Case Law Details
Kalawati Enterprises Pvt. Ltd Vs DCIT/NFAC (ITAT Patna)
NFAC Lacked Jurisdiction Before 29-03-2022 – ITAT Patna Quashes Reassessment Order Passed on 24-03-2022
The Patna Bench of the ITAT allowed the assessee’s appeal for AY 2013-14 and quashed the reassessment order passed by the National Faceless Assessment Centre (NFAC), holding that the order was without jurisdiction, since the statutory notification enabling NFAC to conduct reassessments had come into force only from 29-03-2022, whereas the impugned assessment order was passed earlier on 24-03-2022.
The reassessment had been framed u/s 147 r.w.s. 144B by NFAC. The assessee contended that although section 151A was inserted earlier, the scheme for faceless reassessment became operative only upon CBDT Notification dated 29-03-2022, and therefore NFAC had no authority to issue notices or pass assessment orders before that date.
The Tribunal noted that identical issues had already been decided by coordinate benches in Md. Mahimud SK (ITAT Kolkata), Nand Kumar Choudhury (ITAT Cuttack) and Nabiul Industrial Metal Pvt. Ltd., wherein reassessment orders passed by NFAC prior to 29-03-2022 were held void ab initio.
Applying these precedents, the ITAT held that:
- The assessment order dated 24-03-2022 was passed before the faceless reassessment scheme was notified.
- NFAC therefore lacked inherent jurisdiction to conduct the proceedings or pass the order.
- Jurisdictional defect goes to the root and renders the entire assessment non est in law.
Accordingly, the ITAT quashed the reassessment order in toto without going into merits, and the appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT PATNA
This is an appeal filed by the assessee against the order of the Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 30.06.2025 passed for the assessment year 2013-2014.
2. It was submitted by the ld. AR that the assessment in the case of the assessee was completed u/s.147 r.w.s.144B of the Act by the AO(NFAC), Delhi on 24.03.2022. It was the submission that the notification for which the National Faceless Assessment Centre to pass the assessment order came into effect from 29.03.2022. It was the submission that as the assessment order has been passed before the said notification has been issued, the assessment order is liable to be quashed as being without jurisdiction. The ld. AR also relied on the decision of the ITAT Kolkata Bench of the Tribunal in the case of Md. Mahimud SK passed in ITA Nos.2230&2229/Kol/2024, order dated 04.03.2025, which has been followed by the Cuttack Bench of the Tribunal in the case of Nand Kumar Choudhury, passed in ITA No.420/CTK/2025, order dated 22.09.2025, wherein the coordinate bench has held in para 02 to 05 as under :-
2. It was submitted by the ld. AR that the assessment order in the case of assessee has been passed by the NFAC on 28.03.2022. It was the submission that the Notification by which the National Faceless Assessment Centre was made effective is dated 29.03.2022. It was the submission that consequently the assessment order passed on 28.03.2022 is liable to be quashed. Ld. AR placed reliance on the decision of the coordinate bench of the Tribunal in the case of Md. Mahimud SK in ITA Nos.2230&2229/Kol/2024 pronounced on 04.03.2025, wherein in para 10 to 12, the coordinate bench of the Tribunal has held as under :-
010. After hearing the rival contentions and perusing the materials available on record, we find that the notice to the assessee was issued u/s 148 of the Act on 31.03.2021, through e-mail after the case was reopened u/s 147 of the Act. Notice u/s 143(2) read with section 147 of the Act was issued on 29.06.2021 and thereafter , the proceedings would taken over by National Faceless Centre, Delhi and notice u/s 142(1) dated 09.02.2022, was issued and thereafter show cause was issued to assessee by the NFAC on 17.03.2022. Finally, the assessment was framed u/s 147 read with section 144B of the Act vide order dated 23.03.2022.
011. We have perused the section of Section 151A of the Act, which deals with the faceless assessment of income escaping assessment and was brought on the statute book by taxation and other law (realization and amendment of certain provisions) Act, 2020, with effect from 01.11.2020 which was notified on 29.03.2022 vide notification no.18/2022/F. No. 370142/16/2022-TPL(Part)]. Therefore, the assessment proceedings were taken by the National Faceless Assessment Centre, Delhi by issuing notice u/s 142(1) dated 09.02.2022 and thereafter the assessment was framed accordingly after issuing show cause notice which in our opinion is without jurisdiction. The provision of Section 151A of the Act were brought on the statute book with effect from 01.11.2020. However, the same were made effective and applicable with effect from 29.03.2022 vide notification no. when the CBDT notified the new scheme for assessment of income escaping assessment scheme, 2022. In our considered view the assessment framed is without jurisdiction and cannot be sustained. The case of the assessee find force from the decision of Nabiul Industrial Metal Pvt. Ltd., Paschim Medinipur VS. I.T.O., in ITA no. 1328/KOL/2024 for A.Y. 2017-18, the order dated 15.10.2024, wherein a similar issue has been decided in favor of the assessee. For the sake of ready reference, the notice issued u/s 142(1) dated 09.02.2022 and show cause notice dated 17.03.2022, are extracted below:-
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012. Considering the above facts and legal position, we are of the considered opinion that the order passed by the NFAC, Delhi is without jurisdiction and is hereby quashed. The appeal of the assessee is allowed.
3. It was the submission that the assessment year in the impugned appeal is liable to be quashed as the assessment order has been passed by the NFAC on 28.03.2022.
4. In reply, ld. Sr. DR vehemently supported the orders of the ld. AO and ld.CIT(A). It was the submission that there are no other decisions on this issue and, therefore, the appeal may be heard on merits.
5. We have considered the rival submissions. Here in the appeal on merits would have no implication, insofar as on the technicality itself the issue has been held against the revenue by the coordinate bench of the Tribunal in the case of Md. Mahimud SK, referred to supra, wherein one of us is a party to the order. This being so, the decision of the coordinate bench of the Tribunal in the case of Md. Mahimud SK, referred to supra, as it is noticed that the assessment order has been passed by the NFAC on 28.03.2022 being prior to the date of notification is bad in law and consequently the same stands quashed.
3. It was the submission that the assessment order is liable to be quashed.
4. In reply, ld. Sr. DR submitted that the assessee has cooperated in the assessment proceedings. It was the submission that such arguments had not be placed before the AO in the course of assessment proceeding.
5. We have considered the rival submissions of the parties. As it is noticed that the assessment order is dated 24.03.2022 and the notification for NFAC came into effect w.e.f. 29.03.2022. Therefore, respectfully following the decision of the coordinate bench of the Tribunal in the case of Nand Kumar Choudhury, referred to (supra), it is held that the NFAC did not have jurisdiction to pass the assessment order. Consequently, the assessment order passed by the NFAC dated 24.03.2022 in the impugned appeal stands quashed.
6. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 16/01/2026.
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