TaxTMI 
TaxTMI 
2026 (6) TMI 874
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....eved with the same and is in appeal before us raising following grounds of appeal: - i. Grounds on addition of Rs. 2,25,00,000/- towards purchase of property: a. The learned assessing officer has failed to appreciate that the source for purchase of property is from bank loans, rental income, past savings, internal accruals, thus, the additions made deserve to be deleted, on the facts and circumstances of the case. b. The additions made under section 69 of the Act are not warranted as the source for purchase of property stands explained, on the facts and circumstances of the case. ii. Grounds on addition of Rs. 18,30,500/- u/s 69 of the Act towards cash deposits: a. The learned assessing officer has failed to appreciate that the cash deposits are from rental income, past savings and the addition made under section 69 of the Act deserves to be deleted on the facts and circumstances of the case. b. The additions made under section 69 of the Act are not warranted as the nature and source of cash deposits are explained on the facts and circumstances of the case. 4. The only issue in this Appeal is addition of Rs. 2,25,00,000/- tow....
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....5 cr and cash deposits in Chartered Sahakari Bank, Niyamitha, at Koramangala Branch, Account No.1001010740, Karnataka. 3. The appellant submits that appellant had filed statement of income as per 26AS and the learned Assessing officer passed assessment order on 26/03/2022 by making addition to the total income of the appellant as unexplained investment u/s 69. Therefore, addition of Rs. 2,43,30,500/- was made as unexplained Income. 4. The appellant being aggrieved by the assessment order preferred an appeal before Commissioner of Income-Tax (Appeal). The appellant had provided the appellant's mail id in form 35. [email protected] and also the email of the Chartered accountant for issuance of notices. 5. The learned CIT(A) issued only two notices i.e. on 24.08.2022 and on 22.05.2024.The first notice issued on 24.08.2022 was sent to the Chartered Accountant on his mail-id [email protected] and cc on appellant's mail id i.e. [email protected]. 6. The appellant submits that he was under presumption that the Chartered Accountant would handle the appeal proceedings. The second notice dt:22.05.2024 was sent to appellant's ma....
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....his reason the email of his chartered accountant was provided for the purpose of communication. 14. The true knowledge of the passing of the order of the CIT(A) was brought to the knowledge of the appellant in the last week of August 2025 and the appeal has been filed within a week thereafter. 15. The appellant humbly prays that this Hon'ble Tribunal considering the facts of the present case takes a lenient and compassionate view and may be pleased to condone the delay in filing the present appeal against the order passed by the learned first appellate authority. 16. The appellant places reliance on the decision of the Hon'ble Jurisdictional High Court in the case of CIT & Another Vs. ISRO Satellite Center, in ITA No. 532 of 2008 and other batch of appeal order dated 28/10/2011 has condoned the delay of 5 years in filing the appeal before the CIT[A], the relevant observation is at para 28 page 72 of the order. 17. The appellant places reliance on the decision of this Hon'ble Tribunal in the case of Smt. Shakuntala Hegde, Legal Heir of Mr. Ramakrishna Hegde Vs. ACIT, in ITA No. 2785/Bang/2004 order dated 25/04/2006 wherein the Hon'....
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....d. He submits that Assessee has stated that on 13.03.2025 he received an e-mail regarding the outstanding amount. However, there is no evidence placed before the Bench that Assessee did not receive the Appellate Order in time. He referred to the system of ITBA stating that there is an SMS alert and the orders are placed in ITBA portal as soon as it is announced. Therefore, it cannot be believed that the Assessee received order on 13.03.2025 which was passed on 03.06.2024. 10. We have carefully considered the rival submissions, perused the orders of the lower authorities, and examined the assessee's petition for condonation of delay. The learned CIT(A)'s order was passed on 3 June 2024. The assessee states that he became aware of it only on 13 March 2025, upon receiving an email from the Income Tax Department regarding the outstanding demand, which indicated that his appeal had already been disposed of. Even treating 13 March 2025 as the date of receipt, the appeal was filed on 2 September 2025, and the intervening delay must be explained. The assessee submits that, in the last week of August 2025, while consulting his Chartered Accountant for preparation of the return for Assess....
