9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (4) TMI 536 - AT - Income TaxValidity of order passed u/s 147 r.w.s.144B by National Faceless Assessment Centre - whether it is without jurisdiction as provisions of Section 151A as the the e-assessment of Income escaping assessment scheme 2022 was notified on 29.03.2022 vide notification No.18/2022/F.No.370142/16/2022-TPL for assessment? HELD THAT - The case of the assessee find support from the decision of Nabiul Industrial Metal Pvt. Ltd 2024 (10) TMI 1649 - ITAT KOLKATA wherein allowed the appeal of the assessee by holding that the assumption of jurisdiction by the NFAC is invalid as there is no power with NFAC to issue notice u/s 142(1) of the Act prior to 29.03.2022 because the scheme of faceless enquiry u/s 142B for issuance of notice u/s 142(1) of the Act by NFAC was notified on 30.03.2022 vide Notification no. 19/2022 though it was inserted on the statute book w.e.f. 1.11.2020 for faceless enquiry and valuation. Further u/s 151A e-assessment of income escaping assessment scheme 2022 was duly notified on 29.03.2022 vide notification no. 18/2022/F.No/370142/16/2022-TPL for assessment reassessment or re-computation under section 147 of the Act through automated allocation in accordance with risk management strategy formulated by the Board as referred to in Section 148 for issuance of notice and in a faceless manner to the extent provided in Section 144B. Therefore prior to 29.3.2022 the NFeAC has no jurisdiction to make assessment u/s 147 or to issue notice 142(1) vide notification no. 18/2022 dated 29.03.2022 u/s 151A. Accordingly appeal of the assessee is allowed.
ISSUES PRESENTED and CONSIDERED
The core legal issue considered in this judgment is whether the National Faceless Assessment Centre (NFAC) had the jurisdiction to issue a notice under Section 142(1) of the Income Tax Act, 1961, prior to the notification of the faceless assessment scheme on 29.03.2022. This involves examining the validity of the assessment order passed under Sections 147, 144, and 144B of the Act, given the timing of the relevant notifications and the jurisdictional authority of the NFAC. ISSUE-WISE DETAILED ANALYSIS Jurisdiction of NFAC to Issue Notice under Section 142(1) Relevant Legal Framework and Precedents: The legal framework revolves around the provisions of Sections 142(1), 144B, 147, and 151A of the Income Tax Act, 1961. Specifically, Section 142(1) pertains to the power to issue notices for assessment, Section 144B deals with the faceless assessment scheme, Section 147 pertains to income escaping assessment, and Section 151A relates to the jurisdiction for faceless assessments. The Tribunal references a precedent from the coordinate bench in the case of Nabiul Industrial Metal Pvt. Ltd. Vs. ITO, which held that the NFAC lacked jurisdiction to issue notices under Section 142(1) prior to the relevant notification dates. Court's Interpretation and Reasoning: The Tribunal analyzed the sequence of notifications and the statutory provisions. It noted that the NFAC issued a notice under Section 142(1) on 16.12.2021, at a time when it did not possess the jurisdiction to do so. The relevant notification granting such jurisdiction was only issued on 30.03.2022 (Notification No. 19/2022), with the faceless assessment scheme under Section 151A being notified on 29.03.2022 (Notification No. 18/2022). Therefore, the Tribunal concluded that the NFAC acted without jurisdiction. Key Evidence and Findings: The Tribunal found that the NFAC issued notices and conducted assessments without the requisite jurisdictional authority, as the legal framework empowering such actions was not in effect at the time the notices were issued. The Tribunal relied on the specific dates of the notifications and the statutory amendments to support its findings. Application of Law to Facts: The Tribunal applied the statutory provisions to the facts, determining that the NFAC's actions were premature and beyond its jurisdiction. The assessment order dated 27.03.2022 was deemed invalid as the jurisdictional authority was only conferred after the relevant notifications were issued. Treatment of Competing Arguments: The Tribunal considered the submissions of the Departmental Representative, which attempted to justify the NFAC's actions. However, it found these arguments unpersuasive and lacking in merit, as they did not align with the statutory requirements and the timing of the notifications. Conclusions: The Tribunal concluded that the NFAC lacked the jurisdiction to issue the notice under Section 142(1) and complete the assessment under Section 147 prior to the notification dates. Consequently, the appeal of the assessee was allowed, and the assessment order was set aside. SIGNIFICANT HOLDINGS The Tribunal established a core principle that jurisdictional authority must be strictly adhered to, particularly in the context of faceless assessments. It held that the NFAC's actions were invalid due to the lack of jurisdiction at the time of issuing the notice under Section 142(1). Preserve Verbatim Quotes of Crucial Legal Reasoning: "Therefore, it is apparent from the above that the NFeAC had no jurisdiction to issue notice u/s 142(1) of the Act prior to 30.03.2022, because the scheme of faceless enquiry u/s 142B of the Act for issuance of notice u/s 142(1) of the Act by NFeAC was notified on 30.03.2022 vide Notification no. 19/2022." Core Principles Established: The Tribunal reinforced the principle that statutory authority and jurisdiction are prerequisites for valid assessment actions. Notifications conferring jurisdiction must be in effect before any actions are taken under the relevant provisions. Final Determinations on Each Issue: The Tribunal determined that the NFAC's issuance of the notice under Section 142(1) and the subsequent assessment order were without jurisdiction and, therefore, invalid. The appeal was allowed, and the assessment order was set aside.
|
