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Judgment
This assessee’s appeal for Assessment Year 2014-15 arises against the C IT(A)/NFAC, De lhi’ s DIN & order No. ITBA/NFAC/S/250/2024-25/1068016367(1) dated 27.08.2024, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the p arties at length. Case file perused.
We note at the outset that the assessee has sought to raise the follow ing additional grounds:
“1 . That on facts , and i n the circumsta nces of the case and i n law, the Fa celess Asses sing Officer of Nati onal Facel ess Assessment C entre,Del hi (FAO,NFAC-Del hi) erred i n havi ng assumed j uri sdicti on for concl udi ng the fac e less ass essme nt of i ncome escaping ass es sm ent and pa ssing the assessme nt order u/s.147 r. w.s 144 r.w.s 144B,dat ed 28/03/2022 pri or to notificati on U /S .151A,dated 29/03/2022 for oper ation of faceless i ncome escapi ng ass essment, accordi ngl y the FA O is lack of jurisdic tion for concl udi ng i nc ome escaped assessme nt in a faceless manner, thus the assessee p rays that t he assessment orde r u/s.147 r.w.s 144 r.w.s 144B,dat ed 28/03/2022 may be held as null & void and to be quashed.
(A ). Additi onal legal jurisdictional grounds of appeal raised above by the asse ssee ar e purely l egal i n nature goes to t he roo t of the matter can be taken as additi onal gr ounds at any stage o f proceeding and even befor e the Hon'ble ITAT for t he 1st time and are em anati ng from the records available before the Tribunal. The legal grounds do not r equire any investigati on and all materials are al ready on recor d befo re the Tribunal.
(B ) It is there humbl y pray ed before your honour to admit and adj udicate t he additi onal legal juri sdi cti onal gr ounds of appeal raised above. Reliance i n thi s regar d is placed upon t he decisi ons i n t he c ases o f "National Thermal Po wer C orpor ati on vs. CIT (1998) 229 ITR 383 (S C)", "VMT S pinni ng C o. Ltd Vs . CIT (2016) 389 ITR 326 (P &H)", "UOI Vs . R aj eev B ansal (2024) 469 ITR 46 (SC )".
The Revenue v ehemently objects to the assessee's aforesaid applicat ion for admissio n of additional grounds that the same deserve to be rejected since filed at this belated stage. We find no merit in the Revenue's instant technical objectio ns in light of NTPC Limite d Vs. CIT 229 IT R 383 (SC) & All Cargo Global Logistics Ltd. vs. DCIT 137 ITD 287 (Mum-SB) settling the issue in assessee's favour that the tribunal could very well enter tain such an additional ground(s) going to the root of the matter for the purposes of determining correct tax liability in a particular case subject to a rider that all relevant facts thereof form part of the r ecords. I make it clear that there is no dispute raised at the Revenue's behest regarding the relevant facts duly emanating from the case file. I thus admit the assessee's foregoing additional ground for o ur apt adjudicatio n.
I no w come to the basic relevant facts. There is hardly any dispute between the parties that the learned assessing authority had issued section 148 notice to the asse ssee o n 29.03.2021. He did not file any retur n in response there to. All this followed the Asse ssing Officer’s section 142(1) notice dated 29.06.202 1 followed by his assessment in que stion framed on 28.03.2022 disallowed the assessee’s sectio n 80C claim of Rs.1,00,000/- as not accepted which stands upheld in the lower appellate d iscussion.
It is in this factual backdrop that the assessee’ s case before us is that given the fact that the faceless regime in question got notified on 29.03.2022, the faceless asse ssment framed in his case on 28.03 .2022 is non-est in the eyes of law.
The Revenue has drawn stro ng support from the learned lower author ities respective findings framing the faceless assessment herein in the assessee ’s case. We find no reaso n to express our concurrence to the Revenue’s foregoing arguments. A perusal of the case file ind icates that this tribunal rece nt learned co-ordinate bench order in ITA No. 1328/Kol/2024 dated 15.10.2024 in Nabiul Industrial Metal Pvt. Ltd. Vs. ITO has decided the very issue against the department as under:
“1 .1. The brief fact s of the cas e of t he appellant ar e that the assessee Nabi ul Industrial Met al Pvt. Ltd. did not file the return o f i ncome for the AY 2017-18 as a result of whic h case of the assess ee was re-ope ned u/s 147 of the Act. The Ass essi ng Offic er (her einafter refe rred to as ld. 'AO') rec eived i nformatio n from the i nvesti gation wi ng, Kolkat a whe rei n i t was menti oned that in course of t he investigati on i n the case of M/s. Dar sh Coke Trading Pvt. Ltd., it was rev ealed that the said company is a paper company t hrough which ent ry operators p r ovide bogus entri es and layer money in exchang e of c ommissio n. It was also found that the one of the be nefici aries is the assessee company whi ch has received Rs . 15,00,000/-from a paper concern namel y Tanis hi Commotrades Pvt. Ltd. Duri ng the course of r e-assessment , the assessee was as ked t o explai n the t rans actions with Tanishi Commotr ades Pvt . Ltd. In response, the assess ee submitt ed that in t he current year i.e. FY 2016-17 the assessee t ook a loan/ advance from thi s party agai ns t sale of goods and in the immediat ely succeedi ng year i.e. FY 2017-18 sales were made to Tanis hi Commotrades Pvt. Ltd and s aid sale was duly cr edited in t he Pro fit and Loss account of the c ompany and tax was duly paid. Ho wever, the AO was not c onvi nc ed with t he submission filed by the assesse e and accordi ngly, added the sum of Rs. 15,00,000/- to t he i nc ome of the ass essee u/s 6 8 of the Act. The said ass essme nt order has been challe nged before the ld. CIT(A) wherei n in absenc e of any respons e from the appellant t he case of the assesse e has been dismissed.
