Airona Tiles Limited Vs DCIT (ITAT Ahmedabad)
In a ruling emphasizing the foundational principles of natural justice within the faceless assessment regime, the Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench has set aside an order by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The ITAT’s decision, pronounced on March 20, 2025, restores the appeal of Airona Tiles Limited for fresh consideration, citing a violation of due process when the NFAC dismissed the company’s appeal ex-parte without considering its requests for adjournment.
The case, Airona Tiles Limited Vs DCIT, pertained to the Assessment Year (AY) 2016-17 and challenged the assessment order dated December 21, 2018, passed by the Deputy/Assistant Commissioner of Income Tax (DCIT/ACIT), Circle Himatnagar.
Background: Assessment and Disputed Additions
Airona Tiles Limited, engaged in the manufacturing and sale of ceramic glazed tiles, had filed its return of income on October 17, 2016, declaring a total income of Rs. 62,63,380/-. While the return was initially processed under Section 143(1) of the Income Tax Act, 1961, the case was subsequently selected for complete scrutiny. Notices under Section 143(2) and 142(1) of the Act were issued and reportedly served.
During the assessment proceedings, the Assessing Officer (AO) made several additions to the company’s income, totaling Rs. 16,36,864/-, thereby assessing the income at Rs. 79,00,240/-. A key procedural flaw highlighted by the assessee was the AO’s failure to issue a specific show cause notice regarding these proposed additions, potentially denying Airona Tiles an opportunity to respond before the additions were finalized.
