Faceless Assessment & Appeals

Faceless Assessment & Appeals — the law in short

Every authority in this library on faceless assessment & appeals, with what each one decided.

• ITO v Tej Partap Singh Supreme CourtCuts both ways
  The High Court quashed my s.148 notice because the ward officer issued it instead of the faceless unit. Does that judgment still stand?
  No, not as it stands. On 10 April 2026 the Supreme Court set aside the High Court judgments that had quashed notices issued by the jurisdictional Assessing Officer, because s.147A, inserted by the Finance Act 2026 with effect from 1 April 2021, now defines the Assessing Officer for ss.148 and 148A as an officer other than the National Faceless Assessment Centre and the assessment units in s.144B(3). The Court remitted the matters, left the validity, scope, effect, retrospectivity and applicability of s.147A open for the High Courts, and stayed further assessment and reassessment proceedings in the meantime.
• NFAC v Automotive Manufacturers P Ltd Supreme CourtCuts both waysValidity unconfirmed
  The faceless order came without any show-cause notice or draft order. Will it just be annulled?
  No — expect a remand. The Supreme Court accepted that making a variation without serving the show-cause notice and draft assessment order breached s.144B and the principles of natural justice, but held the High Court should have sent the matter back to the Assessing Officer for a fresh order rather than simply setting the assessment aside.
• Tin Box Company v CIT Supreme CourtHelps taxpayer
  The AO never heard me but the CIT(A) did. Does the appeal cure the defect?
  No. Failure to follow the principles of natural justice at the assessment stage cannot be made good in an appeal. Once it is found that the officer did not give the assessee a proper opportunity of hearing, the assessment order is to be set aside and the matter remanded to the officer for a fresh assessment after a proper opportunity.
• High Vista Buildcon P Ltd v NFAC High CourtHelps taxpayerValidity unconfirmed
  I asked NFAC for a video hearing in my appeal and never got a link. Can that order stand?
  No. A virtual hearing is mandatory once it is specifically requested in faceless appellate proceedings, and passing the appellate order without ever providing the video-conference link violated natural justice. The order was set aside, the appeal restored for a proper virtual hearing, and the consequential penalty orders under ss.271AAC(1) and 270A were quashed with it.
• BVR Projects v Assessment Unit High CourtHelps taxpayerValidity unconfirmed
  The faceless show-cause notice gave me four days to reply. Is that enough time?
  No. The CBDT's Standard Operating Procedure of 3 August 2022 for faceless assessment requires seven days to answer a show-cause notice. A notice issued on a Saturday with a deadline at 1.02 p.m. the following Friday gave four working days to respond to a proposed addition of over Rs. 5.22 crores, and the assessment order was set aside on that ground alone.
• Synokem Pharmaceuticals Ltd v ACIT High CourtHelps departmentValidity unconfirmed
  The Supreme Court remitted my JAO reassessment case and gave four weeks to amend. Will the High Court actually let me amend to challenge s.147A?
  Not as of right. The Delhi High Court refused. Delhi had already held in T.K.S. Builder Pvt. Ltd. that the Faceless Assessing Officer and the Jurisdictional Assessing Officer have concurrent jurisdiction, so s.147A took nothing away from this petitioner; the writ petition had in any event already been dismissed. The court held that whatever little remained to be argued had been washed away by the amendment and rejected the amendment application as misconceived.
• Vijaya Agro Traders v ITO High CourtHelps taxpayerValidity unconfirmed
  The faceless unit has disallowed my purchases for not deducting under s.194Q and has said nothing at all about the Board's circular I quoted in my reply. Is that enough to get the order set aside?
  Yes. The Karnataka High Court set aside an order under s.143(3) read with s.144B, made in a s.194Q scrutiny, on the single ground that CBDT Circular No. 13/2021 had not been considered or appreciated by the assessing unit, and remitted the matter for fresh consideration in the light of that circular. Guidelines issued under s.194Q(3) are issued with the approval of the Central Government and the officer is not free to pass over them in silence.
• Arris Estates P Ltd v Assessment Unit High CourtHelps taxpayerValidity unconfirmed
  The Department admits it refused the video hearing but says limitation was about to expire. Is that a defence?