Bei ng aggri eved and dissatisfi ed with the im pugned order, the pres ent app eal has been preferr ed.
1.2.The ld. Counsel for the ass essee challenges t he impugned order by ta ki ng s eve ral grounds but he, in course of heari ng, t ook an additi onal ground bei ng the legal gr ound and he press ed only legal gro und which are as follows :
“That the National Fac el ess Assessment C entre erred in having assumed jurisdiction u/s 151A r.w.s 144B of the Act from 29.11.2021 when they w ere not empowered under any notification about the applicability of the faceless sc heme f or maki ng asses sment i n fac eles s manner prior to 29.03.2022.”
1.3.Ld. Counsel for the assessee submitted that t he provisions o f Sectio n 151A of the Act came i n the statute on 01.11.2021 but i t was notifi ed wit h effect from 29.03.2022.But in the pres ent case , ass essme nt proc eedi ngs t o the NFAC star ted on 29.11.2021 which is evident from t he notic e u/s 142(1) of the Ac t. Ld. Couns el f or the assess ee furt her submits that the s how cause notic e has also been issued and the d ate has been menti oned as 28.0 3.2022 that is prior t o 29.03.2022. Ld. Couns el f or the assessee further submits that t he assumpti on of j urisdictio n by the NFAC was wi thout jurisdictio n. Conseque ntly, t he whole assessment is without j urisdiction and unsustai nable in law. Ld. C ounsel for the assess ee furt her dre w the atte nti on of t his B ench on t he issua nce of show c ause notice and submitt ed that it was served on 29.03.2022 and aske d the ass es see to furnish explanation on or before 29.03.2022,it means without gi ving the assesse e any opportunit y before frami ng of the assessment order. Ld. Counsel for t he assessee has filed the fol lowi ng papers :
Notificatio n of Ministry of Fi nance dated 29.03.2022.
Notice issued u/s 142(1) of t he A ct.
Show ca use not ice dated 28.03.2022.
Ld. D/R though supports the impugned orde r but did not rais e any objection on the l egal gr ound.
We have perused the rec or ds and t he papers filed by the assessee. It appea rs that Not ificatio n wi th r espect to Secti on 151A of t he Act has been m ade with effect from 29.03.2022 whic h is as under :
“S .O. 1466(E). —In exercise of the powers c onf erred by sub-secti ons (1) and (2 ) o f secti on 151A of the Inc ome-tax Act , 1961 (43 of 1961), the Cent ral Governme nt hereby makes the follo wi ng Sc heme, na mel y:-
1.Short titl e a nd co mmencement.—(1 ) This Sc heme may be c alled the e-Assessment of Income Esc aping Assessment Scheme, 2022.
(2 )It s hall come i nto force with effec t fr om the da te of i ts publicati on in the Official Gaz ette .
2.Defi niti ons .—(1) In this Sc heme, unl ess the c ontext ot herwise requi res , —
(a)“Act” m eans the I ncom e-tax Act, 1961 (43 of 1961);
(b)“aut omate d al locatio n” means a n al gorit hm for randomised allocation of cases , by usi ng suit able technol ogical tools, i ncl udi ng artificial intelligence and machi ne learning, with a vi ew t o optimise the use of res ourc es.
(2 )Words a nd expres sions used her ei n and not defi ned, but defi ned i n the Act, shall have the meani ng res pectivel y assigned to them i n the Act.
3.Scope of the Scheme. —For the purpose of this Scheme,—
(a)ass essme nt, reassessment or r e-computation under section 147 of t he Act,
(b)issua nce of notice under secti on 148 of the Act, shall be t hr ough automated allocati o n, in accordance with risk manage ment stra tegy formulated by the B oard as ref erred t o in se ction 148 of the Act for iss uance of notice, and i n a facel ess manner, to the exte nt pr ovi ded insecti on 144B of the Act with reference to ma king assessment or reass essment of total income o r loss of assessee.”
2.1.We have als o go ne thr ough the noti ce u/s 142(1) of the Ac t dated 29.11.2021 which is as follows:
2.2.We fur ther fi nd the show c aus e notice issued that also refl ect s the date 28.03.2022 which is as follows:
…………………… …………
2.3.It appears from the show cause notice issued on 28.03.2022 that at the bottom of the page it was digit al ly signed thereby gi vi ng dat e 29.03.2022 at 00:20:37 IS T.
2.4.We further fi nd that i n t he s how caus e notice t he assessee has been dir ected t o fur nish explana tion on or before 29.03.2022. It is surprising t hat when it was issued on 29.03.2 022 at 00:20:37 IS T and direct ed the assessee to explai n t he e xplanati on before 29.03.2022.
3.Keepi ng i n vi ew t he entire facts and discussions made above, we find s ubstanc e in the argument of t he ld. C IT(A ) that assumption of j uri sdicti on pri or to 29.03.2022 by t he ld. A O is to be held to be witho ut jurisdictio n. Acc ordingl y, the ass ess ment or der, passed, is to be deemed without jurisdiction. Subsequentl y, all the orders pass ed are hereby held t o be wit hout jurisdictio n.”
I adopt the above detailed discussion mutatis mutandis to accept the asse ssee’s instant additional/legal ground in very terms to quash the assessing authority’s assessment framed in his case on 28 .03.2022. Ordered accord ing ly.
All other plead ings on merits stand rendered academic.
This assessee’s appeal is allowed.