GANDLA LAKSHMANA CHETTY,CMP CENTER, AUSTIN TOWN vs. ITO WARD 3(3)(1), HMT BUILDING, BANGALORE

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ITA 1658/BANG/2026Status: DisposedITAT Bangalore30 June 2026AY 2020-216 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee had provided documents to support his income from salary, pension, and loans. Considering the assessee's circumstances and the evidence, the Tribunal decided the appeal on merits.

What were the facts?

The assessee, an ex-Army sepoy injured in service, failed to file his return of income. The AO made additions to his income based on bank credits and salary, and the CIT(A) dismissed the appeal for non-prosecution due to the assessee's ill health.

What were the issues?

Whether additions made by the AO were justified, and whether the CIT(A) erred in dismissing the appeal for non-prosecution without considering the merits of the case.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 142(1),Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH : BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.

For Appellant: Shri B.S. Balachandran, Advocate, Shri Ganesh R Ghale, Standing

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

BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

ITA No. 1658/Bang/2026 Assessment Year : 2020-21

Shri Gandla Lakshmana Chetty, 1st Floor, 133/13, The Income Tax Balwant line, Officer, Jco mess line CMP Center, Ward – 3(3)(1), Austin Town, Bengaluru. Bangalore – 560 047. Vs. PAN: AMYPC7239F APPELLANT RESPONDENT

Assessee by : Shri B.S. Balachandran, Advocate : Shri Ganesh R Ghale, Standing Revenue by Counsel for the Dept. Date of Hearing : 10-06-2026 Date of Pronouncement : 30-06-2026 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 10/03/2026 in respect of the A.Y. 2020-21.

2.

The brief facts of the case are that the assessee is an individual and worked as sepoy in the Indian Army and he was asked to go on retirement because of his injury in spinal cord while in service. In view of above said, he was not able to file his return of income. The AO based on the information that the assessee had substantial income, had issued notice u/s. 148A(b) of the Act and an order u/s. 148A(d) was passed. Notice u/s.

Page 2 of 6 ITA No. 1658/Bang/2026 148 was also issued. The assessee had not filed his return of income to the notice issued u/s. 148 of the Act. Thereafter notice u/s. 142(1) was issued for which the assessee filed his reply and also submitted documents. The AO based on the documents filed by the assessee and the credits made into his SBI accounts had made additions under the head Salary and 69A of the Act since the assessee had not filed any reply to the show cause notice.

3.

The assessee challenged the said order before the Ld.CIT(A) and also filed documents. In view of his ill health, he has not followed up the appeal proceedings and therefore the Ld.CIT(A) had dismissed the appeal for non- prosecution.

4.

As against the said order, the present appeal has been filed by the assessee before this Tribunal.

5.

At the time of hearing, the Ld.AR submitted that the ex-parte order of the Ld.CIT(A) is not correct since the same has been passed without considering the documents filed along with Form 35. The Ld.AR further submitted that the AO as well as the Ld.CIT(A) had not considered the fact that the assessee is an ex-Army person and discharged from the service because of the injury suffered while in service and all his incomes are properly supported with documents. The Ld.AR also submitted the PAN card details of the persons from whom the assessee received loans and therefore prayed that the appeal may be allowed.

6.

The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.

7.

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

8.

The fact remains that the assessee is an ex-Army person and received income by way of salary and pension. He was discharged from Army

Page 3 of 6 ITA No. 1658/Bang/2026 because of the spinal cord injury. Before the AO as well as the Ld.CIT(A), the assessee had filed documents about his income. The assessee could not be able to follow up the issue with the AO as well as the Ld.CIT(A) in view of his injury and the treatments. Anyhow we found that the assessee had submitted documents before the Ld.CIT(A) along with Form 35 but the Ld.CIT(A) without considering the details, had passed an ex-parte order.

9.

We find both the authorities had not considered the issue in detail. In fact, the documents placed before the Ld.CIT(A) as well as before us would establishes the fact that there is no case for making any addition. Further, the copy of the statement of income and the copy of the Aadhaar and PAN of Shri S. Krishnamurthy & Shri S. Ghosh Pasha would indicate that there is no scope for making addition. Even though the Ld.CIT(A) had passed an ex- parte order, considering the fact that the assessee is an ex-Army sepoy and also suffered injuries while he was in service and also discharged from service, we ourselves had considered the documents and decided the appeal on merits.

10.