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....other than NFAC or any assessment unit under Section 144B(3). This takes effect retrospectively from April 1, 2021. Thus, this argument does not hold any water anymore and is dismissed. 14. The second argument raised by the learned authorized representative is that in case assessment is passed national faceless assessment Centre on 26th of March 2022 whereas the notification for which the National faceless assessment Centre to pass the assessment order came into effect from 29th of March 2022 and therefore the order passed is invalid. 15. The authorized representative relied upon the several judicial precedents of the coordinate benches starting from Kalawati Enterprises Pvt. Ltd Vs DCIT/NFAC (ITAT Patna) 358/PAT/2025,Nand Kumar Choudhury, passed in ITA No.420/CTK/2025, order dated 22.09.2025, 2025 (9) TMI 1744 - ITAT CUTTACK, Md. Mahimud SK in ITA Nos.2230&2229/Kol/2024 pronounced on 04.03.2025 2025 (3) TMI 1593 - ITAT KOLKATA, Jemamani Mohanta Versus ITO, Ward-1, Baripada 2025 (12) TMI 1816 - ITAT CUTTACK and Nabiul Industrial Metal Pvt. Ltd [2024 (10) TMI 1649 - ITAT KOLKATA]. The ld AR vehemently submits that these decisions of the coordinate bench bind this bench and no ....
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....ch in 2026 (2) TMI 250 - ITAT PATNA Kalawati Enterprises Pvt. Ltd., Patna Versus DCIT/NFAC, Delhi also followed these decisions. All these subsequent decisions neither looked at the logic or the provisions of law in the case of the first two decision of Kolkatta bench. 20. Prior to the Insertion of new section 144B with effect from 1/4/2022 this section Inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, w.e.f. 1-4-2021 reads as under: - "(1) Notwithstanding anything to the contrary contained in any other provisions of this Act, the assessment under sub-section (3) of section 143 or under section 144, in the cases referred to in sub-section (2), shall be made in a faceless manner as per the following procedure, namely:- (i) the National Faceless Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143; (ii) the assessee may, within fifteen days from the date of receipt of notice referred to in clause (i), file his response to the National Faceless Assessment Centre; (iii) where the assessee- (a) has furnished his return of income under section 139 or in....
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....hrough an automated allocation system; (ix) where a request for seeking technical assistance from the technical unit has been made by the assessment unit, the request shall be assigned by the National Faceless Assessment Centre to a technical unit in any one Regional Faceless Assessment Centre through an automated allocation system; (x) the National Faceless Assessment Centre shall send the report received from the verification unit or the technical unit, based on the request referred to in clause (viii) or clause (ix) to the concerned assessment unit; (xi) where the assessee fails to comply with the notice referred to in clause (vi) or notice issued under sub-section (1) of section 142 or with a direction issued under sub-section (2A) of section 142, the National Faceless Assessment Centre shall serve upon such assessee a notice under section 144 giving him an opportunity to show-cause, on a date and time to be specified in the notice, why the assessment in his case should not be completed to the best of its judgment; (xii) the assessee shall, within the time specified in the notice referred to in clause (xi) or such time as may be extended on t....
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....Faceless Assessment Centre about such concurrence; or (b) suggest such variation, as it may deem fit, in the draft assessment order and send its suggestions to the National Faceless Assessment Centre; (xviii) the National Faceless Assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in- (a) sub-clause (a) of clause (xvi); or (b) sub-clause (b) of clause (xvi); (xix) the National Faceless Assessment Centre shall, upon receiving suggestions for variation from the review unit, assign the case to an assessment unit, other than the assessment unit which has made the draft assessment order, through an automated allocation system; (xx) the assessment unit shall, after considering the variations suggested by the review unit, send the final draft assessment order to the National Faceless Assessment Centre; (xxi) the National Faceless Assessment Centre shall, upon receiving final draft assessment order follow the procedure laid down in- (a) sub-clause (a) of clause (xvi); or (c) sub-clause (b) of clause (xvi); (xxii) the assessee may, in a case where sho....
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....variations proposed in the revised draft assessment order are prejudicial to the interest of the assessee in comparison to the draft assessment order or the final draft assessment order, provide an opportunity to the assessee, by serving a notice calling upon him to show-cause as to why the proposed variation should not be made; (xxvi) the procedure laid down in clauses (xxiii), (xxiv) and (xxv) shall apply mutatis mutandis to the notice referred to in sub-clause (b) of clause (xxv); (xxvii) where the draft assessment order or final draft assessment order or revised draft assessment order is forwarded to the eligible assessee as per item (A) of sub-clause (a) of clause (xxiii) or item (A) of sub-clause (a) of clause (xxv), such assessee shall, within the period specified in sub-section (2) of section 144C, file his acceptance of the variations to the National Faceless Assessment Centre; (xxviii) the National Faceless Assessment Centre shall,- (a) upon receipt of acceptance as per clause (xxvii); or (b) if no objections are received from the eligible assessee within the period specified in sub-section (2) of section 144C, finalise the ass....
