Faceless Regime Prevails: Reassessment by Jurisdictional AO Held Void

Flint Power Tools (P) Ltd. Vs ACIT (ITAT Delhi)

Faceless Regime Prevails- Reassessment by Jurisdictional AO Held Void – ITAT Delhi Quashes Notice u/s 148 Issued After NFAC Notification

Issue

Whether the reassessment proceedings initiated u/s 148 by the jurisdictional AO were void for lack of authority under Section 151A, in view of CBDT’s 2022 Notification assigning such powers exclusively to the National Faceless Assessment Centre (NFAC).

Facts

• Assessee, Flint Power Tools Pvt. Ltd., engaged in manufacturing power tools, was subjected to search u/s 132 on 10.11.2021 as part of the LSL Tools Group search.
• Post-search, jurisdiction was transferred to the Central Circle, Faridabad.
• AO issued notice u/s 148 on 26.03.2023, reopening AY 2019-20.
• Assessment was completed on 27.02.2024, determining income at ₹2.69 crore as against ₹2.35 crore, with disallowances of- ₹36 lakh (salary to director Smt. Sonia Singla) & ₹3,436 (employees’ PF contribution).

CIT(A), Gurgaon, upheld the reassessment & additions vide order dated 11.11.2024.

Assessee’s Arguments

• Jurisdictional invalidity: Notice u/s 148 was issued by jurisdictional AO, whereas per CBDT Notification dated 29.03.2022, only the NFAC was authorised to issue such notices u/s 148 under the faceless regime (Sec. 151A). Hence, the AO’s action was ultra vires & void ab initio.
• The same issue had already been decided in assessee’s favour by the Punjab & Haryana High Court for AYs 2015-16, 2016-17, & 2018-19, where identical notices were quashed.
• Therefore, the reassessment for AY 2019-20 suffers from the same legal defect & must also be annulled.

Tribunal’s Findings/Decision

• The Tribunal examined the records & noted that the notice u/s 148 (dated 26.03.2023) was issued by the jurisdictional AO, not by NFAC.
• The Punjab & Haryana High Court, in the assessee’s own cases (CWP Nos. 11685, 11683 & 11667 of 2025), had categorically held that—

“After the CBDT’s Notification dated 29.03.2022, only the NFAC has the exclusive power to issue notice u/s 148. Any notice issued by the jurisdictional AO thereafter is without jurisdiction & illegal.”