JOHN CHHETRI,AIZAWL V. THE INCOME TAX OFFICER, WARD- 1(2), GUWAHATI

ITA 139/GTY/2025

AI Insights

The case involves John Chhetri, the appellant, who challenged the validity of an assessment order issued by the NFAC under sections 147 and 144 of the Income Tax Act for the assessment year 2017-18. The primary legal issue was the jurisdiction of the NFAC to issue the assessment order, given that the relevant provisions for faceless assessments (Section 151A) were not operational until March 29, 2022, despite being enacted on November 1, 2020. The Tribunal admitted the additional ground raised by the assessee regarding the jurisdictional challenge and found in favor of the assessee, citing precedents and the specific legal framework governing faceless assessments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774844 (ITAT-GUWAHATI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 29-05-2025
• 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
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSIK RAY
• Assessee Lawyers: SOMNATH GHOSH; ITO WARD; GUWAHATI. NOTICE US
• Keywords: Validity of assessment
• Section: 147; 148; 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘DB’ BENCH, GUWAHATI (Virtual hearing at Kolkata) BEFORE SHRI RAJESH KUMAR, AM AND SHRI MANOMOHAN DAS, JM ITA No. 139/GTY/2025 (Assessment Year:2017-18) John Chhetri C/o S.N. Ghosh & Associates, Advocates 2, Garstin Place, 2 nd Floor, Suite No.203, Off hare street, Kolkata-700001, West Bengal Vs. ITO, Ward 1(2), Ghy Aayakar Bhavan, Guwahati, G.S. road, Christian Basti, Guwahati, Assam-781005 (Appellant) (Respondent) PAN No. AWJPC4246K Assessee by : Shri Somnath Ghosh, AR Revenue by : Shri Kausik Ray, DR Date of hearing: 02.09.2025 Date of pronouncement: 02.09.2025 O R D E R Per Rajesh Kumar, AM: This appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 29.03.2025 for the A.Y. 2017-18. 02. At the time of hearing, the ld. Counsel for the assessee raised an additional ground before us, challenging the validity of assessment framed u/s 147 read with section 144 of the Act dated 28.03.2022. 03. 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 Printed from counselvise.com Page | 2 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 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. 04. The facts in brief are that the notice u/s 148 of the Act was issued on 24.03.2021, by ITO Ward-1(2), Guwahati. The assessee complied with the said notice by filing the return of income on 20.12.2021. Thereafter, notice u/s 142(1) of the Act dated 02.11.2021 along with questionnaire was issued to the assessee by ITO Ward 1(2), Guwahati. Notice u/s 143(2) read with section 147 of the Act was issued by the ld. AO, National faceless assessment center (Delhi), on 21.02.2022. Thereafter, the show cause notice was issued on 18.03.2022 by national faceless assessment center calling for various details and information from the assessee. Finally, the assessment was framed by the ld. AO vide order dated 28.03.2022, passed u/s 147 read with section 144 / 144B of the Act. 05. 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 Printed from counselvise.com Page | 3 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 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 escaping income 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 that date and therefore, the whole of assessment is without jurisdiction and not sustainable in law. 06. The ld. DR on the other hand submitted that the assessment have been framed by the NFAC after notice u/s 143(2) of the Act and show cause notice were issued as the Provisions of Section 151A of the Act was brought on the statute book with effect from 1.11.2020. Therefore, the legal issue raised by the assessee may kindly be dismissed. 07. 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 and thereafter farming of assessment by the NFAC, in our opinion, is without jurisdiction as the Provisions of Section 151A of the Act were with effect 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 Printed from counselvise.com Page | 4 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 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 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 provisionw 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:- Printed from counselvise.com Page | 5 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 Printed from counselvise.com Page | 6 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 Printed from counselvise.com Page | 7 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 12. 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. 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.” 08. In view of the above facts and circumstances, we are inclined to quash the assessment framed by the ld. AO/ NFAC. 09. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 02.09.2025. Sd/- Sd/- (MANOMOHAN DAS) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 02.09.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 8 ITA No. 139/GTY/2025 John Chhetri; A.Y. 2017-18 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Guwahati Printed from counselvise.com "