certificate for interest payment to prove the identity, genuineness and credit-worthiness of the lenders has not been disproved by the Ld. assessing officer; b) The entire loans had been received through banking channel by A/c payee cheques/RTGS and repaid in subsequent years; c) The appellant had made the payment of interest after deducting the TDS u/s 194A of the Act; d) The Ld. assessing officer did not conduct any sort of enquiry/investigation and had not issued any notices u/s.133(6)/131 to the lenders and their bankers to verify the transactions; e) The Ld. assessing officer had not provided the copies of contrary material/evidence and statements of 3rd parties for rebuttal and also did not allow an opportunity of cross examination.”
15.Additional Ground involving legal issue raised for by the assessee first time, is as follows: 1On facts and circumstances of the case and in law, the re-assessment order passed u/s 147 dated 29/03/2022 by the National Faceless Assessment Centre (NFAC) is grossly bad in law, since the jurisdiction of the NFAC prescribed u/s.151A had been notified w.e.f. 29/03/2022 and accordingly, the assumption of jurisdiction made by NFAC since 21/12/2021 is invalid.
Learned Counsel for the assessee submitted that the assessee can raise the legal ground at any stage, therefore, the above legal ground raised by the assessee first time may be admitted by the Tribunal for the interest of justice.
On the other hand, Ld. DR for the Revenue did not raise objection, if the above legal ground is admitted.
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 11 18. We have heard both the parties. We note that it is purely a legal issue raised by the assessee, first time and all facts are already on record which goes to the root of the matter and no further inquiry is required for deciding the same as all facts are already on record. Therefore, in the light of ratio laid down by the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd., vs. CIT (1998) 229 ITR 382 (SC), we admit the additional ground raised by the assessee and we proceed to adjudicate first, as follows.
Learned Counsel for the assessee argued on the legal issue raised by the assessee, first time stating that the re-assessment order passed u/s 147 dated 29/03/2022 by the National Faceless Assessment Centre (NFAC) is grossly bad in law, since the jurisdiction of the NFAC prescribed u/s.151A had been notified with effect from (w.e.f.) 29/03/2022 and accordingly, the assumption of jurisdiction made by NFAC since 21/12/2021 is invalid, and therefore order passed by the assessing officer under section 147 of the Act, dated 29/03/2022, should be quashed, on this score only.
On the other hand, Ld. DR for the Revenue argued that once the assessing officer has assumed jurisdiction u/s.124(C) of the Act, then he may frame the assessment order in accordance with law. The Ld. DR for the Revenue submitted that the assessee has not submitted the copy of the notification downloaded from the Government website. Therefore, assessee should be directed to furnish the copy of the notification dated 29.03.2022.
In rejoinder, Ld. Counsel for the assessee submitted that the notification dated 29.03.2022 vide Notification No.18/2002 dated 29.03.2022 has been downloaded from the site of the department of Ministry of Finance which can be verified by the Bench on the online portal. In Rejoinder, Ld. Counsel also submitted that the Notification No.18/2022, dated 29th March 2022 has been & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 12 available to everybody, which is already available in the decision/precedent cited before the Bench, and it is available on the government website, which is reproduced below:
MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 29th March, 2022 5.O. 1466(1). In exercise of the powers conferred by sub-sections (1) and (2) of section 151A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely 1. Short title and commencement (1) This Scheme may be called the e-Assessment of Income Escaping Assessment Scheme, 2022. (2) It shall come into force with effect from the date of its publication in the Official Gazette.
2. Definitions (1) In this Scheme, unless the context otherwise requires, (a) "Act" means the Income-tax Act, 1961 (43 of 1961), (b) "automated allocation" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources. (2) Words and expressions used herein and not defined, but defined in the Act, shall have the meaning respectively assigned to them in the Act.
3. Scope of the Scheme. For the purpose of this Scheme,- (a) assessment, reassessment or recomputation under section 147 of the Act, (b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee. [Notification No. 18/2022/F. No. 370142/16/2022-TPL(Part1] SHEFALI SINGH, Under Secy.
