PANCHAPAKESAN KAILASAM,BENGALURU KARNATAKA vs. INCOME TAX OFFICER WARD 2(2)(3) BANAGLORE, BANGALORE KARNATAKA

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ITA 1630/BANG/2025Status: DisposedITAT Bangalore07 October 2026AY 2011-127 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 83 days in filing the appeal, finding that the reasons provided by the assessee, including the demise of his Chartered Accountant and his unfamiliarity with online proceedings, fell within the parameters for condonation as laid down by the Hon'ble Supreme Court in Collector Land Acquisition, Anantnag vs. MST Katiji and others. The Tribunal reasoned that procedural rules are meant to aid justice and that substantial justice should be preferred over technical considerations, especially when the assessee does not stand to benefit from the delay. Regarding the merits, the Tribunal, considering the totality of facts including the demise of the CA, the assessee's age, and the claim of possessing new evidence, deemed it appropriate in the interest of substantial justice to grant one final opportunity. The matter was restored to the file of the AO for de novo assessment, with a direction to the assessee to cooperate fully. A cost of Rs. 5,000/- was imposed on the assessee, payable to the Prime Minister's National Relief Fund. The impugned order was set aside subject to payment of cost.

What were the facts?

The assessee, Panchapakesan Kailasam, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order dated 28.02.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for Assessment Year 2011-12. There was a delay of 83 days in filing the appeal. The assessee attributed the delay to the demise of his Chartered Accountant, his age, and unfamiliarity with online proceedings. The Assessing Officer (AO) had completed the assessment on a best judgment basis under section 144 r.w.s. 147 of the Income Tax Act, 1961, adding Rs. 10,16,159/- for differences in Form 26AS and Rs. 28,08,114/- for unexplained cash deposits. The CIT(A) dismissed the assessee's appeal for non-prosecution after multiple opportunities were not availed.

What were the issues?

1. Whether the delay of 83 days in filing the appeal before the Tribunal is liable to be condoned, considering the reasons provided by the assessee (Section 5 of the Limitation Act, 1963, and principles laid down in Collector Land Acquisition, Anantnag vs. MST Katiji and others)? The assessee argued that the delay was due to the death of his CA, his age, and unfamiliarity with online proceedings, and that there was no mala fide intention. The revenue did not explicitly argue against condonation but highlighted the assessee's non-cooperation. 2. Whether the assessee is entitled to a fresh opportunity to present his case on merits before the AO, given the circumstances leading to the best judgment assessment and dismissal of appeal by the CIT(A)? The assessee contended that he now possesses supporting documents and sought an opportunity to substantiate his claim. The revenue argued that the assessee had consistently failed to cooperate and furnish explanations or evidence despite multiple opportunities before both the AO and CIT(A).

Which sections of the Income-tax Act were involved?

Section 250,Section 148,Section 142(1),Section 144,Section 147,Section 156,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEEM AHMED & SHRI SANDEEP SINGH KARHAIL

PER SANDEEP SINGH KARHAIL, JUDICIAL MEMBER: The assessee has filed the present appeal against the impugned order dated 28.02.2025, 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)”], for the assessment year 2011-12.

2.

At the outset, it is noticed from the appeal record that there is a delay of 83 days in filing the appeal before the Tribunal. Along with the appeal, the assessee has filed an application seeking condonation of delay, duly supported by the affidavit of the assessee. In the affidavit, it has been submitted therein that the assessee came to know of the impugned order only upon receipt of the recovery notice on 04.07.2025, and that on approaching his earlier consultant, it was found that the said Chartered Accountant was no more, on account of which the assessee had to engage a new consultant to take timely action. It has been further submitted that, given his age and unfamiliarity with the online mode of proceedings, the assessee was unable to keep track of the matter, and that there was no mala fide intention in the delayed filing of the appeal, nor would the assessee have gained anything by not filing the appeal on time.

3.

We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag vs. MST Katiji and others, reported in 1987 SCR (2) 387. It is well-established that the Rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee does not stand to benefit from the late filing of the present appeal. In view of the above and having perused the application/affidavit filed by the assessee, we are of the considered view that there was sufficient cause which prevented the assessee from filing the present appeal within the limitation period. Therefore, we condone the delay in filing the appeal and proceed to decide the same.

4.

In this appeal, the assessee has raised the following grounds: -

1.

The impugned order passed by the Learned CITIA) and AO, to the extent prejudicial to the Appellant, is not justified in law and in the facts and circumstances of the case. 2. The learned CIT(A) has erred in law and in fact in upholding the order of the Learned AO. 3. The order of CIT(A) is against the provisions of sections 250(4) and 250(6). 4. The Ld.CIT(A) has erred in law and on facts in dismissing the appeal for non-prosecution. 5. The learned CIT(A) and AO have erred in law and on facts in passing the orders against the principles of natural justice. 6. The Ld.CIT(A) has erred in law and in facts in upholding the order of the Ld.AO in making an addition on account of difference in form 26AS to the extent of Rs. 10,16,159. 7. The Ld.CIT(A) has erred in law and on facts in upholding the order of the Ld.AO in making an addition on account of cash deposits to the extent of Rs. 28,08,114. 8. The Learned CIT(A) and AO have erred in raising demand vide issue of notice under section 156 of the Act. 9. The Learned CIT(A) and AO have erred in fact and in law in levying interest under sections 234B and 234C of the Act.

