BANGARANAYAKA NAGESH,CHAMARAJANAGAR vs. ITO, WARD-1, CHAMARAJANAGAR

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ITA 153/BANG/2026Status: DisposedITAT Bangalore19 June 2026AY 2018-198 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the 181-day delay in filing the appeal before the CIT(A) due to the assessee's medical condition. The Tribunal then remitted the entire issue back to the AO for fresh consideration, taking into account a similar assessment order for AY 2021-22.

What were the facts?

The assessee, a business correspondent for Canara Bank, deposited a large sum of cash into his bank account, which the AO considered unexplained. The assessee failed to file a return of income and did not respond to notices during reassessment proceedings.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) was justifiable, and if the AO's reassessment order was correct given the assessee's role as a business correspondent.

Which sections of the Income-tax Act were involved?

Section 139,Section 147,Section 144,Section 144B,Section 250,Section 194C,Section 271AAC

AI-generated summary — verify with the full judgment below

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

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

Hearing: 24.03.2026Pronounced: 19.06.2026

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 18.12.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1083858461(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.

2.

The assessee has raised the following grounds of appeal:-

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 2 of 8

3.

The assessee has also raised the following additional grounds of appeal:

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 3 of 8

3.1 During the course of hearing, the ld. AR of the assessee did not press the above additional grounds and accordingly these grounds are dismissed as not pressed.

4.

Now the brief facts of the case are that the assessee is engaged as a Business Correspondent (BC)/ “Bank Mitra” for Canara bank under a financial inclusion initiative, facilitated through M/s Integra Micro Systems Private Limited in the location Chamarajanagara. The nature of work involved enabling basic

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 4 of 8 banking services in rural areas where physical branches were either not accessible or non-existent. In furtherance of this engagement, a separate bank account (Canara Bank A/c No. 0797101039456) was opened specifically for carrying out these business activities. All the transactions were routed through this account represented funds collected from and disbursed to bank customers. These funds were held in a fiduciary capacity as part of the assessee’s role as a business correspondent. The assessee received fee of Rs.1,28,283/- for facilitating such banking transactions, on which the tax was also deducted at source U/s 194C of the Act. The assessee did not file any return of income for the said assessment year since the total income was way below the taxable limit.

4.1 As per the specific information flagged as per RMS under the head ‘NMS Cases’, the assessee had deposited cash of Rs. 2,80,10,123/- at Canara Bank and also received contract receipts from Integra Micro Systems Pvt. Ltd. amounting to Rs.1,28,283/- but failed to file his return of income u/s 139 of the Act and therefore in the absence of ROI, source of cash deposit in bank account and contract receipts remained unexplained. The assessee during the course of 148A proceedings submitted his reply stating that he is a business correspondent of the Canara bank & the entire cash deposits belongs to the customers of the Canara Bank but the AO in the guise of further verification concluded that the assessee has no proper explanation with respect to the escapement of income for AY 2018-19 & decided that it is a fit case for issuance of notice u/s 148 of the Act. The AO thereafter proceeded to issue notice u/s 148, 142(1), SCN u/s 144 along with one final SCN, however the assessee except filing the return of income by declaring the income of Rs.1,28,280/- did not respond to any of the notices during the re-assessment proceedings. The AO concluded the reassessment proceedings on 19.03.2024 u/s 147 r.w.s. 144 read

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 5 of 8 with section 144B of the Act on a total assessed income of Rs.2,81,38,403/-.

5.

Aggrieved by the ex-parte re-assessment order dated 19/03/2024, the assessee preferred an appeal before the ld. CIT(A)/NFAC with a delay of 181 days.

6.

During the course of Appellate proceedings, the assessee submitted that the delay was neither willful nor due to negligence but solely due to severe and chronic medical condition of the assessee that had rendered him incapacitated for an extended period. Further the assessee stated that he was battling with life threatening hepatobiliary and pancreatic ailments requiring multiple hospitalizations, intensive care and prolonged recovery periods throughout 2024 & 2025 but the ld. CIT(A)/NFAC held that the assessee has not stated any justifiable reason for not filing the appeal in the intervening period from 18/04/2025 till 25/01/2025 & accordingly rejected the contention of the assessee. Further, relying certain judgments the ld. CIT(A)/NFAC held that there was no sufficient cause for condonation of delay in filing the appeal and accordingly dismissed the appeal as not maintainable without any discussion on merits or any other aspect.

7.

Again aggrieved by the order of the ld. CIT(A)/NFAC dated 18/12/2025, the assessee has filed the present appeal before this Tribunal. The assessee has filed a paper book comprising of 26 pages containing therein the written submissions filed before the ld. CIT(A)/NFAC, copy of the penalty order passed u/s 271AAC of the Act dated 17.9.2024, copy of letter dated 14.10.2024 issued by the Senior Manager of Canara Bank, copy of medical discharge

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 6 of 8 summary and a copy of order of assessment for AY 2021-22 dated 15.10.2025.

8.

Before us, the ld. A.R. of the assessee submitted that the ld. CIT(A)/NFAC grossly erred in dismissing the appeal without condoning the delay of 181 days in filing the appeal especially when the sufficient cause was demonstrated. Due to severe and chronic medical condition of the assessee, there was delay in filing the appeal before the ld. CIT(A)/NFAC and accordingly prayed that the delay may be condoned. Further, the ld. AR requested that after condoning the delay, the case of the assessee may be remitted back to the file of ld. AO for fresh consideration as the assessee could not represent his case before the AO.

9.

The ld. D.R. relied on the orders of the authorities below and vehemently submitted that the assessee did not respond to any of the notices issued during the course of assessment proceedings.

10.

We have heard the rival submissions and perused the materials available on record. On perusal of the order of the ld. CIT(A)/NFAC, we observed that the ld. CIT(A)/NFAC dismissed the appeal as not maintainable without any discussion on merits or on any other aspect by not condoning the delay of 181 days in filing the appeal. Before us, the assessee by way of paper book filed the copy of the written submission dated 17/12/2025 submitted before the ld. CIT(A)/NFAC along with copy of the medical discharge summary (placed at pages 10-21 of PB). On going through all these records as well as contentions of the AR of the assessee, it is perceived that the explanation offered by the assessee is plausible and sufficient cause been shown by the assessee, which prevented

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 7 of 8 him from filing the appeal within the prescribed period and accordingly, we are incline to condone the delay of 181 days in filing the appeal before the ld. CIT(A)/NFAC and admit the same for adjudication on merits. 10.1 Now having condoned the delay in filing the appeal, the ld. AR of the assessee also drew our attention on copy of the assessment order for the AY 2021-22 dated 15/10/2025 (placed at pages 22-26 of the PB) & vehemently submitted that under the similar facts & circumstances of the case the AO himself for the AY 2021-22 had accepted the source & nature of cash deposits as agency transactions for Canara Bank customers and only commission income accrues as income of the assessee. This being so, considering the fact that the assessee could not represent his case before the AO, we deem it fit & proper to remit the entire issues in dispute to the file of the AO to decide a fresh in accordance with law after taking into consideration the assessment order passed in the case of the assessee for the AY 2021-22. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce copy of letter dated 14/10/2024 issued by the Senior Manager of Canara Bank produced for the first time before us.

11.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 19th June, 2026

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 19th June, 2026. VG/SPS

ITA No.153/Bang/2026 Bangaranayaka Nagesh, Chamarajanagar Page 8 of 8

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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