AgaraPasala Reddy Prasanna Vs ACIT (ITAT Bangalore)
Bangalore ITAT Condones 367-Day Delay and Rejects Challenge to NFAC Jurisdiction in Reassessment Case
The Bangalore ITAT, in the case of AgaraPasala Reddy Prasanna v. ACIT (AY 2017-18), condoned a 367-day delay in filing the appeal after accepting the assessee’s explanation that he was unaware of the CIT(A)’s ex parte order and came to know of it only upon receiving a demand-related communication. The Tribunal held that the delay was supported by sufficient cause and that the appeal was filed promptly once the assessee became aware of the appellate order.
On the legal issue, the assessee argued that the reassessment order dated 26.03.2022 passed by the National Faceless Assessment Centre (NFAC) was invalid because the notification relating to the faceless reassessment scheme came into effect only on 29.03.2022. Reliance was placed on several decisions of the Kolkata, Cuttack and Patna Benches that had quashed similar reassessment orders. However, the Bangalore ITAT undertook an extensive analysis of the statutory provisions of Sections 144B and 151A and observed that the earlier decisions had primarily focused on the notification without adequately examining the underlying statutory framework.
The Tribunal further noted that the Finance Act, 2026 had inserted Section 147A retrospectively from 01.04.2021, clarifying the jurisdictional position in reassessment matters. It therefore rejected the assessee’s contention that the reassessment order was invalid merely because it had been passed by NFAC before the issuance of the notification relied upon by the assessee. The Tribunal also rejected the argument that only the jurisdictional Assessing Officer could have completed the reassessment
AUTHORS COMMENTS
The Bangalore ITAT has taken a view contrary to certain earlier Tribunal rulings and upheld the validity of reassessment proceedings conducted through the faceless mechanism, while also adopting a liberal approach in condoning substantial delay where a bona fide explanation exists. The issue of validity of retrospective insertion of section 147A is sub-judice as the Honourable Apex Court in its common order in Diary No. 2196/2026 disposed a large batch of civil appeals (popularly referred to as the JAO–FAO batch) arising from reassessment proceedings under sections 147–151 of the Income-tax Act, 1961 (the Act). The impugned High Court decisions had set aside orders passed under section 148A(d) of the Act and consequential notices issued under section 148 of the Act on the ground that they were issued by Jurisdictional Assessing Officer(s) (JAO), rather than through the prescribed faceless mechanism or competent Faceless Assessment Officer(s) (FAO), while certain other High Courts had upheld the authority of the JAOs. The Supreme Court has remitted the matters to the respective High Courts for fresh adjudication in light of the retrospective insertion of section 147A by the Finance Act, 2026 (FA 2026).
FULL TEXT OF THE ORDER OF ITAT BANGALORE
