“NFAC”
The decision most relied on for NFAC is Tecumseh Products India (P.) Ltd. v. DCIT (174 Taxmann.com 1203), cited in 43 judgments on BharatTax.
Leading authorities on NFAC
Where the National Faceless Assessment Centre (NFAC) and the Joint Assessing Officer (JAO) have concurrent jurisdiction, a notice issued by the JAO under Section 148 of the Income Tax Act is valid, provided no prejudice is caused to the assessee.
Denying a personal hearing when specifically requested, especially after a search and during a pandemic, violates the principles of natural justice. The assessment and appellate proceedings themselves were conducted during the COVID-19 pandemic.
Failure to grant a personal hearing to an assessee when income is likely to be varied based on submitted evidence violates the principles of natural justice and renders the assessment order invalid.
When initiating penalty proceedings, the Assessing Officer (AO) must specify the limb of the charge, indicating whether the penalty is for concealment of income or furnishing inaccurate particulars. This requirement is essential for valid penalty proceedings.
The ITAT held that failure to file Form 67 by the due date for filing the return of income is not fatal to the claim for foreign tax credit. The appellate authority can condone the delay in filing Form 67.
Penalty under Section 270A for under-reporting or mis-reporting of income cannot be sustained if additions are made under Section 56(2)(x) and the penalty notice fails to specify the limb under which proceedings are initiated.
When the quantum of income is remanded to the Assessing Officer, the issue of penalty for undisclosed income should also be remanded to the Assessing Officer.
A penalty levied for misreporting under section 270A is unsustainable if the Assessing Officer fails to establish how the assessee's case falls within the specific instances of misreporting mentioned in section 270A(9). This requires an application of mind and adherence to the principles of natural justice.
