SHADAKSHARASWAMY DODDAGANGAVADI VEERAIAH,BANGALORE vs. INCOME TAX OFFICER, WARD-5(3)(1), BANGALORE
What did the Tribunal hold?
The Tribunal condoned the delay of 35 days, finding sufficient cause for the late filing due to the tax practitioner's negligence. Additional evidence submitted by the assessee was also admitted.
What were the facts?
The assessee's appeal was filed with a delay of 35 days due to the alleged failure of their tax practitioner to represent them and suppress information. The assessee sought condonation of this delay.
What were the issues?
Whether the delay in filing the appeal was sufficiently explained and should be condoned, and whether additional evidence should be admitted.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC’’BENCH: BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 29.04.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1075871995(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2020-21.
The assessee has raised the following grounds of appeal:
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At the outset, the ld. A.R. of the assessee submitted that there is a delay of 35 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on an application for condonation of delay dated 4.8.2025 along with an affidavit in original sworn before the notary public stating the reasons for the delay, which are reproduced below for ease of reference and record:
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3.1 On going through the application for condonation, we find that the assessee could not file the appeal within the prescribed period for the reason that the assessee had engaged a Tax practitioner/Chartered Accountant named Mr. S. Deepak, to take care of his tax matters. However, the assessee came to know later that the said tax practitioner failed to represent before the tax Authorities, did not make any submissions before the Authorities & falsely assuring that everything would be taken care of. All along the developments, notices, orders were suppressed from the knowledge of the assessee. When it became unmanageable of late, the tax professional admitted and tendered apologies to the assessee. In this regard the assessee has also submitted a letter dated 29/07/2025 in which the tax professional had admitted that
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 9 of 29 they have inadvertently missed responding to the notices & also deeply regrated for the same. The ld. A.R. also submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits.
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) which clearly demonstrate the careless attitude of the assessee.
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 time. 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 in which the assessee alleged that his Tax professional/CA failed to represent before the tax Authorities, did not make any submissions before the Authorities & falsely assuring that everything would be taken care of. All along the developments, notices, orders were suppressed from the knowledge of the assessee. When it became unmanageable of late, the tax professional admitted and tendered apologies to the assessee.
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 10 of 29 5.1 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.
5.2 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 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
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 11 of 29 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.
5.3 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”.
5.4 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 sufficient 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 Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 35 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
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 12 of 29 opinion, by preferring the substantial justice, the delay of 35 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication.
The assessee has also raised the following additional grounds of appeal:
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6.1 During the course of hearing, the assessee however did not press the additional grounds as raised which are purely legal in nature & accordingly, we dismiss these additional grounds raised by the assessee as not pressed.
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Further, the assessee has submitted the following additional evidences along with an affidavit dated 24.11.25 as follows:
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According to Rule 29 of the I.T. Rules, 1963¸ generally the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal but if the Tribunal requires any document to be produced to enable it to pass orders or for any other substantial cause, or, if the income tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal for reasons to be recorded, may allow such document to be produced or may allow such evidence to be adduced. In the present case, the
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 19 of 29 assessee submitted that the assessee had engaged a Tax practitioner/Chartered Accountant named Mr. S. Deepak, to take care of his tax matters. However, the assessee came to know later that the said tax practitioner failed to represent before the tax Authorities, did not make any submissions before the Authorities & falsely assuring that everything would be taken care of. All along the developments, notices, orders were suppressed from the knowledge of the assessee. When it became unmanageable of late, the tax professional admitted and tendered apologies to the assessee. This being so, we find good and sufficient reason in not submitting the additional evidences before the lower authorities. Accordingly, we admit these additional evidences as in our opinion these are essential for adjudication of the issue in the present appeal.
Now the brief facts of the case are that specific information was flagged as per Risk Management Strategy formulated by the CBDT through insight Module under the head “RMS Non-Filing of Return”. As per the specific information, the assessee had carried out following transactions during the financial year 2019-20 relevant to the Assessment Year 2020-21: Information Information Source Amount Amount code Description Description (Rs.) SFT-012(B) Purchase Sub-Registrar Office, Transaction 5581500 by any Chamrajpet amount person Bangalore related to immovable Sreerameswaraswam the person property Temple Commirca
9.1 It was further examined and verified from the e-filing portal and other records that the assessee had not filed the return of income despite having such high value transactions during the AY 2020-21. The AO in view of the fact that assessee had not filed the return of income u/s 139 of the Act recommended that income of the assessee chargeable to tax has escaped assessment. Therefore,
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 20 of 29 an inquiry letter as per the provisions of section 148A(a) of the Act was issued to the assessee. However, no response was received by the AO. Further, a show notice u/s 148A(b) of the Act was issued to the assessee asking to show cause as to why a notice u/s 148 of the Act should not be issued on the basis of information, which suggest that the income of the assessee chargeable to tax has escaped assessment. However, the assessee again did not respond to the said show cause notice. As the assessee had entered into transaction amounting to Rs.55,81,500/- as described in the above table and also did not file the return of income for the AY 2020-21 and considering the fact that the assessee also did not furnish any reply to the notices issued u/s 148A(b) of the Act, the AO held that the income of the assessee chargeable to tax amounting to Rs.55,81,500/- has escaped assessment for the AY 2020-21 and accordingly held to be a fit case for issuing notice u/s 148 of the Act. Thereafter, the AO issued notice u/s 148 of the Act on 16.3.2024 after getting the prior approval of the ld. PCIT-3, Bengaluru.
