HANAMAPPA RAMAPPA SHIRUR,BAGALKOT vs. INCOME TAX OFFICER, WARD-1, BAGALKOT

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ITA 2013/BANG/2026Status: DisposedITAT Bangalore13 October 2026AY 2020-2111 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 11 days in filing the appeal before it, finding the explanation plausible and sufficient cause. It also condoned the delay of 125 days in filing the appeal before the CIT(A)/NFAC, accepting the explanation as plausible and sufficient cause. The Tribunal admitted additional evidence, a confirmation letter from Shri Chetankumar K. Shirur, under Rule 29 of the ITAT Rules, 1963, deeming it crucial for deciding the issue of beneficial ownership of the bank account. The Tribunal noted that both parties conceded the assessee, a farmer, could not represent his case properly before the AO due to lack of education and technological familiarity. The Tribunal observed that the CIT(A)/NFAC dismissed the appeal without adjudicating on merits. Considering the confirmation letter from Shri Chetankumar K. Shirur stating that the bank account belonged exclusively to his proprietorship and that the transactions did not belong to the assessee, the Tribunal, in the interest of justice, equity, and fair play, remitted the issue to the AO for fresh consideration after examining the additional evidence and granting the assessee a reasonable opportunity of being heard. The issue of whether the deposits constituted the assessee's turnover was expressly left undecided by the Tribunal, pending the AO's re-examination.

What were the facts?

The assessee, Hanamappa Ramappa Shirur, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the CIT(A)/NFAC for Assessment Year 2020-21. The appeal before the ITAT was filed with a delay of 11 days. The CIT(A)/NFAC had previously dismissed the assessee's appeal in limine due to a delay of 125 days in filing before that authority. The assessee contended that the delay was caused by an inadvertent registration of an incorrect email address on the income tax portal, leading to non-receipt of the assessment order and demand notice. The core dispute involves the treatment of deposits totaling Rs. 1,62,91,310 in a DCB Bank KCC account as the assessee's turnover. The assessee claimed this account was jointly held but exclusively operated by his nephew, Shri Chetankumar K. Shirur, for his business.

What were the issues?

1. Whether the appeal before the ITAT should be admitted despite a delay of 11 days, and if the delay of 125 days in filing the appeal before the CIT(A)/NFAC should be condoned, turning on the interpretation of 'sufficient cause' under Section 249(3) of the Income Tax Act, 1961. - Assessee's contention: The delay before the CIT(A)/NFAC was due to an inadvertent error in email registration on the income tax portal, preventing receipt of the assessment order. As the assessee is not well-versed with technology, this constitutes a sufficient cause. The delay before the ITAT is also attributable to similar circumstances. - Revenue's contention: Not recorded. 2. Whether the CIT(A)/NFAC erred in confirming the Assessing Officer's action of treating total deposits of Rs. 1,62,91,310 in a DCB Bank KCC account as the assessee's turnover, when the account was exclusively operated by Shri Chetankumar K. Shirur, turning on the principle of beneficial ownership and taxability of credits. - Assessee's contention: The account is a joint Kisan Credit Card facility account exclusively operated by Shri Chetankumar K. Shirur. Mere status as a main account holder does not establish beneficial ownership or taxability of credits in the assessee's hands. The credits include loan disbursements and repayments belonging to Shri Chetankumar K. Shirur, who declared them in his ITR. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 249(3),Section 250

AI-generated summary — verify with the full judgment below

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

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

Hearing: 15.07.2026Pronounced: 13.10.2026

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 26.02.2026 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1086571212(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2020-21.

2.

The assessee has raised the following grounds of appeal : -

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Tax effect relating to each ground of 10 Grounds of Appeal appeal (see note below) The impugned order of the learned Commissioner of Income-tax 1 (Appeals) is liable to be set aside in so far as the same is Rs. 0 incorrect, irregular, improper, unlawful, and opposed to the facts and law of the case. The learned First Appellate Commissioner erred in law and on facts in dismissing the appeal in limine on the ground of limitation without condoning the delay of 125 days under section 249(3) of the Act, failing to appreciate that the delay was caused solely due to inadvertent registration of an another email address on the Income- tax Portal resulting in non-receipt of the assessment order 2 Rs. 211633 and demand notice by the Appellant and for the reason that the Appellant being not educated 0R well-versed with technological advances was not accessing the e-filing portal, which constitutes sufficient cause within the meaning of section 249(3) of the Act, and as such the dismissal of the appeal without adjudication on merits is liable to be set aside. Grounds of The learned First Appellate Commissioner erred in law Appeal and on facts in confirming the action of the Assessing Officer in treating the total deposits 0R credits of Rs.1,62,91,310 in DCB Bank KCC Account No. 20345600000134 as the turnover of the Appellant, without appreciating that the said account is a Kisan Credit Card facility account jointly held and 3 Rs. 0 exclusively operated by Shri. Chetankumar K. Shirur (PAN CLSPS6948A), and that mere status as main account holder in banking records does not, in law, establish beneficial ownership 0R taxability of the credits in the hands of the Appellant, and as such the impugned addition is liable to be deleted. The learned First Appellate Commissioner erred in law and on facts in upholding the treatment of gross bank deposits in a KCC credit account as business turnover 0R gross receipts of the Appellant, without independently analysing the nature, character, and source of individual credits and debits, particularly when such credits would 4 Rs. 0 include loan disbursements, repayments, and re-deposits which are not income in the hands of any account holder, and actually belonged to and declared by another person Shri. Chetankumar K. Shirur (PAN CLSPS6948A) in his ITR and as such the impugned order is liable to be set aside.