  No. The Gujarat High Court quashed an assessment where the request for a video conference hearing made on 4 March 2024 was not granted and the order followed on 15 March 2024, rejecting the plea that earlier adjournments had left the Department no time before the 31 March deadline.
• T.K.S. Builders P Ltd v ITO High CourtHelps department
  Can the jurisdictional AO issue my s.148 notice, or must reassessment go through the faceless route?
  On this line of authority he can. The Delhi High Court held that the JAO and the faceless assessing officer have concurrent jurisdiction, that the Scheme notified under s.151A does not extinguish the JAO's power to issue notices under ss.148 and 148A, and that s.144B is procedural and is not itself a source of the power to assess or reassess.
• Jatinder Singh Bhangu v Union of India High CourtHelps taxpayerHigh Courts differ
  My reassessment notice under section 148 came from my own jurisdictional assessing officer, not through the faceless system. Is that notice good?
  No. The Punjab and Haryana High Court quashed section 148 notices issued by the Jurisdictional Assessing Officer, holding they contravene section 151A read with section 144B and the e-Assessment of Income Escaping Assessment Scheme, 2022 notified on 29 March 2022. Clause 3(b) of the scheme requires issuance of a section 148 notice through automated allocation and in a faceless manner. The Department's reliance on a CBDT office memorandum of 20 February 2023 and a Systems Directorate letter of 19 January 2024 failed: instructions and circulars can supplement but cannot supplant statutory provisions. Liberty was given to proceed in accordance with law.
• Hexaware Technologies Ltd v ACIT High CourtHelps taxpayerPartly overruled — read this first
  Your s.148 notice came from your own local officer, not from the faceless unit. Does that matter?
  In Bombay, yes. After the CBDT scheme notified under s.151A on 29 March 2022, only a Faceless Assessing Officer acting through automated allocation can issue a reassessment notice. There is no concurrent jurisdiction, and a notice from the jurisdictional officer was quashed.
• Satish Kumar Bansal HUF v NFAC High CourtHelps taxpayerValidity unconfirmed
  I asked for a personal hearing in my faceless assessment and never got one. Is the order bad?
  Yes. Allahabad held that once a request is made under s.144B(6)(vii), granting the hearing is mandatory and not discretionary; fixing the rescheduled hearing on a Sunday, the day after the adjournment application, was not a real opportunity.
• Kankanala Ravindra Reddy v ITO High CourtHelps taxpayerHigh Courts differ
  My section 148A(d) order and section 148 notice came from the local assessing officer after the 2022 faceless schemes started. Can I have them quashed on that ground alone?
  Yes. The Telangana High Court quashed the section 148A(d) orders and the consequential section 148 notices in a batch of over fifty writ petitions because they were issued by the local jurisdictional officer and not in the faceless manner required by section 151A read with section 144B and the two CBDT schemes of 28 and 29 March 2022. Where a statute requires a thing to be done in a particular manner, it must be done in that manner or not at all. The Department had also ignored the Supreme Court's direction in Ashish Agarwal to proceed under the substituted provisions. The consequential orders fell with the notices.
• GE Oil & Gas India P Ltd v Addl/Jt/Dy/Asst CIT High CourtCuts both waysValidity unconfirmed
  You are an eligible assessee with a transfer pricing adjustment and the faceless unit passed a final order instead of a draft. What relief will the court give?
  The order goes, but not always as a clean quashing. The Madras High Court set aside a final order passed three days after the show cause notice cum draft assessment order and directed that the impugned order be treated as a draft assessment order, leaving the assessee to work out its remedies against it under s.144B.
• Virdichand Bawandas HUF v National e-Assessment Centre High CourtHelps taxpayer
  You asked for time to reply to the draft order and were refused. Is the final order safe?
  No. The scheme requires an opportunity to respond to the modifications proposed in the draft order. Refusing time and then finalising was held wrong, and the assessment and the penalty notice were set aside.
• Symphony Limited v ACIT High CourtHelps taxpayerValidity unconfirmed
  The faceless unit finalised your assessment without issuing a draft order. Is that order good?
  No. Under s.144B, a show cause notice issued along with the draft assessment order is a sine qua non. Without it the final order was passed without jurisdiction and was quashed.