9.2 In response to notice u/s 148 of the Act, the assessee filed his return of income on 22.4.2024 by declaring net taxable income of Rs.4,11,060/- and paid self-assessment tax of Rs.1,000/-. During the course of assessment proceedings, the assessee furnished all the relevant documents as requisitioned like statement of income, copy of ITR acknowledgement, loan statement, copy of sale deed, Form No.16, etc. as required by the AO.
9.3 During the assessment proceedings, the AO noticed that the assessee had purchased the immovable property i.e. residential property with address Minerva Maple, No.759, Unit No.401, 4th Floor, Viswa Bharathi Housing Complex Layout, Hosakehalli Village, Uttarahalli, Hobli Bengaluru 560 085 for purchase
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 21 of 29 consideration of Rs.42 lakhs while the stamp duty valuation of the said property was Rs.55,81,500/- during the year under consideration. During the course of assessment proceedings, the assessee filed his submissions on 19.9.2024 and 7.10.2024 and furnished all relevant documents as requisitioned.
9.4 The AO finally concluded the assessment proceedings on a total assessed income of Rs.47,95,777/- as detailed below:-
i. Total income as per return of income u/s 148 of the Act – Rs.4,11,060/- ii. Difference of Rs.13,81,500/- (Stamp duty value of the property Rs.55,81,500/- less actual purchase consideration of Rs.42,00,000/- paid by the assessee) are treated as income from other sources as per section 56(2)(vii)(b)(2) of the Act and added to the total income of the assessee.
iii. In the absence of supporting documents for claim of deduction u/s 80C of the Act amounting to Rs.1,50,000/- were disallowed and added to the total income of the assessee, amounting to Rs.1,50,000/-.
iv. The assessee has purchased the immovable property amounting to Rs.42 lakhs out of which Rs.13,46,783/- was paid by obtaining the loan from GIC Housing Finance Ltd. and in the absence of furnishing the source of fund for the remaining amount of Rs.28,53,217/- was added as unexplained investment u/s 69 r.w.s. 115BBE of the Act.
Aggrieved by the order of AO passed u/s 147 of the Act dated 20.1.2025, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
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The ld. CIT(A)/NFAC with regard to differential value of Rs.13,81,500/- held that if the assessee had any grievance with regard to valuation of the property, the assessee should have requested the AO to refer the case to the Valuation Officer. But the assessee did not do the same and accordingly confirmed the addition of Rs.13,81,500/-.
11.1 Further, with regard to Rs.28,53,217/- added u/s 69 of the Act as unexplained investment, the ld. CIT(A)/NFAC observed that the assessee is a State Government employee and working as Head Constable in the Police Department from 1997 onwards and put on long years of service. Thus, considering the assessee’s long years of service, the ld. CIT(A)/NFAC held that the assessee might have reasonable accumulated savings over a period of time. To the meet the ends of justice, the ld. CIT(A)/NFAC considered 1/5th of the investment in the property as unexplained and accordingly the balance 4/5th value of investment in the property on the total addition was deleted. Thus, out of the total addition of Rs.28,53,217/-, 1/5th portion which comes to Rs.5,70,643/- was confirmed and the balance addition of Rs.22,82,574/- was deleted.
11.2 Lastly, with regard to deduction u/s 80C of the Act, the assessee filed all the relevant details before the ld. CIT(A)/NFAC and the ld. CIT(A)/NFAC found the same to be in order and accordingly directed the AO to allow deduction u/s 80C of the Act. Thus, the ld. CIT(A)/NFAC partly allowed the appeal of the assessee.
Again, aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 79 pages
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Before us, the ld. A.R. of the assessee vehemently submitted that the assessee is a Police Head Constable and working in the Department of Police, Government of Karnataka since 28.5.1997. The assessee has a habit of saving. Further, as the assessee’s total income for the assessment year under consideration was less than Rs.5 lakhs and accordingly, the assessee on an honest & Bonafide belief did not file his return of income as the tax liability was nil. Further, the ld. A.R. of the assessee submitted that merely because the assessee had purchased a property of Rs.42 lakhs, the case of the assessee was reopened by issuing notice u/s 148 of the Act. Further, with regard to difference of Rs.13,81,500/- i.e. difference of stamp duty value and actual purchase consideration, the ld. A.R. of the assessee submitted that said flat was not saleable at the stamp duty value since the BBMP had ordered for demolition due to illegal construction and the fair market value of the flat is Rs.42 lakhs only. Further, with regard to confirmation of addition amounting to Rs.5,70,643/- by the ld. CIT(A)/NFAC, the ld. A.R. of the assessee vehemently submitted that the assessee is also having agricultural income & his wife is also working as a school teacher & also conducting tuitions and therefore, ld. CIT(A)/NFAC was unjustified in confirming the balance of Rs.5,70,643/- out of a total Rs.28,53,217/- and accordingly prayed to allow the appeal of the assessee.
