AMJAD SATHARKHAN KHAN,BANGALORE vs. DCIT, CIRCLE 7(1)(1), BANGALORE

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ITA 2349/BANG/2025Status: DisposedITAT Bangalore07 September 2026AY 2018-196 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in the first appeal, subject to a cost, and restored the matter to the CIT(A) for adjudication on merits. For the second appeal, the Tribunal also restored the matter to the CIT(A) for fresh adjudication, subject to a cost, to grant one more opportunity.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed in limine due to a 92-day delay, without adjudicating on merits. The assessee's explanation for the delay varied between medical grounds and lack of professional guidance. For the second appeal, the assessee failed to properly pursue the appeal before the CIT(A).

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal in limine due to delay without deciding on merits, and whether the assessee should be granted another opportunity in the second appeal.

Which sections of the Income-tax Act were involved?

Section 250,Section 147,Section 144,Section 69,Section 69A,Section 139,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SANDEEP SINGH KARHAIL

For Respondent: Shri. Balusamy. H, JCIT

PER SHRI WASEEM AHMED, ACCOUNTANT MEMBER: ITA 2346 Amjad Khan AY 2016-17 This appeal has been instituted by the Assessee against the order of the Learned Commissioner of Income Tax Appeal (In short “Ld. CIT(A)”) passed under section 250 of the Income Tax Act (In short “Act”) dated 26.08.2025.

2.

At the outset, we note that the AO passed the assessment order u/s 147 r.w.s 144 of the Act by making the following additions:

Sl. Nature of addition Section Amount No. 1 Unexplained investment in u/s 69 Rs. immovable property of the Act 92,50,000 2 Unexplained cash deposits in u/s 69A Rs. bank accounts of the Act 68,83,829 3 Estimated business income at Business Rs. 10% of current account credits of income 59,866 M/s GMRD Enterprises Total income assessed Rs. 1,61,93,695

3.

Aggrieved by the order of the AO, the Assessee filed an appeal before the Ld. CIT(A). However, the Ld. CIT(A) dismissed the appeal of Assessee in limine as the appeal was filed with a delay of 92 days by the Assessee, without adjudicating the grounds on merits.

4.

Aggrieved by the order of the Ld. CIT(A), the Assessee filed an appeal before us and submitted that he could not file the appeal within the prescribed time due to the fact that he approached various professionals for proper assistance. However, due to lack of proper guidance and unprofessional conduct on their part, the Assessee could not take timely steps. The delay was not voluntary or intentional. The Assessee was serious about the proceedings and did not gain anything by filing the appeal late. Therefore, the delay deserves to be condoned in the interest of substantial justice.

5.

The Ld. DR, on the contrary, submitted that the Assessee had taken inconsistent stands for explaining the delay. Before the Ld. CIT(A), the Assessee relied upon medical grounds and filed a medical certificate. However, before the Tribunal, the Assessee has now taken a different plea that he could not act in time due to improper guidance and unprofessional conduct of the professionals approached by him. This change in stand clearly shows that the explanation is an afterthought and is not supported by proper evidence. Therefore, the Ld. CIT(A) was justified in refusing to condone the delay.

6.

We have heard the rival submissions of both the parties and perused the materials available on record. The limited issue before us is whether the Ld. CIT(A) was justified in refusing to condone the delay of 92 days in filing the appeal and dismissing the appeal in limine without adjudicating the grounds on merits.

6.1 At the outset, we are not satisfied with the manner in which the Assessee has conducted himself. The Assessee did not file the return of income either u/s 139 of the Act or in response to notice u/s 148 of the Act. The Assessee also did not properly comply with the notices issued during the reassessment proceedings. Even while explaining the delay, the stand of the Assessee is not very consistent. Before the Ld. CIT(A), the Assessee relied upon medical reasons. Before us, the Assessee has also pleaded lack of proper professional assistance and unavoidable circumstances. This shows that the Assessee was not diligent in pursuing his remedies. Such conduct cannot be approved by us.

6.2 Having said that, we are also of the view that the Ld. CIT(A) was not justified in dismissing the appeal in limine without deciding the matter on merits. The delay was 92 days. It was not such a long delay which could justify denial of the first appellate remedy altogether. The additions made by the Ld. AO are substantial. The assessment was completed ex parte. The Assessee has challenged the addition made u/s 69 of the Act in respect of immovable property and the addition made u/s 69A of the Act in respect of cash deposits. These issues require examination on facts. The Assessee has claimed that the property was purchased out of housing loan and that the cash deposits were sourced from withdrawals and business receipts. These facts were required to be verified by the Ld. CIT(A) on merits.