We have also considered the written submissions filed by the assessee along with the supporting documents which are as follows: “I. Submissions with regard to addition of Rs. 6,47,633/- Amounts considered by the AO on the above addition are two components as per the AO one is salary of Rs. 6,14,595 and pension of Rs. 83,038 totalling to Rs. 6,97,633 less Standard deduction of Rs. 50,000/- come to Rs. 6,47,633. This amount is added in the Income from salary which is wrong since the form No. 16 and bank statements as stated by AO and enclosed by the appellant during the course of assessment proceedings the total salary plus pension for the year comes to Rs. 5,64,595/- which is correct as per Form 16 issued by the Employer and the same is annexed at page 37 of the appeal paper book. The gross salary adopted by the employer is Rs. 5,64,595/- which is after deduction of Rs. 50000/- towards standard deduction. Hence the gross salary income to be assessed is Rs. 5,64,595/- and not Rs. 6,47,633/- as per Assessment order. The Employer had deducted TDS of Rs. 17,156/- on the net salary income of Rs. 5,19,980/- was under belief that

Page 4 of 6 ITA No. 1658/Bang/2026 return of income need not be filed since tax was already deducted on the income earned. (Copy of Statement of Income enclosed as Annexure – 1). II. Submissions with regard to total addition of Rs. 17,01,665/- The above addition of Rs. 17,01,665/- which AO in his order has given the details of amount of addition on each credits in the bank made on different dates as per the bank statement and the same is reflected in the page 65 of appeal paper book of the AO’s order. a) First addition of Rs. 2,98,000/- The above amount has been credited in the bank account of the appellant which is loan taken from the relative Sri. Krishnamurthy Retired School Teacher of the appellant when the appellant was dire need of the money for his family to run the day today expenses and other expenses, when the appellant was bedridden due to injury to his spinal cord. The PAN card copy and Aadhar card copy was submitted before the CIT (A) wherein CIT has no time to look into it when the appeal order was passed. Hence request the honorable ITAT to delete the addition made when the details of creditor is furnished by the appellant. b) Second addition of Rs.7,00,000/- The above amount is loan received from the bank by the appellant and the same is reflected in the Loan statement enclosed at page 45 of the appeal paper book. This loan statement was also filed before the CIT (A) and CIT (A) has not gone through the same and has passed the order on merits and dismissed on non- prosecution. Hence request the honorable ITAT to delete the addition made by the AO. c) Third addition of Rs.1,39,186/- The above amount has been included in the gross salary and its part of salary of the appellant. As stated supra the gross salary of Rs.5,64,595/- the amount of Rs.1,39,186 is included and it is shown in the salary statement vide page 48 of appeal paper book and the same should be deleted by the honorable ITAT since the addition made twice. d) Fourth addition of Rs.3,77,989/- The above amount has been included in the gross salary and its part of salary of the appellant. As stated supra the gross salary of Rs.5,64,595/- the amount of Rs.3,77,989/ is included and it is shown in the salary

Page 5 of 6 ITA No. 1658/Bang/2026 statement vide page 51 of the appeal paper book and the same should be deleted by the honorable ITAT since the addition made twice. e) Fifth addition of Rs.65,986/- The amount of Rs.65,986/- pertains to Armed Forces Personnel Provident fund including interest and the same has been received through bank on 01/01/2020 post retirement. The amount of Rs.65,986/- is also shown in the salary details of appellant on page 51 of the appeal paper book. The total amount is exempted from income tax since it is provident fund received as retirement benefits. Hence request the honorable ITAT to delete the addition made. f) Six addition of Rs.1,20,000/- The above amount is also loan taken from the appellant's friend one Mr.Ghosh Pasha and the PAN and Aadhar card copies filed before the CIT (A) but CIT(A) has not gone through the documents filed before me and has dismissed for non-prosecution.”

11.

Considering the said submissions and the documents furnished by the assessee which are all produced before the authorities, we are satisfied that the assessee had proper source for the deposits, income from salary and pension and the other credits. Therefore, in the interest of justice, instead of remitting this issue to the AO, we are allowing this appeal by deleting the additions made by the AO.

12.

In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 30th June, 2026.

Sd/- Sd/- (WASEEM AHMED) (SOUNDARARAJAN K.) Accountant Member Judicial Member

Bangalore, Dated, the 30th June, 2026. /MS /

Page 6 of 6 ITA No. 1658/Bang/2026 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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