• Bharat Aluminium Company Ltd v Union of India High CourtHelps taxpayer
  I asked for a personal hearing in the faceless assessment and was refused. Does the order survive?
  No. The Court read 'may' in s.144B(7)(viii) as 'must': once the assessee asks for a personal hearing it has to be given, because a power carrying civil consequences attracts the rules of natural justice unless the statute excludes them, and s.144B embeds rather than excludes them. The assessment order and demand notice were set aside for a fresh reasoned order after hearing.
• Mantra Industries Ltd v NFAC High CourtHelps taxpayerSuperseded by amendment
  The faceless order says I filed no reply when I did, and my hearing request was ignored. Is it valid?
  It was set aside. The final order reproduced the draft order word for word apart from one sentence, recorded that no response had been filed when two replies were on the record, and ignored the requests for adjournment and personal hearing — so it was held non est under s.144B(9) as it then stood. The Court warned that costs would be recovered from the Assessing Officer personally and entered in the service record if it recurred.
• Gandhi Realty (India) P Ltd v Asst/Jt/Dy CIT High CourtHelps taxpayerSuperseded by amendment
  The Department says it issued a draft assessment order, but nothing appeared on the portal. Who has to prove service?
  The Department does. Where the Revenue claimed a draft assessment order had been placed and served but nothing was traceable on the portal, the Gujarat High Court quashed the assessment. Every step of s.144B has to be treated with the same seriousness, because s.144B(9), as it then stood and before its retrospective omission, made a non-compliant assessment non est.
• Trendsutra Client Services P Ltd v ACIT High CourtHelps taxpayerSuperseded by amendment
  The faceless order made additions but no show cause notice or draft order ever came. What is the order worth?
  Nothing. Where the final order varies the returned income to the assessee's prejudice and no show cause notice or draft assessment order was served, the assessment is not made in accordance with s.144B and is non est. The Bombay High Court quashed it outright.
• Piramal Enterprises Ltd v Addl/Jt/Dy/Asst CIT High CourtHelps taxpayerValidity unconfirmed
  You asked for a video hearing after the show cause notice and the order came anyway. Is that fatal?
  Yes. Once you have responded to a show cause notice under s.144B and asked for a personal hearing, the request must be taken into account, and ordinarily it will not be refused. An order passed without dealing with that request is unsustainable, and the fact that a further remedy exists later in the process does not cure it.
• Sanjay Aggarwal v National Faceless Assessment Centre High CourtHelps taxpayerValidity unconfirmed
  You asked for a personal hearing and the faceless unit ignored it. Does 'may' mean they can?
  No. Section 144B(7) uses 'may', but that usage cannot absolve the Revenue of the obligation to consider a request for a personal hearing. The assessment order was set aside.
• SHL (India) v DCIT High CourtCuts both ways
  If the Assessing Officer passes a final assessment order on an eligible assessee without first issuing a draft order, can s.292B save it?
  After a transfer pricing adjustment was proposed, the Assessing Officer passed a final order under s.143(3) without first forwarding a draft assessment order under s.144C(1). The Bombay High Court quashed the order, the demand notice and the penalty notice as void ab initio, and held that s.292B cannot confer jurisdiction that the officer never had.
• Mohamed Asmi v ITO ITATHelps departmentValidity unconfirmed
  I filed under s.44AD and the officer has still added my whole bank credit under s.69A. Doesn't the presumptive return protect me?
  Not by itself. The Tribunal held that s.44AD and s.69A operate in distinct fields, and that a presumptive return cannot regularise deposits whose source and genuineness the assessee cannot establish; the entire addition of Rs 7,10,37,643 was sustained.
• Jyotsna Kunwar v ITO, Ward 41(1)(1), Mumbai ITATHelps taxpayerValidity unconfirmed
  The Assessing Officer says s.54GB died on 31 March 2017, that the most I can invest is Rs 50 lakh, and that I must invest the whole net consideration. Are any of those right?
