National Faceless Appeal Centre is bound to follow decision of HC having jurisdiction over AO: Agra ITAT

 

Mahadev Cold Storage v. AO – [2021] 127 taxmann.com 722 (Agra – Trib.)

 

Short Overview:

 

Assessee was engaged in the business of storage of potatoes in cold storage. Assessing Officer (AO) while processing the return made disallowance of employees’ contribution to the PF/ESI which assessee did not deposit with the PF Department/ESI Department within due date prescribed under the PF Act/ESI Act.

Against the order of AO, assessee preferred an appeal before the CIT(A), National Faceless Appeal Centre (NFAC). NFAC also confirmed the order of AO.

 Aggrieved-assessee filed the instant appeal before the Tribunal.

Assessee contended that the order passed by NFAC was contrary to the law laid down by Jurisdictional High Court.

 It had not considered the binding decision of the jurisdictional High Court and passed the order.

Therefore, the order passed by the NFAC was required to be set aside.

The Agra ITAT held that from the reading of the order it is abundantly clear that the NFAC, had relied upon the decision of Gujarat High Court to dismiss the appeal of the assessee and ignored the binding decision of the Jurisdictional Allahabad High Court.

The approach of the NFAC was not correct and was against the scheme of the notification issued by the Board for creating the centralized NFAC and also against the settled principle of precedent.

Though the centralized NFAC was created, however, it should be ensured that whenever any appellate order is passed, the decision of jurisdictional High Court having jurisdiction over the assessing officer should be followed and applied by the NFAC.

Thus, in the instant case, NFAC was bound by the binding decision of the Jurisdictional Allahabad High Court, as the assessing officer was situated, within the territorial and subjective jurisdiction of the High court.