GOUTAM KUMAR SARKAR,MATIGARA V. ITO, WARD 1(3), SILIGURI

ITA 1297/KOL/2025

AI Insights

The case involves two appeals by Gautam Kumar Sarkar against the orders of the NFAC, which had assessed additional income and imposed penalties for the assessment year 2013-14. The primary legal issue was the jurisdiction of the NFAC to conduct these assessments under the faceless assessment scheme, specifically the applicability of Section 151A of the Income Tax Act, 1961. The Tribunal examined whether the NFAC had the authority to issue notices and conduct assessments prior to the official notification of the faceless assessment scheme on March 29, 2022. The Tribunal concluded that the NFAC acted without jurisdiction as the relevant provisions were not in effect at the time of the assessments.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 837927 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 16-06-2025
• Other Referred Cases: Jute Corporation of India Ltd. Vs CIT, National Thermal Power Co. Ltd v. CIT, PCIT vs. Britannia Industries Ltd., MD Mahimud SK Vs. ITO, Nabiul Industrial Metal Pvt. Ltd., Paschim Medinipur VS. I.T.O.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 144; 142(1); 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH,KOLKATA SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. Nos.1103 & 1297/Kol/2025 (Assessment Year 2013-14) Gautam Kumar Sarkar, New Paulpara, Balason Colony, Matigara - 734010 [PAN: AXUPS5997D] ……..…...……………....Appellant vs. ITO, Ward – 1(3), Siliguri, Aayakar Bhawan, Matigara, Siliguri – 734010 ……..…...…………….... Respondent Appearances by: Assessee represented by : Sujit Basu & Rajib Mukherjee, Adv. Department represented by : Sandip Sarkar, JCIT Date of concluding the hearing : 28.01.2026 Date of pronouncing the order :17.02.2026 O R D E R Per Rajesh Kumar, AM The present two appeals filed by the assessee are arising from orders dated 19.05.2025 and 02.06.2025 passed u/s 250 of the Income Tax Act, 1961 (hereafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter referred to as “the Ld.CIT(A)]. ITA No. 1103/Kol/2025 2. At the outset, the Ld. Counsel of the assessee pointed out that the assessee has raised additional ground challenging the jurisdiction of National Faceless Appeal Centre (NFAC) to frame assessment order dated 29.09.2021 as without jurisdiction and therefore, the same is invalid and Printed from counselvise.com 2 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar may be quashed. The additional ground raised by the assessee is extracted below: “National faceless Assessment Centre (NFAC) erred in having assumed jurisdiction under section 151A, read with section 144B of the Income Tax Act, 1961 from 18.02.2021 when they were not empowered under section any Notification under section 151A about the applicability of the faceless scheme for making income escaping assessment in faceless manner prior to 29.03.2022.” 3. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688, ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adjudication. 4. The ld. AR vehemently submitted before us that the order passed by the NFAC is without jurisdiction as though the provisions dealing with the faceless assessment of income escaping the assessment u/s 151A of the Act was brought on statute book by taxation and other law (relaxation and amendment of certain provisions) Act, 2020, with effect from 01.11.2020, however, the counsel of the assessee vehemently submitted before us that though the provisions of Section 151A of the Act came on the statute book on 01.11.2020 but the same were notified on 29.03.2022 vide notification no. 18/2022 on e-assessment of income Printed from counselvise.com 3 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar escaping income scheme of 2022. Therefore, the ld. Counsel for the assessee submitted that the assumption of jurisdiction by the National faceless assessment center was without valid jurisdiction as the provisions of Section 151A of the Act had not come into operation on the date 29.3.2022 when these were notified and therefore, the assessment is without jurisdiction and not sustainable in law. 5. The ld. DR on the other hand submitted that the assessment have been framed by the NFAC after issuing notice u/s 143(2) of the Act and show cause notice as the Provisions of Section 151A of the Act was brought on the statute book with effect from 01.11.2020. Therefore, the legal issue raised by the assessee may kindly be dismissed. 6. After hearing the rival contentions and perusing the materials available on record, we find that the Section 151A of the Act deals with the faceless assessment or income escaping assessment and was brought on the statue book by taxation and other law (relaxation 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 issuance of notice u/s 143(2) of the Act and show cause notice prior to 29.3.2022 and thereafter farming of assessment by the NFAC are, in our opinion, without jurisdiction as the Provisions of Section 151A of the Act were with effective from 29.03.2022. In considered opinion, the assessment framed is without jurisdiction and cannot be sustained. The case of the assessee is squarely covered by the decision of the co-ordinate in case of MD Mahimud SK Vs. ITO in ITA no. 2230 & 2229/KOL/2024 vide order dated 04.03.2025 wherein the co-ordinate Bench has decided the issue by observing and holding as under:. “11. 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 Printed from counselvise.com 4 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar 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 ac- cordingly after issuing show cause notice which in our opinion is without ju- risdiction. The provisionw of Section 151A of the Act were brought on the stat- ute 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 assess- ment 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:- Printed from counselvise.com 5 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar Printed from counselvise.com 6 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar Printed from counselvise.com 7 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar 12. Considering the above facts and legal position, we are of the con- sidered opinion that the order passed by the NFAC, Delhi is without juris- diction and is hereby quashed. The appeal of the assessee is allowed. 13. The additional ground raised in ITA No. 2230/Kol/2024 A.Y.2017- 18 is similar to one as decided by us in ITA No. 2229/Kol/2024 A.Y. 2015-16. Therefore, our decision would, mutatis mutandis, apply to this appeal as well. The appeal of the assessee is allowed. 14. In the result, the appeal of the assessee is allowed.” 7. 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. ITA No. 1297/Kol/2025 8. Since we have quashed the assessment framed by the AO u/s 147 read with section 144 read with section 144B of the Act as without jurisdiction, therefore, the penalty imposed u/s 271(1)(c) of the Act vide order dated 16.03.2022 passed u/s 271(1)(c) of the Act of Rs. Printed from counselvise.com 8 ITA Nos.1103 & 1297/Kol/2025 Gautam Kumar Sarkar 1,54,35,889/- has no legs to stands and is also invalid. Therefore, the AO is directed to delete the same. 9. In the result, both the appeals of the assessee are allowed. Order pronounced on 17.02.2026 Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated:17.02.2026 AK,Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "