BANDAHALLI MUTHEGOWDA MANJUNATH,BANDAHALLI vs. DCIT, CIRCLE-(1) (1), BENGALURU

ITA 1197/BANG/2026Status: DisposedITAT Bangalore29 September 2026AY 2018-1911 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay of 509 days in filing the appeal, finding sufficient cause based on the assessee's ill-health, reliance on a tax consultant, and the discovery of jurisdictional defects. The Tribunal cited principles from Collector, Land Acquisition v. Mst. Katiji and Ors. and People Education & Economic Development Society Vs/ ITO to emphasize preferring substantial justice over technicalities. The Tribunal noted that the assessee could not adequately represent their case before the lower authorities. In the interest of justice, equity, and fair play, the Tribunal decided to remit the entire issues in dispute back to the Assessing Officer (AO) for a fresh decision in accordance with the law. The assessee was directed to provide all relevant documents and evidence. The AO was instructed to grant a reasonable opportunity of being heard to the assessee. The Tribunal made it clear that no leniency would be granted for future defaults. The appeal was partly allowed for statistical purposes.

What were the facts?

The assessee, Bandahalli Mathegowda Manjunath, a PWD Contractor, filed an appeal against the order of the CIT(A)/NFAC dated 30.08.2024 for Assessment Year 2018-19. The appeal was filed with a delay of 509 days. The assessee cited ill-health, reliance on a tax consultant who mishandled proceedings, and discovery of jurisdictional defects in the assessment and appellate orders as reasons for the delay. The revenue objected to condoning the delay, citing the assessee's non-appearance before the lower authorities. The Tribunal considered the reasons provided and the case law on condonation of delay.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are bad in law due to being based on incorrect factual material, specifically the bank deposit figure of Rs. 1,67,86,388 pertaining to AY 2017-18 instead of AY 2018-19, indicating a mechanical exercise of power and non-application of mind by the Assessing Officer (AO)? 2. Whether the AO erred in completing the reassessment under Section 147 read with Sections 144 and 144B by estimating profit, when the reassessment was initiated solely on the allegation of unexplained bank deposits, and whether changing the basis of assessment without notice to the assessee is legally permissible? 3. Whether the CIT(A) order suffers from defects such as incorrectly recording the nature of business as 'Others' instead of 'PWD Contractor', showing tax, penalty, interest, and demand as 'O' despite an assessment order determining tax payable, demonstrating a lack of verification and non-application of mind? 4. Whether the CIT(A) erred in dismissing the assessee's ground regarding faulty information relating to AY 2017-18, including the alleged deposits of Rs. 1,67,86,388, and failing to consider that the assessee could not effectively respond due to faulty particulars and ill-health, thereby violating Section 250(6) of the Act? 5. Whether the AO erred in adopting Rs. 2,03,35,097 as turnover based on Form-26AS without reconciling it with the bank deposits of Rs. 1,67,86,388, and whether including income from other sources within business turnover resulted in inflated turnover and double taxation, which the CIT(A) failed to examine? Assessee's Contentions: - Reassessment proceedings are invalid due to incorrect factual basis (Ground 1). - AO changed the basis of assessment without notice (Ground 2). - CIT(A)'s order contains factual and procedural errors (Grounds 3 & 4). - Figures were not reconciled, leading to inflated turnover and double taxation (Ground 5). - Delay in filing the appeal is due to ill-health and reliance on a consultant. Revenue's Contentions: - Objected to condoning the delay due to the assessee's carelessness and non-appearance before lower authorities.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 250,Section 250(6),Section 270A,Section 271B,Section 272A(1)(d),Section 253(5)

AI-generated summary — verify with the full judgment below

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

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri D Kesava Prasad Rao, A.R
Hearing: 14.07.2026Pronounced: 29.09.2026

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 30.08.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1068190414(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:-

Ground No.1: - Invalid Assumption of Juri iction

The reassessment proceedings-initiated u/s 147 are bad in law, as the reopening is based on incorrect factual material. The bank deposit figure of Rs.1,67,86,388, adopted for reopening A.Y

The order continues below.

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