Justice Delayed at NFAC: When Faceless Appeals Become a Digital Black Hole

By CA Surekha                              

The Reality of Faceless Appeals

In Income Tax litigation, “Justice Delayed is Justice Denied” is no longer merely a judicial saying—it is the lived reality of taxpayers.

Since 2021, assessees filing appeals must engage with the National Faceless Appeal Centre (NFAC). Yet, this digital system often functions like a void: submissions vanish, automated notices demand documents already filed, and no hearings or orders are forthcoming. Officials responsible for delays remain unaccountable.

The Principal Chief Commissioner of Income Tax (NFAC) recently acknowledged that the average pendency at the CIT(A)/NFAC level now exceeds five years. This stark figure confirms the institutional backlog and validates the long-standing frustration of taxpayers.

• Average pendency at NFAC exceeds five years.

• Section 250(6A) prescribes a one-year disposal timeline for appeals.

• Delays violate constitutional rights under Article 21.

• Remedies include Writ of Mandamus and administrative priority hearings.

From Administrative Delay to Harassment

Delays have evolved from inconvenience to active hardship:

• Inflated assessments and unsupported additions remain unaddressed

• Recovery proceedings continue despite pending appeals

• Absence of human interface creates a digital black hole, postponing justice indefinitely

Section 250(6A): One-Year Timeline for Appeals

Chapter XX of the Income-tax Act, 1961 governs appeals before the Joint Commissioner (Appeals) or Commissioner (Appeals)—collectively, the First Appellate Authorities (FAA).

The Finance Act, 2023 introduced Section 250(6A):

"In every appeal, the Joint Commissioner (Appeals) or the Commissioner (Appeals), as the case may be, where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him..."

Applicability:

• Appeals originally filed before FAA

• Appeals transferred under Sections 246(2) or 246(3)

• Appeals filed under Section 248A

Legislative intent: Ensure timely disposal, prevent excessive delay, and enforce accountability in appellate proceedings.

Mandatory or Directory? Legal Interpretation

While Section 250(6A) uses discretionary language, courts consistently interpret delays causing prejudice as mandatory.

TV Usman v. Food Inspector, Tellicherry Municipality [JT 1994 (1) SC 260] – even directory provisions become imperative when delay harms the affected party.

Practical impact of NFAC delays:

• Blocks escalation to ITAT

• Triggers recovery proceedings despite pending appeals

• Causes mental and financial stress

• Violates principles of natural justice

Constitutional Perspective: Article 21

Article 21:

"No person shall be deprived of his life or personal liberty except according to procedure established by law."

Supreme Court rulings reinforce that timely justice is a fundamental right:

• Hussainara Khatoon v. State of Bihar [1979 SCR (3) 532] – speedy trial is fundamental

• Imtiaz Ahmad v. State of Uttar Pradesh AIR 2012 SC 642 – undue delay undermines the rule of law

Consequences of NFAC inaction:

• Lingering demands and uncertainty

• Financial stress due to recovery actions

• Reputational harm to businesses and professionals

• Legal stagnation blocking ITAT escalation

Practical Remedies for Assessees

1. Writ of Mandamus (High Court)

• Compels NFAC to perform its statutory duty (Article 226).

• Judicial support: Praga Tools Corporation v. C.A. Immanuel AIR 1969 SC 1306; Samarth Transport Co. v. RTA AIR 1961 SC 93

• Sanjay Kumar Agarwal v. CBDT [2025] 173 taxmann.com 841 (Delhi) – HC directed NFAC to expedite appeals citing Section 250(6A) and CBDT instructions.

2. Administrative Remedy: Priority Hearing

• File representation to Jurisdictional PCIT under CBDT Circular F. No. 279/Misc./M-102/2021-ITJ (19.03.2024)

• Criteria: Demands > ₹1 crore, court-directed cases, senior citizens, or genuine hardship

• Attach submissions, pending demand, prior correspondence

• Authority may recommend priority disposal by NFAC

Impact on Filing Appeals: Forms & Attachments

Due to NFAC delays, the appeal process now requires:

1. Updated forms capturing prior submissions and pending assessments

2. Mandatory attachments: notices, computation sheets, proofs

3. Disclosures: pending appeals, statutory deadlines, priority requests

4. Tracking: unique reference numbers for attachments

5. Tip: Incomplete or misclassified attachments trigger repeated notices, prolonging delays

Conclusion

NFAC’s inaction is not merely administrative failure—it constitutes violation of statutory duty, constitutional rights, and public trust.

Actionable Steps:

• Assert rights under Article 21 and Section 250(6A)

• File writ petitions for pending appeals

• Use administrative priority requests for deserving cases

"The patience of the Indian public is anaesthetised, and it continues to endure injustice and unfairness without any resistance." – Nani Palkhivala

It is time for persistent legal and administrative action—because if the system fails to respond, it must be compelled to act.