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....he cadre controlling region of a Principal Chief Commissioner, which shall be vested with the jurisdiction to make faceless assessment; (iii) assessment units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of making assessment, which includes identification of points or issues material for the determination of any liability (including refund) under the Act, seeking information or clarification on points or issues so identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making faceless assessment; (iv) verification units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of verification, which includes enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification; (v) technical units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of providing technical assistance which includes any a....
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....b-clause (g) of clause (xii) of sub-section (7). 7) For the purposes of faceless assessment- (i) an electronic record shall be authenticated by- (a) the National Faceless Assessment Centre by affixing its digital signature; (b) assessee or any other person, by affixing his digital signature if he is required to furnish his return of income under digital signature, and in any other case, by affixing his digital signature or under electronic verification code in the prescribed manner; (ii) every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of- (a) placing an authenticated copy thereof in the assessee's registered account; or (b) sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or (c) uploading an authenticated copy on the assessee's Mobile App, and followed by a real time alert; (iii) every notice or order or any other electronic communication shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the regi....
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....or any other person (other than statement recorded in the course of survey under section 133A of the Act) shall be conducted by an income-tax authority in any unit, exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony in accordance with the procedure laid down by the Board; (xi) the Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person is not denied the benefit of faceless assessment merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end; (xii) the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functi....
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.... any other person to the extent technologically feasible. (b) optimising utilisation of the resources through economies of scale and functional specialisation. (c) introducing a team-based assessment, reassessment, re-computation or issuance or sanction of notice with dynamic jurisdiction. (2) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (1), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March 2022. (3) Every notification issued under sub-section (1) and sub-section (2) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] 22. With effect from 1/4/2022,section 144B was replaced with a new section which reads as under: - ****] ^2[Faceless assessment. 144B. ^3[(1) Notwithstanding anything to the contrary contained in any other provision of this Act, the assessment, reassessment or recomputation under sub....
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....uest shall be assigned by the National Faceless Assessment Centre to a verification unit through an automated allocation system; or (b) for reference to the technical unit has been made by the assessment unit under sub-clause (c) of clause (iv), the request shall be assigned by the National Faceless Assessment Centre to a technical unit through an automated allocation system; vii. the National Faceless Assessment Centre shall send the report received from the verification unit or the technical unit, as the case may be, based on the request referred to in clause (vi) to the concerned assessment unit; viii. where the assessee fails to comply with the notice served under clause (v) or notice issued under sub-section (1) of section 142 or the terms of notice issued under sub-section (2) of section 143, the National Faceless Assessment Centre shall intimate such failure to the assessment unit; ix. the assessment unit shall serve upon such assessee, as referred to in clause (viii), a notice, through the National Faceless Assessment Centre, under section 144, giving him an opportunity to show-cause on a date and time as specified in such notice as to wh....
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....lause (a) of clause (xii) or clause (xv), as the case may be, the National Faceless Assessment Centre may, on the basis of guidelines issued by the Board,- (a) convey to the assessment unit to prepare draft order in accordance with the income or loss determination proposal, which shall thereafter prepare a draft order; or (b) assign the income or loss determination proposal to a review unit through an automated allocation system, for conducting review of such proposal; xvii. the review unit shall conduct review of the income or loss determination proposal assigned to it by the National Faceless Assessment Centre, under sub-clause (b) of clause (xvi), whereupon it shall prepare a review report and send the same to the National Faceless Assessment Centre; xviii. the National Faceless Assessment Centre shall, upon receiving the review report under clause (xvii), forward the same to the assessment unit which had proposed the income or loss determination proposal; xix. the assessment unit shall, after considering such review report, accept or reject some or all of the modifications proposed therein and after recording reasons in case of rejec....
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....rder to the National Faceless Assessment Centre; xxvii. where the eligible assessee files objections with the Dispute Resolution Panel, under sub-clause (b) of clause (xxiv), the National Faceless Assessment Centre shall send such intimation along with a copy of objections filed to the assessment unit; xxviii. the National Faceless Assessment Centre shall, in a case referred to in clause (xxvii), upon receipt of the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, forward such directions to the assessment unit; xxix. the assessment unit shall, in conformity with the directions issued by the Dispute Resolution Panel under sub-section (5) of section 144C, complete the assessment within the time allowed in sub-section (13) of section 144C and initiate penalty proceedings, if any, and send a copy of the assessment order to the National Faceless Assessment Centre; xxx. the National Faceless Assessment Centre shall, upon receipt of the assessment order referred to in clause (xxvi) or clause (xxix), as the case may be, serve a copy of such order and notice for initiating penalty proceedings, if any, on the assesse....
