PCIT has revisionary jurisdiction u/s 263 over the cases irrespective of the fact that the relevant assessment was completed physical mode or faceless mode – ITAT
In a recent judgment, ITAT Delhi has held that the PCIT has revisionary jurisdiction u/s 263 over the cases passed by the NFAC or the JAO irrespective of the fact that the relevant assessment was completed physical mode or faceless mode.
ABCAUS Case Law Citation:
5073 (2026) (03) abcaus.in ITAT
In The instant case, the appellant assessee had challenged the assessment order passed under section u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 (the Act).
One of the challenges raised by the assessee was that the assessment completed by NaFAC cannot be subjected to revisionary proceedings.
Before the Tribunal, it was submitted before us that the assessment order was not passed by JAO but was passed u/s 143(3) r.w.s 144B of the Act. Section 144B is a complete code in itself, it contains robust mechanism for completion of assessment inasmuch as the assessment is subjected to various inbuilt checks and balances to the complete exclusion of the JAO.
It was submitted that Faceless Assessment is under overall superintendence and control of the PCCIT or PDG as specified by the CBDT. Further they are comprised of assessment units (AUs), verification units, technical units and review units, who functions as part of the faceless assessment Center in a seamless manner. Further it was submitted that the comprehensive procedure of assessment, there is hardly any scope left in the assessment order to have been passed in a manner which is prejudicial to the interests of the revenue. Therefore, there is no scope to initiate proceedings u/s 263 of the Act.
The Tribunal observed that as per the provisions of section 144B of the Act, the NFAC is the intermediary between the Assessment Unit and the other service providers to complete the assessment proceedings. The NFAC is being controlled by the PCCIT as an administrator or controller. Their duty is to smooth functioning of the assessment proceedings, and they do not have any control over the assessment proceedings perse individually. It is important and relevant to notice that the AU has absolute control over the assessment, it takes relevant assistance from the NFAC and even after assigning the proposal to the Review Unit (RU), still the AU has absolute control over the assessment, it has got power to accept the suggestions of review unit partially or reject whole suggestions of the RU.
The Tribunal further observed that the AU is the faceless or invisible JAO to complete the assessment of the relevant assessee. Therefore, as per the provisions of section 144B, the assessment is being completed as per the old procedure except the NFAC has equipped AU, is made more robust to assist the AU and the final say is with the AU only. Even though there are several criteria to evaluate the proceedings in fixed time line, still no other authorities are interfering into the assessment proceeding carried on by the AU.
The Tribunal held that in view of the above, the assessment completed by the AU, which is the faceless JAO in the faceless regime, the order passed by the NFAC is always subjected to the revisionary jurisdiction u/s 263 of the Act. Therefore, PCIT has jurisdiction over the cases passed by the NFAC or the JAO irrespective of the fact that the relevant assessment was completed physical mode or faceless mode.
Accordingly, the ground raised by the assessee was rejected.
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