The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded the case of the Bar Council of Delhi (BCI Delhi) to the National Faceless Appeal Centre (NFAC) for fresh adjudication, citing that notice was not served to the assessee under Section 148 for initiating proceedings under section 144 of the Income Tax Act, 1961.
The Bar Council of Delhi (assessee) filed appeals for Assessment Years 2011-12 to 2014-15 against the orders of the Commissioner of Income Tax (Appeals), NFAC, dated 10.01.2025. These orders arose from assessments completed by the Assessing Officer (AO).
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The Assessing Officer (AO) completed the assessments ex-parte as the assessee did not respond to the notices issued. On appeal to the NFAC restored the matters to the AO for a fresh hearing on merits but failed to address the assessee’s challenge to the validity of the reassessment proceedings.
Aggrieved by the order of NFAC, the assessee filed an appeal before the ITAT. The Counsel for the assessee argued that no notices under Section 148 were served in accordance with the provisions of the Act.
The counsel submitted that the notices were issued beyond the statutory limit of six years from the end of the relevant assessment years, which was time-barred. The counsel also submitted that the assessee was informed of the proceedings through a telephone call, and notices were allegedly handed to an employee without proof of proper service.
The counsel contended that even if the date of handing over the notices was considered, the assessee was not given the mandatory 30 days to respond, and the AO proceeded with the assessment under Section 144, violating principles of natural justice.
The Counsel for the Revenue argued that there was a dispute regarding the assessee’s status as an Association of Persons (AOP) or an entity eligible for exemption under Section 10(23A) due to its PAN classification as AOP.
The two-member bench comprising S. Rifaur Rahman (Accountant Member) and Anubhav Sharma (Judicial Member), observed that the above contention of the Revenue was irrelevant when NFAC, as the First Appellate Authority with coterminous powers, failed to adjudicate the critical issue of jurisdiction raised by the assessee.
The Tribunal observed that the assumption of jurisdiction was substantially challenged due to non-service of notices, and the NFAC’s decision to restore the matter to the AO without addressing this issue was erroneous.
The Tribunal directed the NFAC to decide the jurisdictional and legal grounds raised by the assessee within three months of receiving the order. The AO was instructed not to proceed with the assessments. The appeals of the assessee were allowed for statistical purposes.
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