5.

The brief facts of the case are that the assessee, an individual, filed his return of income for the assessment year 2011-12 admitting total income of Rs.69,96,180/-. The case was reopened by issue of notice under section 148 of the Act. However, no response was made by the assessee, nor was any return filed in compliance thereto. Thereafter, notices under section 142(1) of the Act were issued and served on the assessee, calling for various details, but no response was received. A show cause notice was also issued and served on the assessee, granting an opportunity of being heard. However, the assessee furnished no response even to the said notice. In the absence of any explanation or evidence, the Assessing Officer (“AO”) proceeded to complete the assessment on a best judgment basis under section 144 r.w.s. 147 of the Act, and added a sum of Rs.10,16,159/- being the difference in receipts as per Form 26AS, and a further sum of Rs.28,08,114/- being unexplained cash deposits, to the income of the assessee, thereby assessing the total income at Rs.1,08,20,453/- vide order dated 24.12.2018.

6.

Aggrieved by the said order, the assessee preferred an appeal before the learned CIT(A). In the course of the appellate proceedings, notices dated 26.02.2020, 22.01.2021, 24.08.2021 and 19.02.2025 were issued fixing the matter for hearing on 04.03.2020, 08.02.2021, 31.08.2021 and 25.02.2025, respectively. However, on each of these occasions, no reply, written submission, application for adjournment or evidence was furnished by the assessee. In the circumstances, the learned CIT(A), vide impugned order, held that the assessee had been afforded sufficient opportunities 4 which he failed to avail, and that there was no material on record to warrant interference with the order of the AO. Accordingly, the learned CIT(A) dismissed the assessee’s appeal. Being aggrieved, the assessee is in appeal before us.

7.

During the hearing, the learned Authorised Representative (“learned AR”) submitted that the assessee could not respond to the notices issued by the AO as well as the learned CIT(A) on account of the sudden demise of his Chartered Accountant, who was earlier handling the matter, coupled with the assessee’s age and unfamiliarity with the faceless/online mode of proceedings. The learned AR submitted that the assessee is now in possession of the relevant bank statements and other supporting documents/details which were not filed before the lower authorities, and prayed that one more opportunity be granted to substantiate the claim on merits.

8.

On the other hand, the learned Departmental Representative (“learned DR”) submitted that despite the grant of multiple opportunities, on as many as four occasions before the learned CIT(A) alone, apart from the opportunities granted by the AO, the assessee failed to furnish any explanation or evidence, and that the conduct of the assessee has been consistently non-cooperative before both the authorities below.

9.

We have considered the submissions of both sides and perused the material available on record. We find that the assessee did not respond to the notices issued either by the AO or by the learned CIT(A), resulting in 5 the assessment being completed on a best judgment basis, and the appeal thereafter being dismissed for want of prosecution. However, considering the totality of facts and circumstances, including the sudden demise of the assessee’s Chartered Accountant, the assessee’s age, and the fact that the assessee now claims to be in possession of documents/evidence which could not be placed on record before the lower authorities, we deem it appropriate, in the interest of substantial justice, to grant the assessee one final opportunity to substantiate his claim.

10.

Accordingly, without going into the merits of the case, we deem it appropriate to restore the matter to the file of the AO for de novo assessment in accordance with law, after affording reasonable and adequate opportunity of hearing to the assessee. The assessee is directed to file all the details/documents/evidence in support of his case before the AO without seeking unnecessary adjournments and to fully cooperate in the assessment proceedings, failing which the AO shall be at liberty to complete the assessment on the basis of material available on record. Since the assessee did not appear before the AO as well as before the learned CIT(A) despite the grant of multiple opportunities, we consider it appropriate to impose a cost of Rs.5,000/- (Rupees Five Thousand only), payable by the assessee to the Prime Minister’s National Relief Fund. Subject to payment and verification of the aforesaid cost by the AO, the impugned order is set aside, and the matter is restored to the file of the AO for fresh adjudication on merits, in accordance with law.

11.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on 07-Oct-2026. Sd/- Sd/- (WASEEM AHMED) (SANDEEP SINGH KARHAIL) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore, Dated, the 07-Oct-2026 *VM* Copy to: PANCHAPAKESAN KAILASAM, NO.36, U P HOMES 3RD FLOOR, 11TH MAIN MALLESHWARAM 1 BENGALURU, BENGALURU-560043, KARNATAKA INCOME TAX OFFICER WARD 2(2)(3) BANAGLORE, 2 BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU-560095, KARNATAKA 3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH 5 GUARD FILE BY ORDER

ASSISTANT REGISTRAR I.T.A.T., BANGALORE P G Digitally signed by P G RAJANI RAJANI Date: 2026.10.14 17:16:32 +05'30'

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