  None of them. The proviso to s.54GB(5) substitutes a later date where the investment is in an eligible start-up — for the year before the Tribunal the substituted date was 31 March 2022 — so a transfer after 31 March 2017 is not automatically out. There is no Rs 50 lakh cap anywhere in s.54GB. And where less than the whole net consideration is invested, clauses (a) and (b) of s.54GB(1) give a proportionate exemption, not nil.
• Sahyadri Erectors P Ltd v National e-Assessment Centre ITATHelps taxpayerValidity unconfirmed
  You missed the writ window. Can the Tribunal still strike down an assessment for breach of s.144B?
  Yes. The Mumbai Bench held an assessment void ab initio because the mandatory procedure under s.144B was not followed, no show cause notice or draft assessment order having been issued, and allowed the appeal. The Commissioner (Appeals) had brushed the procedural ground aside without analysing it, and that was held to be wrong.
• Jaya Rinkubhai Bandukwala v ITO, Ward 3(3)(1), Surat ITATCuts both waysValidity unconfirmed
  The Assessing Officer has levied Rs 30,000 under section 272A(1)(d) — Rs 10,000 for each of three notices I did not answer. Can he multiply the penalty like that, and what can I actually get reduced?
  Yes, the section provides a penalty of Rs 10,000 per default and the Assessing Officer may levy one for each unanswered notice; the Surat Bench said so in terms. But section 273B is not all-or-nothing on the facts: finding that reasonable cause existed for some of the defaults and not for others, the Tribunal restricted the total from Rs 30,000 to Rs 10,000.
• Balakumar Anusia v ACIT, International Taxation Circle, Madurai ITATHelps departmentValidity unconfirmed
  My client answered neither the section 143(2) notice nor the section 142(1) notice, and the Assessing Officer has levied Rs 20,000 — Rs 10,000 for each. Is there any answer to that on appeal?
  On these facts, no. Where the assessee simply did not respond to either notice, the Chennai Bench held that the Assessing Officer had rightly levied Rs 10,000 for each default under section 272A(1)(d) and dismissed the appeal — the section's own charging words are 'a sum of ten thousand rupees for each such default or failure'.
• Amit Jain v DCIT, Circle (International Taxation), Jaipur ITATHelps taxpayerValidity unconfirmed
  I asked the Assessing Officer for more time on a section 142(1) notice and then filed the reply within the time I had asked for. He has still levied Rs 10,000 under section 272A(1)(d). Is that sustainable?
  No, on these facts. Where the assessee answered the notice by filing an adjournment request, and the Assessing Officer never rejected that request by a speaking order, the notice was attended to and there is no 'failure to comply' at all — the Tribunal deleted the Rs 10,000 penalty without needing to reach section 273B.
• Hanuman Prasad & Sons v DCIT/ACIT, NFAC ITATHelps taxpayerValidity unconfirmed
  I answered the section 142(1) notice late — after the show-cause notice — but the Assessing Officer used my reply and completed a section 143(3) assessment. Can he still levy Rs 10,000 under section 272A(1)(d)?
  Not on this reasoning. Where the assessee complied, though belatedly, well before the assessment order was framed, and the Assessing Officer considered the reply and the documents in framing a section 143(3) assessment, the Allahabad Bench held the case does not fall in the category of non-compliance at all, and deleted the penalty. It added, independently, that in the first year of the shift from physical to electronic proceedings a delay caused by the change in the mode of communication is bona fide and not deliberate.
• e-Verification Instruction 2(i) of 2024 CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  A compliance campaign message arrived and nothing was done about it. What does the department do next, and does an updated return filed late in the day count for anything?
  It becomes a reopening, and yes, the updated return is credited against the figure. The Directorate of Income Tax (Systems) tells officers that what the e-Verification machinery hands them is "Information" within the statutory list, that they are to invoke s.147 and issue the s.148 notice in those cases, and that the case will sit in one of two buckets - no updated return filed, or an updated return filed during the verification without fully reconciling the mismatch. In the second bucket the amount treated as escaping is reduced by the additional income the assessee has actually shown. Two things must be said on the face of this. The instrument is an internal communication of the Directorate of Income Tax (Systems) which does not appear to have been published as departmental material and could not be traced in a subscription research database; the copy relied on here comes from an unofficial host. And nothing in it dispenses with the s.148A stage.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.