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Facts
The appeal was filed by the assessee against an order of the Ld.CIT(A) which was passed by the National Faceless Appeal Centre (NFAC). The assessment order was passed on 28.03.2022, while the notification for the NFAC to pass assessment orders came into effect on 29.03.2022. The assessee's AR argued that the assessment order was therefore without jurisdiction.
Held
The Tribunal held that the assessment order passed by the NFAC on 28.03.2022 was prior to the effective date of the notification (29.03.2022) and thus was passed without jurisdiction. The Tribunal followed the decisions of its coordinate benches in similar cases.
Key Issues
Whether the assessment order passed by the NFAC on 28.03.2022 is liable to be quashed as being without jurisdiction, given that the notification for NFAC's assessment powers came into effect on 29.03.2022.
Sections Cited
147, 143(3), 151A, 148, 142(1), 144B, 144, 69A, 115BBE, 271(1)(c), 271(1)(b)
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 11.08.2025 passed for the assessment year 2014-2015. 2. It was submitted by the ld. AR that the assessment in the case of the assessee was completed u/s.147 r.w.s.143(3) of the Act by the AO(NFAC) on 28.03.2022. It was the submission that the notification for which the National Faceless Assessment Centre to pass the assessment order came into effect from 29.03.2022. It was the submission that as the assessment order has been passed before the said notification has been issued, the assessment order is liable to be quashed as being without jurisdiction. Ld. AR also relied on the decision of the ITAT Kolkata Bench of the Tribunal in the case of Md. Mahimud SK passed in order dated 04.03.2025, which has been followed by the Cuttack Bench of the Tribunal in the case of Nand Kumar Choudhury, passed in order dated 22.09.2025, wherein the coordinate bench has held in para 02 to 05 as under :- 2. It was submitted by the ld. AR that the assessment order in the case of assessee has been passed by the NFAC on 28.03.2022. It was the submission that the Notification by which the National Faceless Assessment Centre was made effective is dated 29.03.2022. It was the submission that consequently the assessment order passed on 28.03.2022 is liable to be quashed. Ld. AR placed reliance on the decision of the coordinate bench of the Tribunal in the case of Md. Mahimud SK in pronounced on 04.03.2025, wherein in para 10 to 12, the coordinate bench of the Tribunal has held 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 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. 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. 3. It was the submission that the assessment year in the impugned appeal is liable to be quashed as the assessment order has been passed by the NFAC on 28.03.2022. 4. In reply, ld. Sr. DR vehemently supported the orders of the ld. AO and ld.CIT(A). It was the submission that there are no other decisions on this issue and, therefore, the appeal may be heard on merits.
5. We have considered the rival submissions. Here in the appeal on merits would have no implication, insofar as on the technicality itself the issue has been held against the revenue by the coordinate bench of the Tribunal in the case of Md. Mahimud SK, referred to supra, wherein one of us is a party to the order. This being so, the decision of the coordinate bench of the Tribunal in the case of Md. Mahimud SK, referred to supra, as it is noticed that the assessment order has been passed by the NFAC on 28.03.2022 being prior to the date of notification is bad in law and consequently the same stands quashed.
It was the submission that the assessment order is liable to be quashed.
In reply, ld. Sr. DR submitted that the assessee has cooperated in the assessment proceedings. It was the submission that such arguments had not be placed before the AO in the course of assessment.
We have considered the rival submissions. As it is noticed that the assessment order is dated 28.03.2022 and the notification for NFAC came into effect w.e.f. 29.03.2022, respectfully following the decision of the coordinate bench of the Tribunal in the case of Nand Kumar Choudhury, referred to supra, it is held that the NFAC did not have jurisdiction to pass the assessment order. Consequently, the assessment order passed by the NFAC dated 28.03.2022 in the impugned appeal stands quashed.
In regard to the argument of the ld.Sr. DR in respect of the issue of representation in the course of assessment by the assessee, the same would not protect an order passed without jurisdiction.