Faceless assessment compliance and evidentiary scrutiny required fresh Tribunal adjudication where jurisdictional objections went undecided.

Non-compliance with the faceless assessment safeguards under section 144B was treated as a jurisdictional objection going to the root of the assessment, and the Tribunal's failure to adjudicate that issue required correction. The dispute also concerned whether documentary evidence such as GST returns, banking trail and related material sufficiently established the genuineness and creditworthiness of the transactions. The matter was remitted for fresh adjudication on both the jurisdictional challenge and the merits, with the Tribunal directed to consider the evidence in full and grant proper opportunity to the assessee.

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Issues: (i) Whether the assessment was liable to be set aside for alleged non-compliance with the faceless assessment procedure under section 144B of the Income-tax Act, 1961, a jurisdictional contention going to the root of the matter; and (ii) whether the matter required reconsideration on merits for proper appreciation of the documentary evidence concerning the genuineness and creditworthiness of the transactions.

Issue (i): Whether the assessment was liable to be set aside for alleged non-compliance with the faceless assessment procedure under section 144B of the Income-tax Act, 1961, a jurisdictional contention going to the root of the matter.

Analysis: The assessment challenge centred on the contention that the show-cause procedure and the mandatory safeguards under the faceless assessment regime were not followed before the addition was made. The contention was treated as a jurisdictional objection, and it was found that no finding had been rendered by the Tribunal on this aspect. Since the issue went to the root of the assessment, the omission to adjudicate it could not be ignored.

Conclusion: The jurisdictional issue was required to be adjudicated by the Tribunal, and the assessment order could not be sustained without such adjudication.

Issue (ii): Whether the matter required reconsideration on merits for proper appreciation of the documentary evidence concerning the genuineness and creditworthiness of the transactions.

Analysis: The dispute also involved disallowance of expenditure treated as unexplained or bogus, where the assessee relied on GST returns, banking trail and other documents to establish the transactions. It was held that the Tribunal needed to consider the material in its entirety and that the assessee deserved a fresh opportunity for proper appreciation of the evidence.

Conclusion: The merits also warranted reconsideration by the Tribunal.

Final Conclusion: The impugned Tribunal order was set aside and the matter was remitted for fresh adjudication, resulting in relief to the assessee.

Ratio Decidendi: A jurisdictional objection affecting the validity of an assessment must be adjudicated, and where such an issue remains undecided, the matter requires remand for fresh consideration on both jurisdiction and merits.

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