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....tion of verification, which includes enquiry, cross verification, examination of books of account, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification and the term "verification unit", wherever used in this section, shall refer to an Assessing Officer having powers so assigned by the Board: Provided that the function of verification unit under this section may also be performed by a verification unit located in any other faceless centre set up under the provisions of this Act or under any scheme notified under the provisions of this Act; and the request for verification may also be assigned through the National Faceless Assessment Centre to such verification unit; iv. such technical units, as it may deem necessary to facilitate the conduct of faceless assessment, to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical matter under this Act or an agreement entered into under section 90 or 90A, which may be require....
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.... authenticated by- a. the National Faceless Assessment Centre by way of an electronic communication; b. the assessment unit or verification unit or technical unit or review unit, as the case may be, 8[by way of an electronic communication]; c. assessee or any other person, by affixing his digital signature or under electronic verification code, or by logging into his registered account in the designated portal; ii. every notice or order or any other electronic communication shall be delivered to the addressee, being the assessee, by way of- a. placing an authenticated copy thereof in the registered account of the assessee; or b. sending an authenticated copy thereof to the registered email address of the assessee or his authorised representative; or c. uploading an authenticated copy on the Mobile App of the assessee, and followed by a real time alert; iii. every notice or order or any other electronic communication shall be delivered to the addressee, being any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert; ....
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....elecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the assessee, or his authorised representative, or any other person is not denied the benefit of faceless assessment merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end; xi. the Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of the National Faceless Assessment Centre shall, with the prior approval of the Board, lay down the standards, procedures and processes for effective functioning of the National Faceless Assessment Centre and the units set up, in an automated and mechanised environment. 7. (a) The Principal Chief Commissioner or the Principal Director General, as the case may be, in charge of the National Faceless Assessment Centre shall, in accordance with the procedure laid down by the Board in this regard, if he considers appropriate that the provisions of sub-section (2A) of section 142 may be invoked in the case,- i. forward the re....
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....r resource" shall have the same meaning as assigned to it in clause (k) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); f. "computer system" shall have the same meaning as assigned to it in clause (l) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); g. "computer resource of assessee" shall include assessee's registered account in designated portal of the Income-tax Department, the Mobile App linked to the registered mobile number of the assessee, or the registered email address of the assessee with his email service provider; h. "digital signature" shall have the same meaning as assigned to it in clause (p) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000); i. "designated portal" means the web portal designated as such by the Principal Chief Commissioner or the Principal Director General, in charge of the National Faceless Assessment Centre; j. "Dispute Resolution Panel" shall have the same meaning as assigned to it in clause (a) of sub-section (15) of section 144C; k. "faceless assessment" means the assessment proce....
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....g to the addressee; or (iv) in the case of addressee being an individual who possesses the Aadhaar number, the e-mail address of addressee available in the database of Unique Identification Authority of India; or (v) in the case of addressee being a company, the e-mail address of the company as available on the official website of Ministry of Corporate Affairs; or (vi) any e-mail address made available by the addressee to the income-tax authority or any person authorised by such authority. u. "registered mobile number" of the assessee means the mobile number of the assessee, or his authorised representative, appearing in the user profile of the electronic filing account registered by the assessee in designated portal; v. "video conferencing or video telephony" means the technological solutions for the reception and transmission of audio-video signals by users at different locations, for communication between people in real-time.] 23. It is further noted that Section 151A was inserted by the Finance Act, 2020 with effect from 01.11.2020 as an enabling provision. It empowered the Central Government to notify a scheme for faceless assess....
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.... reading of the Memorandum, the Finance Act, 2022 substitution expressly inserting "Section 147" in Section 144B(1), with effect from01.04.2022, appears clarificatory and procedural rather than a first-time conferment of jurisdiction. The stated object was to streamline the faceless assessment process and address legal and procedural difficulties in implementing the provision, indicating consolidation and refinement rather than creation of an entirely new jurisdiction. The description of the unamended Section 144B as covering only Sections 143(3) and 144 merely reflects its express wording; it does not, by itself, render an NFAC reassessment framed under Sections 143(3)/144 read with Section 147 a nullity. 28. The plea of invalidity is further weakened by the retrospective omission of erstwhile Section 144B(9), which had declared an assessment "non-est" or void where the faceless procedure was not followed. This sub-section was omitted by the Finance Act, 2022 with retrospective effect from 01.04.2021. The consequence is significant: during the relevant period, even non-compliance with the faceless procedure no longer attracted the statutory consequence of voidness. 29. Thus,....