All One Knit Yarns Traders Vs ITO (ITAT Chennai)
Split Jurisdiction Fatal: JAO Starts, NFAC Finishes—Reassessment Collapses
In All One Knit Yarns Traders Vs. ITO , ITA No.2789/Chny/2025, AY 2019-20, order dated 31.12.2025, Chennai ITAT quashed reassessment on jurisdictional defect under faceless regime. Assessee was subjected to reopening on allegation of unexplained cash withdrawals of ₹3.27 crore, which were ultimately treated as unexplained expenditure u/s 69C in reassessment completed u/s 147 r.w.s. 144B by NFAC.
Tribunal noted that notice u/s 148A(b), order u/s 148A(d) & notice u/s 148 were all issued by Jurisdictional AO, whereas reassessment order was passed by Faceless Assessing Officer. Following Madras HC in TVS Credit Services Ltd. v. DCIT, Tribunal held that such split jurisdiction between JAO & FAO vitiates reassessment, as procedure prescribed under faceless regime was not followed. Consequently, reassessment order was held null in law & quashed, with liberty to Revenue subject to outcome of pending Apex Court proceedings. Appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order dated 06.10.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2019-20.
