DHANDAPANI GOWTHAM BALAJI,MYSORE vs. THE INCOME TAX OFFICER, BENGALURU

ITA 594/BANG/2026Status: DisposedITAT Bangalore09 October 2026AY 2020-217 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the learned CIT(A), finding that the assessee's reasons for delay fell within the parameters laid down by the Supreme Court in "Collector Land Acquisition, Anantnag vs. MST Katiji and others." The Tribunal held that procedural rules are subservient to substantial justice and that the assessee did not benefit from the delay. The CIT(A) was not justified in dismissing the appeal on delay without adjudicating on merits. The Tribunal also noted the assessee's unfamiliarity with e-proceedings, the circumstances of the revised return filing, and the claim of possessing supporting documents. In the interest of substantial justice, the Tribunal restored the matter to the AO for de novo assessment, granting the assessee a final opportunity to substantiate his case. The assessee was directed to cooperate fully and file all documents without seeking unnecessary adjournments. A cost of Rs. 5,000/- was imposed on the assessee. The quantum and penalty proceedings were set aside and restored to the AO for fresh adjudication. No issue was expressly left undecided.

What were the facts?

The assessee, Dhandapani Gowthambalaji, an individual dealing in metal scraps, filed his return for AY 2020-21 declaring an income of Rs. 5,37,860/- under Section 44AD on a turnover of Rs. 97,17,510/-. The case was reopened based on information of cash withdrawals of Rs. 25,13,43,639/-. The assessee filed a revised return declaring a turnover of Rs. 1,54,25,000/-. Notices under Sections 143(2) and 142(1) were issued, but the assessee's response was insufficient. Bank statements revealed total credits of Rs. 3,03,79,862/-. The Assessing Officer (AO) rejected Section 44AD, made an addition of Rs. 51,12,500/- under Section 69A for unexplained cash deposits, and added Rs. 17,96,523/- to business income by estimating profit at 12% on a turnover of Rs. 2,52,54,362/-, assessing total income at Rs. 81,43,020/-. The assessee's appeal to the CIT(A) was dismissed for delay of 175 days without adjudicating on merits.

What were the issues?

1. Whether the learned CIT(A) was justified in dismissing the appeal on the ground of delay, without adjudicating the grounds on merits, considering the reasons provided by the assessee for condonation of delay. Assessee's Contention: The assessee argued that as a small businessman unfamiliar with e-proceedings, the revised return was filed by his auditor while he was away. He migrated due to COVID-19 and only became aware of the proceedings later, promptly seeking legal advice and filing the appeal. The assessment was ex-parte, and he sought a final opportunity to present his case. The assessee relied on the principles laid down in "Collector Land Acquisition, Anantnag vs. MST Katiji and others" for condonation of delay. Revenue's Contention: The revenue contended that the assessee was consistently non-cooperative, failing to furnish explanations or evidence despite repeated opportunities from both the AO and the CIT(A).

Which sections of the Income-tax Act were involved?

Section 44AD,Section 144,Section 147,Section 144B,Section 148,Section 143(2),Section 142(1),Section 133(6),Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SANDEEP SINGH KARHAIL

PER BENCH:

The assessee has filed the present appeals against separate orders passed under section 250 of the Income Tax Act, 1961 (“the Act”), by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], which in turn arose from the quantum and penalty proceedings, for the assessment year 2020-21. ITA

The order continues below.

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