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Facts
The assessee filed an appeal against the order of the Ld.CIT(A), NFAC. The primary contention was that the assessment order was passed by the NFAC on 28.03.2022, while the notification making the NFAC effective was dated 29.03.2022. This made the assessment order procedurally invalid.
Held
The Tribunal held that the assessment order passed by the NFAC on 28.03.2022 was indeed prior to the date of the notification that made the NFAC effective. Therefore, the order was passed without jurisdiction and was liable to be quashed.
Key Issues
Whether the assessment order passed by the NFAC is valid if it was issued prior to the notification making the NFAC effective?
Sections Cited
147, 148, 143(2), 142(1), 144B, 151A, 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
O R D E R Per Bench : This is an appeal filed by the assessee against the Ld.CIT(A), National Faceless Appeal Centre(NFAC), Delhi order dated 06/05/2025 passed in Appeal No. NFAC/2015-16/10166862 for the assessment year 2016-2017.
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 :-
2 010. 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:-
3 4 012. 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.
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.
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.
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.