6.3 In our view, the Ld. CIT(A) should have adopted a balanced approach. The Assessee deserved criticism for his casual conduct. At the same time, the appeal should not have been thrown out at the threshold when substantial additions were involved, and the Assessee was seeking an opportunity to explain the source of investment and deposits. The object of appellate proceedings is to decide the real dispute between the parties. Technical delay should not defeat substantial justice, particularly when the delay can be compensated by imposing cost.

6.4 Therefore, considering the totality of facts, we condone the delay subject to payment of cost of Rs. 1,000 to the PM National Relief Fund. The Assessee shall furnish proof of payment before the Ld. CIT(A). The order of the Ld. CIT(A) is set aside. The matter is restored to the file of the Ld. CIT(A) for deciding the appeal on merits in accordance with law.

6.5 The Ld. CIT(A) shall specifically examine the Assessee’s claim that the investment in immovable property was made out of housing loan obtained from Bangalore City Co-operative Bank. The Ld. CIT(A) shall also verify the bank statements, cash withdrawals, cash deposits, availability of cash in hand, business receipts from timber scrap business, and other supporting evidence to be filed by the Assessee. While examining the addition towards cash deposits, the Ld. CIT(A) shall consider the theory of peak credit and give proper set-off for earlier withdrawals and explained deposits, wherever the same is supported by evidence. The Ld. CIT(A) shall thereafter pass a speaking order on all issues. The Assessee is directed to file all necessary evidence and proof of payment of cost of Rs. 1,000 to the PM National Relief Fund before the Ld. CIT(A), and shall not seek unnecessary adjournments.

6.6 We make it clear that we have not expressed any opinion on the merits of the addition. All the contentions are left open for consideration by the Ld. CIT(A). Accordingly, the grounds raised by the Assessee are allowed for statistical purposes.

8 In the result, the appeal of the Assessee is allowed for statistical purposes.

Coming to ITA No. 2349/Bang/2025, an appeal filed by the Assessee for the AY 2018-19

9.

At the outset, we note that the assessee did not properly pursue the appeal before the Ld. CIT(A). The Ld. CIT(A), therefore, decided the matter against the assessee. Before us, the Ld. AR submitted that the assessee may be granted one more opportunity to place the relevant facts and documents before the Ld. CIT(A). It was submitted that the matter may be restored to the file of the Ld. CIT(A) for fresh adjudication.

10.

The Ld. DR, on the contrary, opposed the prayer of the assessee. He submitted that the assessee was not diligent before the Ld. CIT(A). Therefore, the order of the Ld. CIT(A) does not call for any interference.

11.

We have considered the rival submissions of both the parties and perused the materials available on record. It is true that the assessee has not acted with due care. The assessee ought to have appeared before the Ld. CIT(A) and placed all relevant material in support of his case. Such casual conduct cannot be approved.

11.1 However, considering that the matter relates to penalty proceedings, we are of the view that one more opportunity may be granted to the assessee in the interest of justice. At the same time, the assessee cannot be permitted to take the appellate proceedings lightly. Therefore, to balance the equities, we restore the matter to the file of the Ld. CIT(A), subject to payment of cost of Rs. 1,000 to the PM National Relief Fund.

11.2 Accordingly, the order of the Ld. CIT(A) is set aside. The matter is restored to the file of the Ld. CIT(A) for fresh adjudication in accordance with law. The Ld. CIT(A) shall provide reasonable opportunity of being heard to the assessee. The assessee shall furnish proof of payment of cost of Rs. 1,000 to the PM National Relief Fund before the Ld. CIT(A). The assessee is also directed to file all necessary documents and cooperate in the proceedings without seeking unnecessary adjournments. Accordingly, the penalty appeal is allowed for statistical purposes.

12.

In the result, the appeal of assessee is allowed for statistical purposes.

13.

In the combined result, both the appeals of assessee are allowed for statistical purposes.

Order pronounced in the open court on 7th Sept. 2026

Sd/- Sd/- SANDEEP SINGH KARHAIL WASEEM AHMED JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore Dated: 7th Sept. 2026 Vms Copy to: AMJAD SATHARKHAN KHAN, NO.16 BHARATH TIMBER & FURNITURE, B.G. ROAD NEW 1 GURAPPANAPALYA, BANGALORE, INDIA, BENGALURU-560029, KARNATAKA KAR-W-(131)(92), BMTC BUILDING, KORAMANGALA 2 CIRCLE 7(1)(1), BANGALORE, BENGALURU-560095, KARNATAKA 3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH 5 GUARD FILE By Order

ASSISTANT REGISTRAR / I.T.A.T., BANGALORE

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