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Facts
The assessee challenged reassessment proceedings for AY 2015-16, arguing that the notices issued under Sections 148 and 148A of the Income Tax Act were illegal, without jurisdiction, time-barred, and violated the faceless assessment provisions of Section 144B and the e-Assessment Scheme, 2022. The CIT(A) had upheld the assessment, which also included an addition under Section 69A read with 115BBE.
Held
The tribunal, following a Bombay High Court judgment, ruled that the Assessing Officer lacked jurisdiction to issue the Section 148 notice manually, as it ought to have been issued in a faceless manner consistent with Section 144B and the e-Assessment Scheme. Consequently, both the notice and the resulting assessment order were declared invalid.
Key Issues
Whether reassessment notices issued under Sections 148/148A were valid given the mandatory faceless assessment procedure under Section 144B and the e-Assessment Scheme, 2022, and whether the subsequent assessment order was legal.
Sections Cited
Section 148, Section 148A(b), Section 148A(d), Section 147, Section 144B, Section 151A, Section 69A, Section 115BBE, Section 250(6), Section 234A, Section 234B, Section 271(1)(b), Section 271(1)(c), e-Assessment of Income Escaping Assessment Scheme, 2022, CBDT Circular No. 19 of 2019
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Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI
Before: Dr. B. R. R. Kumar, Sh. Sudhir Kumar
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 28.11.2023.
2. Following grounds have been raised by the assessee:
“1. That the notice dated 09.06.2021 and 29.06.2022 issued under Section 148 of the Income Tax Act, 1961 (‘the Act’) for Assessment Year (‘AY’) 2015-16 by the National Faceless Assessment Centre (‘AO’) and the Assessment Order passed thereunder are illegal, bad in law, without jurisdiction, time-barred, and liable to be quashed. The National Faceless Appeal Centre (hereinafter referred to as 'CIT(A)') vide order dated 28.11.2023 has also erred in upholding the said assessment order.
That the initiation of the reassessment proceedings for A.Y. 2015- 16 is illegal, bad in law, without jurisdiction, time-barred, and liable to be quashed.
3. That the assessment order dated 24.04.2023 passed under Section 147 read with Section 144B of the Act and the demand Vikas Sharma raised thereunder are illegal, bad in law, without jurisdiction and void ab initio.
That in view of the facts and circumstances of the case and in law, the notice dated 17.05.2022 issued under Section 148A(b) of the Act by the Jurisdictional Assessing Officer is illegal, bad in law, without jurisdiction, time-barred, and liable to be quashed.
5. That the order dated 29.06.2022 passed under Section 148A(d) of the Act by the Jurisdictional Assessing Officer and the reassessment order dated 24.04.2023 passed under Section 147 read with Section 144B of the Act by the AO and also the addition/disallowance made therein are illegal, bad in law, without jurisdiction, and liable to be quashed.
The order and the notice issued under Section 148A(d) of the Act and the Section 148 of the Act respectively dated 29.06.2022 are illegal and bad in law as the same have not been issued in accordance with the provisions of Section 151A of the Act and as such, the consequential reassessment proceedings are illegal and deserves to be set aside.
7. That in view of the facts and circumstances of the case and in law, the notice dated 29.06.2022 issued under Section 148 of the Act is illegal, bad in law and without jurisdiction as the same has been issued in violation of the Central Board of Direct Taxes’ (CBDT) Circular No. 19 of 2019 dated 14.08.2019.
That in view of the facts and circumstances of the case and in law, the AO has grossly erred in making an addition of Rs. 2,92,05,000/- under Section 69A r.w.s. 115BBE of the Act on account of alleged unexplained money. The addition made is illegal and is liable to be deleted and also Section 115BBE has been illegally and wrongly applied. Further, the CIT(A) has also erred in upholding the same.
That in view of the facts and circumstances of the case and in law, the AO has erred in not providing sufficient and adequate opportunity to the Assessee to represent its case.
That, in view of the facts and circumstances of the case, the order of the CIT(A) dated 28.11.2023 has been passed without giving the Assessee reasonable opportunity to present its case and not providing him with the opportunity of personal hearing and hence, violating principles of Natural Justice and causing grave prejudice to the Assessee.
That, in view of the facts and circumstances of the case, the CIT(A) has erred in not appreciating that the non-appearance is completely unintentional and for bona-fide reasons only.
That, in view of the facts and circumstances of the case, the order of the CIT(A) dated 28.11.2023 is an ex-parte order and in view of Section 250(6), it is incumbent upon the CIT(A) to adjudicate on the merits of the case, which has not been done in the present case.
Vikas Sharma 13. That in the view of facts and circumstances of the case, the various observations made by AO and as upheld by the CIT(A) are incorrect, illegal, and bad in law & based on surmise and conjectures.
That, in view of the facts and circumstances of the case, the Assessee was also prevented by reasonable and sufficient cause for not producing relevant documents/evidence/material and details before the AO and the CIT(A).
That in view of the facts and circumstances of the case and in law, the AO has erred in charging the interest under Section 234A and 234B of the Act. The interest has also been wrongly worked out. The AO has also erred in initiating the penalty proceedings under Section 271(1)(b) and 271(1)(c) of the Act.”
The notice issued u/s 148 of the Income Tax Act, 1961 by the Assessing Officer is as under:
The Hon’ble High Court of Bombay in WP No. 21710 of 2024 dated 22.07.2024 held that the AO has no jurisdiction to issue the notice u/s 148 and it should be issued in faceless manner to the extent provided u/s 144B of the Income Tax Act, 1961.
Vikas Sharma 6. Hence, keeping in view the judgment of Hon’ble High Court and the facts akin to the case before us, we hold that the notice issued is invalid and so as the Assessment Order passed consequently.
In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 28/08/2024.