We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. Learned Counsel for the assessee argued on the additional legal ground stating that re-assessment proceedings initiated by the assessing officer is grossly bad in law, since the jurisdiction of the NFAC prescribed it u/s.151A of the Act & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 13 notified the date from 29.03.2022 and accordingly assumption of jurisdiction made by the NFAC since 21st December, 2021 is invalid, therefore order passed by the assessing officer on this legal ground should be quashed, for that, we rely on the judgment of the Co-ordinate Bench of ITAT, Kolkata in the case of Nabiul Industrial Metal Pvt. Ltd. vs. ITO in order dated 15.10.2024, wherein it was held as follows:
“1.2. The ld. Counsel for the assessee challenges the impugned order by taking several grounds but he, in course of hearing, took an additional ground being the legal ground and he pressed only legal ground which are as follows: "That the National Faceless Assessment Centre erred in having assumed jurisdiction u/s 151A r.w.s 144B of the Act from 29.11.2021 when they were not empowered under any notification about the applicability of the faceless scheme for making assessment in faceless manner 'prior to 29.03.2022. 1.3. Ld. Counsel for the assessee submitted that the provisions of Section 151A of the Act came in the statute on 01.11.2021 but it was notified with effect from 29.03.2022. But in the present case, assessment proceedings to the NFAC started on 29.11.2021 which is evident from the notice u/s 142(1) of the Act. Ld. Counsel for the assessee further submits that the show cause notice has also been issued and the date has been mentioned as 28.03.2022 that is prior to 29.03.2022. Ld. Counsel for the assessee further submits that the assumption of jurisdiction by the NFAC was without jurisdiction. Consequently, the whole assessment is without jurisdiction and unsustainable in law. Ld. Counsel for the assessee further drew the attention of this Bench on the issuance of show cause notice and submitted that it was served on 29.03.2022 and asked the assessee to furnish explanation on or before 29.03.2022, it means without giving the assessee any opportunity before framing of the assessment order. Ld. Counsel for the assessee has filed the following papers: a) Notification of Ministry of Finance dated 29.03.2022. b) Notice issued u/s 142(1) of the Act. c) Show cause notice dated 28.03.2022. 1.4. Ld. D/R though supports the impugned order but did not raise any objection on the legal ground.
We have perused the records and the papers filed by the assessee. It appears that Notification with respect to Section 151A of the Act has been made with effect from 29.03.2022 which is as under: "S.O. 1466(E). In exercise of the powers conferred by sub-sections (1) and (2) of section 151A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:-
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 14 1. Short title and commencement-(1) This Scheme may be called the e- Assessment of Income Escaping Assessment Scheme, 2022. (2) It shall come into force with effect from the date of its publication in the Official Gazette.
2. Definitions (1) In this Scheme, unless the context otherwise requires, (a) "Act" means the Income-tax Act, 1961 (43 of 1961); (b) "automated allocation" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources. (2) Words and expressions used herein and not defined, but defined in the Act, shall have the meaning respectively assigned to them in the Act.
3. Scope of the Scheme. For the purpose of this Scheme,- (a) assessment, reassessment or re-computation under section 147 of the Act, (b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee." 2.1. We have also gone through the notice u/s 142(1) of the Act dated 29.11.2021 which is as follows:
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 15 2.2. We further find the show cause notice issued that also reflects the date 28.03.2022 which is as follows:
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 16 2.3. It appears from the show cause notice issued on 28.03.2022 that at the bottom of the page it was digitally signed thereby giving date 29.03.2022 at 00:20:37 IST 2.4. We further find that in the show cause notice the assessee has been directed to furnish explanation on or before 29.03.2022. It is surprising that when it was issued on 29.03.2022 at 00:20:37 IST and directed the assessee to explain the explanation before 29.03.2022.
3. Keeping in view the entire facts and discussions made above, we find substance in the argument of the ld. CIT(A) that assumption of jurisdiction prior to 29.03.2022 by the Id. assessing officer is to be held to be without jurisdiction. Accordingly, the assessment order, passed, is to be deemed without jurisdiction. Subsequently, all the orders passed are hereby held to be without jurisdiction.
In the result, the appeal filed by the assessee is allowed.”
We also note that the issue under consideration is also covered in favour of assessee by the judgment of the Co-ordinate Bench of ITAT, Kolkata in the case of Md. Mahimud SK vs. ITO in & 2229/Kol/2024, order dated 04.03.2025, wherein it was held as follows:
“011. 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 provision 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. 1.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:-
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 17 & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 18 & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 19 & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 20
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.”
Therefore, respectfully following the binding judgments of the Co-ordinate Bench (supra) on identical and similar issue, we allow the appeal of the assessee.
Now, we shall adjudicate the second issue on technical ground raised by the assessee u/s.148/147 of the Act, wherein the assessee has challenged that the approval u/s.151 of the Act has not been signed digitally by the appropriate authority. Therefore, the order passed by the assessing officer may be quashed.
On the other hand, learned DR for the Revenue fairly agreed that approval u/s.151 of the Act has not been signed digitally by the appropriate authority.
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 21 27. We have heard the rival parties and have gone through the material placed on record. For the sake of clarity and also being pertinent, we reproduce the approval, under section 151 of the Act, as follows:
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 22 & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 23 & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 24 28. We have gone through the above approval under section 151 of the Act and noticed that it is neither digitally signed nor manually signed, hence the approval given by the Income Tax Authority is defective and consequently, the reassessment order passed by the assessing officer is bad in law and should be quashed. However, Ld. DR for the Revenue again submitted that in order to verify whether, on approval u/s.151 of the Act, there is digital signature or not, the Bench may inspect the assessment records. The Ld. DR also submitted alternatively the assessee may be asked to file the affidavit stating that the documents relating to approval /s.151 of the Act, has been correctly filed in the paper book. Accordingly, the assessee filed the copy of the approval under section 151 of the Act along with affidavit.
