ITAT Quashes Faceless Assessment Proceedings Over Lack of Jurisdiction by NFAC

The Income Tax Appellate Tribunal (ITAT), Kolkata, has quashed an assessment framed by the National Faceless Appeal Centre (NFAC), Delhi, over a lack of jurisdiction at that time.

The case of the assessee, Ranjit Gupta, was reopened based on information that he had made certain cash deposits but had not filed his income tax return. He also failed to properly comply with the notices issued by the AO. As a result, the Assessing Officer added the full amount as unexplained income. This order was passed by the National Faceless Assessment Centre (NFAC) and was upheld by CIT(A).

The assessee challenged the order in the Income Tax Appellate Tribunal (ITAT), where he raised additional legal grounds. He argued that the reassessment order passed under section 147 by the NFAC is without jurisdiction because the notification authorising faceless reassessment proceedings was effective only from 29 March 2022. However, in the case of the assessee, his case was assumed earlier. He also argued that he was given only one day to reply to a notice.

Citing the Supreme Court’s ruling, the tribunal agreed to accept legal grounds that were not raised at an earlier stage.

The Tribunal agreed with the contentions of the assessee, observing that the Provisions of Section 151A, which deal with faceless assessment, were notified from 29.03.2022. Therefore, the ITAT held that the assessment order framed by the NFAC lacked jurisdiction and the same was quashed.