G S AUTOM0BILES PRIVATE LIMITED,DELHI V. DCIT, CENTRAL CIRCLE-6, DELHI, DELHI

ITA 4341/DEL/2025

AI Insights

The case involves G S Automobiles Pvt. Ltd., the appellant, contesting the jurisdiction of the Assessing Officer (A.O.) from the National Faceless Assessment Centre (NFAC) who passed an assessment order for the Assessment Year 2018-19. The appellant argued that the jurisdiction had been transferred to Central Circle-6, New Delhi, prior to the assessment order being issued, and therefore, the NFAC A.O. lacked the authority to conduct the assessment. The Tribunal examined the legal provisions under the Income Tax Act, 1961, particularly sections 143(3), 127(3), and 119, along with relevant CBDT orders and precedents from the Delhi High Court.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840206 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 09-07-2025
• Other Referred Cases: Sanjay Gandhi Memorial Trust Vs. Commissioner of Income-tax (Exemption)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA KUMAR RAMAWAT
• Assessee Lawyers: NEERAJ MANGLA
• Section: 143(3)

Judgement Text

" ITA No. 4341/Del/2025 G S Automobiles Pvt. Ltd. Vs. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘A’: NEW DELHI) BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 4341/Del/2025 (Assessment Year- 2018-19) G S Automobiles Private Limited B-26, Okhla Industrial Area, Phase-II, South East Delhi, Tehkhand, Delhi Vs. Deputy Commissioner of Income Tax, Central Circle, 6 Delhi PAN No: AADCG1150B APPELLANT RESPONDENT Assessee by : Shri Neeraj Mangla, CA Revenue by : Sh. Krishna Kumar Ramawat, Sr. DR Date of Hearing : 03.12.2025 Date of Pronouncement : 27.02.2026 ORDER PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the Assessee is arising out of the order of Commissioner of Income Tax (Appeals)-24, Delhi, in Appeal No. CIT(A)- Delhi-24/10269/2017-18 vide order dated 23/06/2025. Assessment was framed by A.O. of NFAC, Delhi for Assessment Year 2018-19 u/s 143(3) r.w. Section 143(3A) and 143(3B) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 26/02/2021. Printed from counselvise.com 2 2. At the outset, the Ld. Counsel for the Assessee drew our attention to the Ground No. 1 & 2 raised regarding assumption of jurisdiction by the A.O. for framing of assessment under Section143(3) of the Act. The relevant Ground No. 1 & 2 reads as under:- “1. That the orders passed by Ld. AO u/s 143(3) of the Act as well as appellate order passed by Ld. CIT(A) are bad in law and are passed in contravention of prevailing law as well as facts of the case, therefore liable to be annulled. 2. That the assessment order dated 26/02/2021 passed by Ld. FAO, National e-Assessment Centre is not sustainable under the law as the jurisdiction over the case of assessee company was transferred to central charges by order u/s 127(3) of the Act dated 22/02/2021 and Hon'ble CBDT vide order u/s 119 of the Act dated 13/08/2020 specified that assessment order in cases assigned to Central Charges shall not be passed by National e-Assessment Centre.” 3. The Ld. Counsel for the Assessee drew our attention to the assessment order passed by the A.O. of NFAC, Delhi dated 26/02/2021 under Section 143(3) of the Act. The Ld. Counsel then took us through the order of PCIT, Delhi passed u/s 127(3) of the Act dated 22/02/2021 which is enclosed in Assessee’s Paper Book Page No. 1 & 2. The Ld. Counsel drew our attention to Item No. 2 in the table and stated that the Jurisdiction of the A.O. from Ward 10(3), New Delhi transferred to CC 06, New Delhi and the relevant chart reads as under: Printed from counselvise.com 3 Sl No. Name of the Assessee PAN From To 1 - - - - 2 G. S Automobile Pvt. Ltd. AADCG1150B Ward-10(3), New Delhi CC-06, New Delhi 3 - - - - 4. The Ld. Counsel for the Assessee stated that once the Jurisdiction of the Assessee was transferred to Central Circle 06, New Delhi vide order under Section 127(3) dated 22/02/2021, the assessment cannot be framed by the A.O. NFAC, where as assessment has to be framed by the A.O. of Central Circle i.e. Central Circle-06, New Delhi. The Ld. Counsel for the Assessee stated that since from 22/02/2021 onwards, Jurisdiction over the case of the Assessee was with central charge, the assessment order framed by National E-Assessment Centre, NFAC is bad in law and accordingly it needs to be quashed. The Ld. Counsel also relied on the order u/s 119 dated 13/08/2020, wherein CBDT vide F. No. 187/3/2020-ITA-1 has categorically issued order that of assessments assigned to central charge and assigned to International Tax Charge cannot be passed by the Faceless Assessing Officer. He drew our attention to the relevance CBDT Order and the same reads as under:- Printed from counselvise.com 4 “Subject Order under section 119 of the Income-tax Act, 1961 With the launch of various e-governance initiatives, Income-tax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the administration. tax-administration. 