29. We have examined the above approval u/s.151 of the Act and noted that it is not digitally signed. Therefore, we find that this second legal issue has also been covered in favour of the assessee, by the order of the Co-ordinate Bench of ITAT, Rajkot in order dated 5th August, 2025, wherein Tribunal held as follows:
“8. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld DRP and other materials brought on record. First, technical and legal issue raised by the assessee is that approval given by the higher authorities u/s 151 of the Act, is not signed by the concerned higher authority, and such approval was given without application of mind in a mechanical way, therefore, assessment order framed by the assessing officer, should be treated invalid in the eye of law. In order to adjudicate this technical issue, let us, first examine the document of the revenue authorities (Income Tax Department) for approval under section 151 of the Income Tax Act 1961, which is placed in Paper Book at Page No. 57 of the assessee`s paper book. The said approval given by the higher authorities u/s. 151 of the Income Tax Act, 1961, is reproduced below, for our analysis:
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 25
From the above approval document, under section 151 of the Income Tax Act 1961, it is vivid that there is no signature of the concerned authority, therefore, in the absence of signature by the concerned Authority, the above approval document, cannot be enforced in the eye of law. In order to create a legal document, the first and primary condition is that it should be signed by the concerned authority. We note that section 151 of the Act, mandates prior approval of the “specified authority” before issuing a notice under Section 148 for income escaping assessment. If the document granting approval lacks a manual or digital signature, it calls into question the authority's satisfaction. Physical signature is the traditional evidence of approval. In ITBA (Income Tax Business Application), digital approvals (like authenticated login-based approvals) may suffice legally if appropriately recorded. In the above approval note we find that there is neither physical signature nor digital signature of any Income tax authority. However, where no authentication or evidence of the approving authority's satisfaction is found (either digitally or physically), the approval may be deemed invalid. Absence of evidence showing application of mind or digital signature led to reassessment quashing, and consequently, the reassessment order framed by the assessing officer, based on the above approval should be quashed. 30. The above technical issue has also covered by another judgment of the Co-ordinate Bench of Rajkot in & 186/Rjt/2024, dated 3rd September, 2025, wherein it was held as follows:
& 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 26
“8. We have heard both the parties, perused the material available on record. We note that the approval of the PCIT is without any signature of the Ld.PCIT and without generating any DIN number which is reproduced below:
8.1. Therefore, the Ld. Counsel for the assessee has stated that the approval u/s.151 of the Act dated 30/03/2020 is not signed by the Ld. PCIT and, hence, it is not considered as a valid approval/satisfaction and, thus, the notice u/s.148 of the Act issued on the basis of said approval is bad in law and without jurisdiction. For that, reliance is placed on the judgement of Hon’ble High Court of Allahabad in the case of Vikas Gupta reported at (2022) 142 taxmann.com 253 (Allahabad HC). The relevant part of judgement is reproduced: 13. Thus, as per provision of section 151 of the Income-tax Act, 1961, an assessing officer gets jurisdiction to issue notice to an assessee under section 148 of the Act, 1961 after Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income-tax is satisfied on the reason recorded by the assessing officer that it is a fit case for issuing such notice. The date and time of the approval granted digitally under section 151 of the Act and the date and time of the notice under section 148 of the Act, shows that the satisfaction was recorded by the PCTT digitally after the notice under section 148 was digitally signed.
In the present set of facts there was no valid satisfaction recorded by the by the Prescribed Authority under section 151 of the Act, 1961 when the Assessing Officer issued notice to the assessees under section 148 of the Act, 1961. At the time when the notice under section 148 of the Act, 1961 was issued by the Assessing Officer to the petitioner there was no valid satisfaction recorded by the Prescribed Authority ie. the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Subsequent to issuance of the notice under section 148 of the Act, 1961 by the & 499/Rjt/2025 Gopal Snacks Pvt. Ltd. vs. ACIT 27 Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority. Therefore, the point of time when the Assessing Officer issued notices under section 148, he was having no jurisdiction to issue the impugned notices under section 148 of the Act, 1961. Consequently the impugned notices issued by the Assessing Officer under section 148 of the Act, 1961 were without jurisdiction. The questions no. (a) and (b) are answered accordingly. 8.2. Therefore, based on these facts and circumstances of the case, the assessment order framed by the assessing officer needs to be quashed as there was no approval u/s.151 of the Act for initiating the re-assessment proceedings by the Ld. PCIT, therefore, on this count the assessment order framed by the assessing officer should be quashed.
31.Therefore, respectfully following the above binding judgments of the Co- ordinate Bench of ITAT (supra), we allow second legal ground of the assessee.
Since, we have adjudicated the issue by taking base of two legal issues (supra), therefore, grounds raised by the assessee, on merit, becomes academic and infructuous.