Vinodchandra Dahyabhai Darji Vs ITO (ITAT Ahmedabad)
In the case of Vinodchandra Dahyabhai Darji vs. ITO, the Income Tax Appellate Tribunal (ITAT) Ahmedabad addressed an appeal regarding additions made during the assessment year 2017-18. The Assessee, a wholesale trader of Parle Biscuits Ltd. products with a turnover of ₹3.95 crores, contested the addition of ₹73,22,598 to their income. The addition included an estimation of profits at 8% of gross turnover and ₹41,70,500 categorized as unsecured loans under Section 68 of the Income Tax Act. The Assessee argued that these additions violated principles of natural justice, as the Commissioner of Income Tax (Appeals) [CIT(A)] made decisions without granting the Assessee an opportunity for a hearing.
ITAT found merit in the Assessee’s claims, particularly regarding the denial of a hearing via video conferencing under the faceless appeal mechanism. ITAT noted that such an opportunity is mandatory under the current faceless framework. Consequently, the Tribunal remanded the case to CIT(A) for fresh adjudication. The revised proceedings are to consider the Assessee’s submissions and ensure compliance with procedural fairness. ITAT also directed the Assessee to provide proof of a ₹5,000 payment to the Prime Minister’s National Relief Fund, emphasizing a collaborative resolution.
This decision highlights procedural lapses in faceless appeal systems and emphasizes the need to uphold the right to be heard, ensuring tax assessments are both fair and lawful. The case has been allowed for statistical purposes, underscoring ITAT’s focus on due process over immediate resolution.
