NAGALINGA REDDY ANIL,BANGALORE vs. INCOME TAX OFFICER, WARD-4(1)(1), BANGALORE

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ITA 40/BANG/2026Status: DisposedITAT Bangalore22 May 2026AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the 140-day delay in filing the appeal before the CIT(A) due to the assessee's ill health and expired digital signature certificate. The Tribunal set aside the CIT(A)'s order and remitted the issue back for a decision on merits.

What were the facts?

The assessee purchased land jointly for Rs. 6,64,10,000, with the guideline value being Rs. 8,50,00,000. The AO added 50% of the difference as income under Section 56(2)(vii)(b)(ii) and also treated gifts and loans as unexplained cash credit under Section 68 due to lack of evidence. The assessee's appeal to the CIT(A) was dismissed due to a 140-day delay.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned on the grounds of ill health and technical issues. Whether the additions made by the AO under Sections 56(2)(vii)(b)(ii) and 68 are justified.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b)(ii),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI SOUNDARARAJAN K.

For Appellant: Shri Vidhyadhar S.B, Advocate
For Respondent: Shri Subramanian S., JCIT-DR

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE

BEFORE SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

ITA No. 40/Bang/2026 Assessment Year : 2016-17

Shri Nagalinga Reddy Anil, No. 21, 4th Cross, The Income Tax Veerappa Reddy Layout, Officer, Munnekolala, Ward – 4(1)(1), Marathahalli, Bengaluru. Bengaluru – 560 037. Vs. PAN: ANDPA1163G APPELLANT RESPONDENT

Assessee by : Shri Vidhyadhar S.B, Advocate Revenue by : Shri Subramanian S., JCIT-DR

Date of Hearing : 30-04-2026 Date of Pronouncement : 22-05-2026

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 19/12/2025 in respect of the A.Y. 2016-17.

2.

The brief facts of the case are that the assessee is an individual and filed his return of income on 24/10/2016. The AO based on the information that the assessee had jointly purchased the land for a consideration of Rs. 6,64,10,000/- had arrived the guideline value at Rs. 8,50,00,000/-. The

Page 2 of 4 ITA No. 40/Bang/2026 difference in the value has been treated as the value of the property not declared and 50% of the said difference has been added as income from other sources u/s. 56(2)(vii)(b)(ii) of the Act. The AO had issued notices u/s. 148A(b) and thereafter an order u/s. 148A(d) was also passed. Simultaneously, notice u/s. 148 was issued for which the assessee filed a return but the same was not verified and therefore the AO has treated the said return as invalid return. Thereafter notice u/s. 142(1) was issued and the assessee furnished their objections and submitted that the section 56(2)(vii)(b)(ii) would not apply to the facts of the present case. The AO not satisfied with the reply had confirmed the addition u/s. 56(2)(vii)(b)(ii) of the Act. The AO had also sought for the details about the source for the purchase of the said property. The AO also sought for the details about the gift given by his father. Another query was also raised about the unsecured loan. The assessee had not furnished any evidence to explain the source of investment. Therefore the AO had treated the 50% of the investment relates to the assessee and added the gift received from his father and the unsecured loans and the advance received and treated the said amounts as unexplained cash credit u/s. 68 of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A) with a delay of 140 days. The assessee had also enclosed an application to condone the said delay and submitted that he was under medical treatment and advised complete bed rest for 3 months and the digital signature certificate got expired and therefore the appeal could not be filed in time. The Ld.CIT(A) had not accepted the reasons as valid reasons and dismissed the appeal as not maintainable.

3.

As against the said order, the assessee is in appeal before this Tribunal.

4.

At the time of hearing, the Ld.AR submitted that the delay has been occurred in view of the reasons stated in the application but the Ld.CIT(A) had considered the said application and dismissed the same on technicalities and therefore prayed that an opportunity may be granted to

Page 3 of 4 ITA No. 40/Bang/2026 appear before the Ld.CIT(A) for deciding the appeal on merits. The Ld.AR further submitted that, on merits also, the assessee is having a good case and the assessment is also a high pitched assessment and therefore the assessee should be granted an opportunity to explain the facts in detail otherwise the assessee would be in great difficulty.

5.

The Ld.DR submitted that the assessee had not submitted the details before the AO and also filed the appeal beyond the period of limitation and therefore prayed to dismiss the appeal filed by the assessee.

6.

We have heard the arguments of both sides and perused the materials available on record.

7.

In the present case, the AO had made additions on the ground that the assessee had not submitted a single piece of evidence and therefore the addition was made. Before the Ld.CIT(A), the assessee had explained the delay of 140 days and explained that because of his ill health and also because of the expiry of the digital signature certificate, the appeal could not be filed in time. We have considered the said fact and of the view that the assessee will not be get benefitted by filing the appeal belatedly. In fact, it will affect the assessee and therefore in the interest of justice, the issue has to be decided on merits. But unfortunately, the Ld.CIT(A) had not inclined to condone the said delay and therefore the assessee was prevented from arguing their case on merits.

8.

As argued by the Ld.AR, it seems that the assessment is also a high pitched assessment and therefore it should be decided on merits instead of dismissing the appeal on the ground of limitation. Therefore, we are inclined to condone the said delay of 140 days by accepting the reasons given by the assessee as a valid one. We therefore, set aside the order of the Ld.CIT(A) and remit this issue to its file for deciding the issue afresh, after hearing the assessee.

Page 4 of 4 ITA No. 40/Bang/2026 9. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 22nd May, 2026.

Sd/- Sd/- (BALAKRISHNAN S) (SOUNDARARAJAN K.) Accountant Member Judicial Member

Bangalore, Dated, the 22nd May, 2026. /MS /

Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order

Assistant Registrar, ITAT, Bangalore

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