2. In order to ensure that all the assessment orders are passed through the Faceless Assessment Scheme, 2019, the Board in exercise of powers under section 119 of the Income-tax Act, 1961 hereby directs that all the assessment orders shall hereafter be passed by National e-Assessment Centre through the Faceless Assessment Scheme, 2019. except as provided hereunder :- (i) Assessment orders in cases assigned to Central Charges. (ii) Assessment orders in cases assigned to international Tax Charges. 3. Any assessment order which is not in conformity with Para-2 above. shall be treated as non-est and shall be deemed to have never been passed. 4. This order shall come into force with effect from the 13th day of August, 2020.” 5. The Ld. Counsel for the Assessee relied on the decision of Hon'ble High Court of Delhi in the case of Sanjay Gandhi Memorial Trust Vs. Commissioner of Income-tax (Exemption) [2023] 150 Taxmann.com 59 (Delhi)/[2023] 294 Taxman 130 (Delhi) [2023] 455 ITR 164 (Delhi) vide order dated 26/05/2023, wherein the Hon'ble High Court of Delhi considering the entire Printed from counselvise.com 5 Faceless Assessment Scheme and the Notification issued by CBDT dated 13/08/2020 held that once the assessments of the petitioners have been transferred to Central Circle, in accordance with law by way of the impugned orders passed under Section 127 of the Act, the assessment framed by National e-Assessment is without jurisdiction. The Ld. Counsel for the Assessee particularly drew our attention to para 48 to 58 which are reads as under: “S.O. 2756(E).-In pursuance of the powers conferred by sub-sections (1), (2) and (5) of section 120 of the Income- tax Act, 1961 (43 of 1961) (hereinafter referred to as the said Act), the Central Board of Direct Taxes hereby directs that the Income-tax Authorities of the National e- Assessment Centre (hereinafter referred to as the NeAC) specified in Column (2) of the Schedule below, having its headquarters at the place mentioned in column (3) of the said Schedule, shall exercise the powers and functions of Assessing Officer concurrently, to facilitate the conduct of Faceless Assessment proceedings)... (emphasis supplied) 49. It is clarified in the E-assessment and Faceless Assessment Scheme that once a case is selected for scrutiny, for the limited purpose of passing assessment order for a particular assessment year, the case is assigned to National e-Assessment Centre and after assessment, the electronic records of the case are to be transferred back to the Jurisdictional Assessing Officer. 50. Further, the E-assessment Scheme, 2019 and Faceless Assessment Scheme issued vide two Notifications each dated 12th September, 2019 and 13th August, 2020 under section 143(3A) and Section 143(3B) of the Act clearly stipulate that the provision of Printed from counselvise.com 6 section 127 of the Act shall apply subject to exceptions, modifications and adaptations as stipulated therein. In other words, if the Faceless Assessment Scheme has not modified section 127 of the Act, the powers under the said Section would continue to apply to all cases in an unmodified manner. 51. Clause (xxi) of the Notifications No. 61/2019 and 62/2019 dated 12th September, 2019 issued in exercise of powers under sections 143(3A) and 143(3B) of the Act in order to give effect to the E-assessment Scheme authorises the National e-Assessment Centre to transfer the case of the assessee at any stage of the assessment (i.e., only when the assessment proceeding is pending before the National e-Assessment Centre) to the Assessing Officer having jurisdiction over such case, as the scope of power and functions of National e- Assessment Centre is limited to facilitating the conduct of E-assessment. 52. Consequently, this Court is of the view that the two Notifications dated 12th September, 2019 enlarge and supplement the power of transfer by authorising the National e-Assessment Centre to transfer at any stage of assessment the case of the assessee to the Assessing Officer having jurisdiction over such case i.e., from Faceless Assessing Officer to Jurisdictional Assessing Officer (an Assessing Officer always having concurrent jurisdiction). 53. To the same effect are the Notifications dated 13th August, 2020, which clarify, \"The provisions of .....Section 127 of the Act shall apply to the assessment made in accordance the said Scheme subject to the following exceptions, modifications and adaptations....