Award Vintrade Pvt. Ltd. Vs ITO (ITAT Kolkata)
Section 147/144B Reassessment Quashed for Lack of NFAC Jurisdiction Before Section 151A Notification: ITAT Kolkata
The assessee filed appeals against the orders of the National Faceless Appeal Centre (NFAC), Delhi dated 02.03.2026 and 04.03.2026 for Assessment Years 2013-14, 2014-15 and 2017-18, including appeals against penalty levied under Section 271(1)(c) by order dated 11.11.2021. As the issues were identical, the Tribunal treated the appeal for AY 2017-18 as the lead case.
For AY 2017-18, the assessee challenged the validity of the assessment order passed by NFAC on 21.03.2022 under Sections 147 read with 144B, contending that it was without jurisdiction. The assessee had filed its return declaring a loss of ₹5,290. The Assessing Officer recorded that the assessee had allegedly received ₹1,70,00,490 through rotation of funds in the guise of bogus share premium and bogus investment from entities managed and controlled by Shri Mukesh Banka. The case was transferred to NFAC, which issued notice under Section 142(1) on 02.12.2021. After the assessee responded, NFAC completed the reassessment under Sections 147 read with 144B on 21.03.2022 by assessing total income at ₹1,70,16,700.
The assessee argued that although Section 151A relating to faceless assessment of income escaping assessment had been inserted with effect from 01.11.2020, the scheme was notified only on 29.03.2022 through Notification No. 18/2022. Therefore, NFAC lacked jurisdiction to issue notice under Section 142(1) on 02.12.2021 and to complete the reassessment on 21.03.2022. The Department contended that the assessment had been framed in accordance with Section 151A, which had already been introduced with effect from 01.11.2020.
