DORANALU PUTTAPPA ARIYAPPA,CHIKAMAGALUR vs. INCOME TAX OFFICER, WARD-1, CHIKAMAGALUR

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ITA 3050/BANG/2025Status: DisposedITAT Bangalore02 July 2026AY 2017-1812 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the significant delay in filing the appeal, citing the assessee's age, illiteracy, and remote location as sufficient cause. The matter was then remitted back to the Assessing Officer for fresh adjudication.

What were the facts?

The assessee, an elderly and illiterate agriculturist, failed to appear before the lower authorities due to lack of knowledge of notices and digital literacy, leading to ex-parte orders. This resulted in a significant delay in filing the appeal before the Tribunal.

What were the issues?

Whether the delay in filing the appeal should be condoned due to the assessee's circumstances, and whether the ex-parte assessment and appellate orders should be set aside due to violation of natural justice.

Which sections of the Income-tax Act were involved?

Section 144,Section 69,Section 115BBE,Section 250,Section 253(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC’’BENCH: BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Ms. Prathiba, Adv. A.R
For Respondent: Shri Ganesh R Ghale, Standing Counsel for the Dept
Hearing: 08.04.2026Pronounced: 02.07.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld.CIT(A)/NFAC dated 9.5.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1064750178(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2017-18.

2.

The assessee has raised the following grounds of appeal:-

1.

“The learned Commissioner of Income Tax (Appeals), NFAC, erred in law and on facts in passing orders which are bad in law, void ab initio, arbitrary, unjustified, and liable to be quashed.

Page 2 of 12 2. The learned CIT(A), NFAC has erred in disposing the appeal ex-parte without providing proper, meaningful, and effective opportunity of being heard, thereby violating the principles of natural justice.

3.

The notices issued by the NFAC were not effectively served or could not be responded due to the assessee being a 75-year-old illiterate agriculturist residing in a remote village, resulting in genuine difficulty in accessing electronic communications. Hence, the ex-parte dismissal is unjustified. 4. The learned Assessing Officer has erred in completing the assessment u/ s 144 without granting the assessee adequate and real opportunity to furnish explanations, documents, or produce evidence. The ex-parte best-judgment assessment deserves to be quashed. 5. The AO failed to consider the facts of the assessee's advanced age, illiteracy, and rural background, which prevented compliance with notices. Therefore, the order is against principles of natural justice. 6. The learned AO has erred in treating the cash deposits of Rs. 12,70,000/- as unexplained investment under section 69 without appreciating that the assessee is a full-time agriculturist owning around 8 acres of agricultural land and is engaged in cultivation of arecanut (areca) for several decades. 7. The AO has failed to appreciate that the assessee's agricultural income is received entirely in cash, the produce is sold locally through areca collecting agents, and the cash was accumulated over years and deposited during the demonetisation period. 8. The AO failed to consider that agricultural income is exempt u/ s 10(1) and the $0urce of cash was fully explainable and supported by the assessee's landholding, crop details and agricultural practices.

9.

The learned AO has erred in not conducting any independent enquiry from local areca agents, village accountants, land records, crop inspectors, or other material sources which would have clearly established the assessee's agricultural activities and income. 10. The addition of Rs. 12,70,000/- is arbitrary, excessive and made without any basis or evidence. The AO has not established: Any incriminating material indicating undisclosed income, Any defect in the assessee's explanation, Any contrary evidence regarding agricultural earnings. 11. Without prejudice the addition is excessive arbitrary and unreasonable and liable to be reduced substantially.

12.

The learned assessing authority erred in levying the interest us 234 of the Act Page 3 of 12 13. For these and other grounds that may urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed.

TOTAL TAX EFFECT – Rs.12,70,000/-

3.

At the outset, as noted by the Registry, there is a delay of 511 days in filing the appeal before this Tribunal. The assessee has filed an application dated 10.4.2026 along with a corrected affidavit dated 9.4.2026 in original sworn before the notary stating the reasons of delay in filing the appeal before this Tribunal, which is reproduced below for ease of reference and convenience:

4.

Before us, the ld. AR of the assessee vehemently submitted that the delay occurred solely due to lack of knowledge of orders and non-receipt of notices, arising due to the age, limited digital literacy and absence of network connectivity. Hence, the ld. A.R. submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus Page 8 of 12 prayed to condone the delay before the ld. CIT(A)/NFAC and requested to consider the issues raised by the assessee on merits.

5.

On the contrary the ld. D.R. vehemently objected for granting the condonation of delay and submitted that the assessee had neither appeared before the AO nor before the ld. CIT(A)/NFAC which clearly demonstrate the careless attitude of the assessee.

6.

We have perused the details filed by the assessee to justify the delay and we are satisfied that there is no malafide intention on the part of the assessee in filing the appeal belatedly before us. It is to be noted that u/s 253(5) of the Act, the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeals within the prescribed period. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing these appeals within the prescribed time. We have gone through the reasons explained by the assessee. On perusal of the above affidavit, we find that the assessee could not file the appeal within the prescribed period for the reason that the assessee is a senior citizen and not conversant with mobile phones, electronic communication or online proceedings and he was entirely unaware of any notices or communications issued by the department. The assessee is staying in a remote area where mobile network connectivity is also very poor and frequently unavailable. The assessee have no regular access to email or online portals and he came to know about the assessment order and the appellate order only when department officials visited his premises for inspection, during which he was informed about the orders passed and pending tax demand. The assessee thereafter, approached his Page 9 of 12 tax consultant & filed the present appeal with an application for condonation of delay. We are of the considered opinion that the assessee has demonstrated the sufficient cause in filing the appeal belatedly by 511 days before this Tribunal.

6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:

(1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner.

(4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in Page 10 of 12 deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority.

6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”.

6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Page 11 of 12 Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 511 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 511 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.

7.

Now having condoned the delay in Appeal, before us both the parties fairly conceded that the assessee could not represent his case before both the authorities below. On perusal of the assessment order dated 27.9.2019, we observed that AO had passed an order best of his judgment u/s 144 of the Act by treating the entire cash deposit of Rs.12,70,000/- as unexplained investment u/s 69 of the Act r.w.s. 115BBE of the Act. Further, on perusal of the order of the ld. CIT(A)/NFAC, we observed that the assessee despite being provided seven numbers of opportunities by the ld. CIT(A)/NFAC, neither filed any response nor any submissions. This being so, and as requested by the ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of AO to decide afresh in accordance with law. Needless to say a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the relevant documents/records/information/evidence in order to substantiate his claim. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.

8.

In the result, appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 2nd July, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 2nd July, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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