\". Clause (2) of the Notifications No. 60 and 61 of 2020 dated 13th August, 2020 enable the Principal Chief Commissioner or Principal Director General in charge of National e-Assessment Centre, at any stage of the assessment i.e. during assessment, to send back the case to the Assessing Officer having jurisdiction over such case, with prior approval of the Board. Clause (2) of the Scheme only authorises a transfer back to the Printed from counselvise.com 7 Jurisdictional Assessing Officer holding original jurisdiction, which he never loses as it is only the function of assessment that is to be carried out by the Faceless Assessing Officer having concurrent jurisdiction. Consequently, clause (2) of the Scheme only re-transfers the function of assessment to the Jurisdictional Assessing Officer holding concurrent jurisdiction. Further, the said clause confers power of transfer upon Principal Chief Commissioner or Principal Director General of National e-Assessment Centre and not upon any other Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 54. Also, this power under clause (2) is nowhere akin to the power to transfer under section 127(2) of the Act wherein the jurisdiction over a 'case' of an assessee is transferred by Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from one Assessing Officer under one Commissioner to another Assessing Officer under another Commissioner i.e. to another Assessing Officer not holding concurrent jurisdiction over the assessee. 55. Consequently, even in case of assessee wherein the assessment proceeding is pending before the National e- Assessment Centre, it does not have the power either under E-assessment or Faceless Assessment Scheme to transfer the case from Jurisdictional Assessing Officer to Central Circle, as its power and functions are limited to facilitation of E-assessment/Faceless Assessment proceedings. 56. The above mentioned sub-clauses in the Notifications dated 12th September, 2019 and 13th August, 2020 refer to transfers made from the 'National e-Assessment Centre at any stage of the assessment i.e. during the process of assessment alone, whereas any transfer order under section 127 of the Act changes the Assessing Officer having jurisdiction over such case Printed from counselvise.com 8 from one officer to another at any stage i.e. even when there is no pending proceeding. 57. The contention of the petitioners that the requirement of \"prior approval\" of CBDT (as stipulated in the Notifications dated 12th September, 2019 and 13th August, 2020) has been violated is untenable as the transfers in the present writ petitions fall under section 127 of the Act and not under the said Notifications. 58. Consequently, the transfer of a case under section 127 of the Act is an altogether different power which continues to exist even after introduction of the E- assessment/Faceless regime. Accordingly, the said Scheme does not in any manner trammel upon or negate the existing powers contained in Section 127 of the Act to transfer the cases as provided for thereunder. Consequently, the power of transfer under section 127 of the Act is not in any manner denuded by the Faceless Assessment Scheme when the transfer is sought to be made from a Jurisdictional Assessing Officer under one Principal Commissioner of Income-tax to another Assessing Officer under a different Principal Commissioner of Income-tax who are not exercising concurrent jurisdiction over the case.” 6. When these facts were confronted to Ld. Sr. Ld. Departmental Representative, he could not controvert the above facts. 7. We have heard both the parties and perused the material available on record. We noted that admittedly the Assessee’s Jurisdiction was transferred under Section 127(3) by the PCIT, 4, New Delhi vide order dated 22/02/2021. The Assessee’s case was transferred to Central Circle-6, New Delhi w.e.f 22/02/2021 Printed from counselvise.com 9 as the order clearly mentions that this order will take with immediate effects. The A.O. of NFAC passed assessment order vide order dated 26/02/2021. In the given facts and circumstances of the case and the precedents cited by Ld. Counsel of Jurisdictional High Court in the case of Sanjay Gandhi Memorial Trust (supra), wherein this is clarified that transfer of the case under Section 127 continues to exist even after initiation of e-Assessment Scheme and accordingly where the transfer of assessment of the Assessee to Central Circle for coordinated investigation by way of order passed under Section 127 of the Act, the assessment has to be framed at Central Circle and not with NFAC. In the present case also, the assessment should have been framed by the A.O. of Central Circle. Hence, the present assessment order passed by A.O. of NFAC under Section 143(3) dated 26/02/2021 is without jurisdiction and hence quashed. 8. In the result, Appeal of the Assessee is allowed. Order pronounced in the Open Court on 27th February, 2026 Sd/- Sd/- (MANISH AGARWAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT Dated: 27.02.2026 R. Naheed, Sr. PS Printed from counselvise.com 10 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "