Order passed by NFAC quashed as section 151A of e-assessment of income escaping assessment scheme 2022 had not commenced at the time of issuance of notice
In A recent judgment, ITAT Guwahati quashed order passed by NFAC as the provisions of Section 151A had not come into operation on that date of issuance of notice by NFAC and therefore, the assessment was without jurisdiction.
ABCAUS Case Law Citation:
4735 (2025) (09) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) /NFAC for the A.Y. 2017-18 confirming the order passed u/s 147 read with section 144 / 144B of the Income Tax Act, 1961 (the Act).
A notice u/s 148 of the Income Tax Act, 1961 (the Act) was issued on 24.03.2021 to the assessee by jurisdictional Assessing Officer (AO). The assessee complied with the said notice by filing the return of income.
Thereafter, notice u/s 142(1) of the Act along with questionnaire was issued to the assessee by the AO. After that notice u/s 143(2) dated 02.11.2021 read with section 147 of the Act was also issued by the AO, National faceless assessment Center (Delhi), on 21.02.2022. Thereafter, the show cause notice was issued on 18.03.2022 by NFAC calling for various details and information from the assessee.
Finally, the assessment was framed by the AO NFAC vide the impugned order passed u/s 147 read with section 144 / 144B of the Act.
At the time of hearing before the Tribunal, the assessee raised an additional ground challenging the validity of assessment framed u/s 147 read with section 144 of the Act.
The assessee submitted that the order passed by the NFAC was 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, though the provisions of Section 151A of the Act came on the statute book on 01.11.2020 but the same were notified by CBDT on 29.03.2022 vide Notification No. 18/2022 on e-assessment of income escaping income of 2022.
Therefore, the assessee submitted that the assumption of jurisdiction by the National faceless assessment center was without valid jurisdiction as the provisions of Section 151A of the Act had not come into operation on that date of issuance of notice by NFAC and therefore, the whole of assessment is without jurisdiction and not sustainable in law.
The Tribunal observed the Section 151A of the Act deals with the faceless assessment or income escaping assessment and was brought on the statue book by TOLA 2020, with effect from 01.11.2020 which was notified on 29.03.2022 vide notification No.18/2022. Therefore, the issuance of notice u/s 143(2) of the Act and show cause notice and thereafter farming of assessment by the NFAC, was without jurisdiction as the Provisions of Section 151A of the Act were with effect from 29.03.2022.
The Tribunal held that the assessment framed was without jurisdiction and cannot be sustained.
The Tribunal further pointed out that the case of the assessee was squarely covered by the decision of the co-ordinate bench where the Co-ordinate Bench held that order passed by the NFAC before the Faceless Assessment regime becoming effective was without jurisdiction and is hereby quashed.
As the result, the appeal of the assessee was allowed.
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