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Facts
The assessee challenged the validity of an assessment framed u/s 147 read with section 144 of the Income Tax Act for AY 2017-18 by the National Faceless Assessment Centre (NFAC). The assessee contended that NFAC lacked jurisdiction as the provisions of Section 151A for faceless assessment of income escaping assessment, though brought on statute from 01.11.2020, were notified and became effective only on 29.03.2022, which was after the notices were issued and the assessment was framed on 28.03.2022.
Held
The Tribunal admitted the additional ground as a pure legal issue. It held that the assessment framed by the NFAC was without jurisdiction because the provisions of Section 151A became effective only from 29.03.2022, rendering actions taken by NFAC prior to this date invalid. Citing a co-ordinate bench decision, the Tribunal quashed the assessment order.
Key Issues
Whether the assessment framed by the National Faceless Assessment Centre (NFAC) under Section 147 read with Section 144/144B was valid, considering that Section 151A, which governs faceless assessment of income escaping assessment, became effective after the assessment proceedings were initiated and completed.
Sections Cited
147, 144, 151A, 148, 142(1), 143(2), 144B, 69A, 115BBE, 271(1)(c), 271(1)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘DB’ BENCH, GUWAHATI
O R D E R Per Rajesh Kumar, AM:
This appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.03.2025 for the A.Y. 2017-18.
At the time of hearing, the ld. Counsel for the assessee raised an additional ground before us, challenging the validity of assessment framed u/s 147 read with section 144 of the Act dated 28.03.2022.
After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issued raised in the additional ground is a purely a legal issue qua
The facts in brief are that the notice u/s 148 of the Act was issued on 24.03.2021, by ITO Ward-1(2), Guwahati. The assessee complied with the said notice by filing the return of income on 20.12.2021. Thereafter, notice u/s 142(1) of the Act dated 02.11.2021 along with questionnaire was issued to the assessee by ITO Ward 1(2), Guwahati. Notice u/s 143(2) read with section 147 of the Act was issued by the ld. AO, National faceless assessment center (Delhi), on 21.02.2022. Thereafter, the show cause notice was issued on 18.03.2022 by national faceless assessment center calling for various details and information from the assessee. Finally, the assessment was framed by the ld. AO vide order dated 28.03.2022, passed u/s 147 read with section 144 / 144B of the Act.
The ld. AR vehemently submitted before us that the order passed by the NFAC is without jurisdiction as though the provisions dealing with the faceless assessment of income escaping the assessment u/s 151A of the Act was brought on statute book by taxation and other law (relaxation and amendment of certain provisions) Act, 2020, with effect from 01.11.2020, however, the counsel of the assessee vehemently
The ld. DR on the other hand submitted that the assessment have been framed by the NFAC after notice u/s 143(2) of the Act and show cause notice were issued as the Provisions of Section 151A of the Act was brought on the statute book with effect from 1.11.2020. Therefore, the legal issue raised by the assessee may kindly be dismissed.
After hearing the rival contentions and perusing the materials available on record, we find that the Section 151A of the Act deals with the faceless assessment or income escaping assessment and was brought on the statue book by taxation and other law (relaxation 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 issuance of notice u/s 143(2) of the Act and show cause notice and thereafter farming of assessment by the NFAC, in our opinion, is without jurisdiction as the Provisions of Section 151A of the Act were with effect from 29.03.2022. In considered opinion the assessment framed is without jurisdiction and cannot be sustained. The case of the assessee is squarely covered by the decision of the co-ordinate in case of MD Mahimud SK Vs. ITO in & 2229/KOL/2024 vide order dated
“11. 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 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.
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.
14. In the result, the appeal of the assessee is allowed.”
08. In view of the above facts and circumstances, we are inclined to quash the assessment framed by the ld. AO/ NFAC.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 02.09.2025.