ITAT Ahmedabad Quashes Appeal Dismissal Based on Procedural Error, Directs Fresh Adjudication on Merits
Case Overview
In a significant ruling emphasizing substance over form, the Income Tax Appellate Tribunal, Ahmedabad Bench, addressed a matter concerning the inappropriate dismissal of an appeal by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre. The case of Jayshree Narendra Amin Vs ITO brought to light critical concerns regarding the mechanical approach adopted by appellate authorities while disposing of taxpayer appeals.
The assessee approached the Tribunal seeking relief against an order issued on 11 September 2025 by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, pertaining to Assessment Year 2018–19. The core dispute revolved around the computation of fair market value of an immovable property acquired by the assessee, which had implications under section 56(2)(x) of the Income-tax Act, 1961.
Background and Facts
The controversy originated from an assessment proceeding wherein the Assessing Officer made additions to the assessee's income by invoking the provisions of section 56(2)(x) of the Income-tax Act, 1961. This provision deals with the taxation of income arising from the receipt of property without adequate consideration or at a value lower than the fair market value.
Following the assessment order, the assessee exercised the statutory right of appeal before the Commissioner of Income Tax (Appeals). While preparing Form No. 35, which is the prescribed format for filing appeals before the first appellate authority, a typographical mistake occurred. The assessee erroneously indicated that the appeal was being filed against an order passed under section 143(1) of the Act, whereas the actual order under challenge was passed under section 143(3) of the Act.
This distinction is procedurally significant, as section 143(1) pertains to summary assessments involving processing of returns, while section 143(3) relates to scrutiny assessments conducted after detailed examination. However, in the context of the present case, this error was unambiguously a clerical slip that did not affect the substance of the appeal or the grounds raised therein.
Approach Adopted by the Commissioner (Appeals)
Upon examination of the impugned order passed by the Commissioner (Appeals), the Tribunal made several critical observations. The appellate authority had undertaken the exercise of reproducing the complete factual matrix of the case in the order. Furthermore, the Commissioner (Appeals) had also documented all the grounds of appeal that were raised by the assessee challenging the assessment order.
More significantly, the Commissioner (Appeals) had even recorded the detailed submissions made by the assessee on each individual ground of appeal. This demonstrated that the appellate authority had received all the necessary material and information required to adjudicate the appeal on its merits.
Despite having undertaken this elaborate exercise of recording facts, grounds, and submissions, the Commissioner (Appeals) chose to dismiss the entire appeal summarily. The sole basis for this dismissal was the clerical error in Form No. 35, wherein section 143(1) was mentioned instead of section 143(3).
Tribunal's Analysis and Findings
The Tribunal conducted a comprehensive review of the appellate order and expressed serious concern regarding the approach adopted by the Commissioner (Appeals). The Bench observed that the error committed in mentioning the incorrect section number was manifestly a clerical mistake of a technical nature, which had no bearing whatsoever on the substantive grounds of appeal.
Nature of the Error
The Tribunal categorically held that the mistake in the appeal form was purely clerical and inadvertent. There was no ambiguity regarding which order was being challenged, as the order date, assessment year, and all other relevant details were correctly mentioned. The only discrepancy was in citing section 143(1) instead of section 143(3), which was evidently a typographical slip.