The ld. D.R. on the other hand, relied upon the order of the ld. CIT(A)/NFAC.
ITA No.1735/Bang/2025 Shadaksharaswamy Doddagangavadi Veeraiah, Bengaluru Page 24 of 29 15. We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the assessee is working as a Head Constable in the Department of Police, Government of Karnataka since 28.5.1997. Therefore, we agree with the contention of the ld. CIT(A)/NFAC that considering the assessee’s long years of service, there may be a reasonable accumulated savings over a period of time. Further, before us, the ld. A.R. of the assessee vehemently submitted that the assessee’s family is having agricultural income also. The assessee has also produced a chart showing details of payment made for purchase of property as well as sources of these funds placed at pages 78 to 79 of the paper book. On perusal of the same, we observed that out of Rs.42 lakhs, Rs.15 lakhs was paid through Canara Bank, Rs.11,53,217/- was paid through State Bank of India and Rs.13,46,783/- was paid by availing loan from GIC Housing Finance Ltd. and the balance of Rs.2 lakhs only was paid through cash, which the assessee claimed to have agricultural income from the assessee’s family owning 20 acres 27 Guntas of lands near Ramanagara. Further, the assessee submitted that his wife S. Shyamala Devi is also working as a school teacher and also conducting tuitions. The wife of the assessee has also declared gross total income of Rs.5,92,839/- for the AY 2020-21 as per the ITR filed. Therefore, we are of the considered opinion that the ld. CIT(A)/NFAC should have deleted the entire addition of Rs.28,53,217- instead of deleting Rs.22,82,574/- only. Further, we also find that the ld. CIT(A)’s confirmation of addition of Rs.5,70,643/- by considering 1/5th of the total addition of Rs.28,53,217/- as unexplained is without any basis, arbitrary and therefore, we direct the AO to delete the entire addition as confirmed by the ld. CIT(A)/NFAC amounting to Rs.5,70,643/- and accordingly this ground of appeal of the assessee is allowed.
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15.1 Now with regard to addition of the differential value of Rs.13,81,500/-, we observed that the ld. CIT(A)/NFAC dismissed this ground of appeal by saying “if the assessee had any grievance with regard to the valuation of the property, then he should have requested the AO to refer the case to valuation officer”. But the assessee did not do the same. On perusal of the order of ld. CIT(A)/NFAC, we also find that the ld. CIT(A)/NFAC has not given any cogent reason in confirming the addition of Rs.13,81,500/-. On perusal of the assessment order, we observed that the differential amount of stamp duty value as per the stamp duty authorities amounting to Rs.55,81,500/- and actual purchase consideration paid for the flat amounting to Rs.42 lakhs was added by the AO under “income from other sources” as per section 56(2)(vii)(b)(ii) of the Act. Before us, the ld. A.R. of the assessee vehemently submitted that the said flat is not saleable at stamp duty value for the reason that the BBMP had ordered for demolition due to the illegal construction and accordingly submitted that the fair market value of the flat was only the purchase price paid by the assessee. The assessee had also submitted a copy of the order regarding removal of identified portions of unauthorized buildings constructed contrary to the plan vide letter dated 20.6.2024, as an additional evidence which is reproduced below and submitted that the purchase price of Rs.42 lakhs was only the fair market value of the property:-
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15.2 Therefore, we are of the considered opinion that the ld. AO had grossly erred in not referring the valuation of the flat to a valuation officer before confirming addition of Rs.13,81,500/-. The Kolkata High Court in the case of Sunil Kumar Agrawal Vs. CIT (2015) 372 ITR 83 (Kol.) has held that in the case of the stamp duty valuation is higher than the consideration received, the AO must refer the matter to the valuation officer even if there is no request by the assessee. The contention of the ld. CIT(A)/NFAC that the assessee failed to request to the AO to refer the case to valuation officer is not tenable. Further, we also observed that the AO has made an addition u/s 56(2)(vii)(b) of the Act for the differential amount of stamp duty valuation and the purchase consideration paid. Further, we also take note that the said provisions are applicable only on or after the 1st day of October, 2009 but before the 1st day of April, 2017. Therefore, the correct provision which is applicable to the assessee for the AY 2020-21 is section 57(2)(x)(b) of the Act, which is applicable on or after 1st day of April, 2017. Therefore, considering the argument of the assessee that the fair market value of the property is only the purchase price since the BBMP has ordered for demolition due to the illegal construction made by the builder & considering the copy of guideline value book for the property for the year 2018-19 as well as considering the BBMP Information letter dated 20.6.2024 filed by way of additional evidence before us, we accept the contention of the assessee that the purchase price was the actual fair market value of the said flat and accordingly we delete the entire addition of Rs.13,81,000/- made under the wrong provisions of the Act.
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In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 19th May, 2026
Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member
Bangalore, Dated 19th May,2026. VG/SPS
Copy to:
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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