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2.

At the outset, the ld. A.R. of the assessee submitted that there is a delay of 11 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 07.05.2026, which is reproduced below for ease of reference and convenience:

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4.

Perused the record and having heard learned counsel for the respective parties, it is perceived that the explanation offered in the condonation application is plausible and sufficient cause being shown by the assessee, which prevented the assessee from filing the appeal within the prescribed period before this Tribunal, and accordingly, we are inclined to condone the short delay of 11 days in filing the appeal before this Tribunal.

4.1 Further, we also find that the reason/ cause explained before the ld. CIT(A)/NFAC for filing of appeal belatedly by 125 days is also plausible and sufficient cause had been demonstrated by the assessee and accordingly we are also inclined to condone the delay of 125 days in filing the appeal before the ld. CIT(A)/NFAC.

5.

The assessee has submitted an application dated 14.07.2026 under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 by submitting the confirmation letter issued by Mr. Chetankumar K. Shirur and prayed to admit the same, which is reproduced below: -

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5.1 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. Before us, the ld. A.R. of the assessee vehemently submitted that this additional evidence is crucial for deciding the issue on merits i.e. whether the

ITA No.2013/Bang/2026 HanamappaRamappaShirur, Bagalkot Page 9 of 11 transactions were carried on in the bank account No. 20345600000134 belong exclusively by the Chetankumar K Shirur or not? This being so, we admit the additional evidence as in our opinion this is essential for adjudication of the issue in the present appeal.

6.

Now before us, both the parties fairly conceded that the assessee could not represent his case properly before the AO as the assessee being a farmer carrying on the agricultural activity and do not have any other taxable income is also not educated and well versed with the technology and therefore could not access the email as well as the e-filing portal. On perusal of the order of the ld. CIT(A)/NFAC, we observed that the ld. CIT(A)/NFAC dismissed the appeal in limine by not condoning the delay and decided without going into the merit of the case. Before us, the ld. AR of the assessee vehemently submitted that the assessee had availed a joint credit facility from DCB Bank along with his nephew Mr. Chetan Shirur and his brother Mr. Krishna Shirur, where the assessee was the primary account holder. However, this credit facility account was exclusively used by Mr. Chetan Shirur for the purposes of conducting his business. Further, it is submitted that Mr. Chetan Shirur regularly deposited and withdrew amounts from this joint account as required for his business running under the name and style of “Shri Maruteshwar Agro Traders” and declared the same under his financials as well as income from business while filing his return of income. During the course of assessment proceedings, the assessee vide his reply stated that the said joint credit facility was exclusively utilized by Mr. Chetan Shirur and none of the deposits and withdrawals belonged to the assessee. However, since as per the bank records, the assessee is the main account holder of the account, the AO held that all the transactions made in the aforesaid account certainly pertained to the assessee

ITA No.2013/Bang/2026 HanamappaRamappaShirur, Bagalkot Page 10 of 11 only and not anyone else and did not accept the contention of the assessee.

6.1 Before us, the assessee has filed the confirmation letter issued by Mr. Chetankumar K. Shirur and prayed to admit the same as this confirmation letter could not be produced before the authorities below. Since this evidence produced for the first time before us, the AO had no occasion to examine this confirmation letter issued by Mr.Chetankumar K.Shirur who categorically stated that the bank balance held in such bank account were reflected in his audited balance sheet as well as the return of income filed for the relevant A.Y.2020-21. Further, the said Chetankumar K. Shirur also categorically stated that the aforesaid account belongs exclusively to his proprietorship and the assessee did not carry out any transactions through such account and these transactions do not belong to him. This being so, in the interest of Justice, equity and fair play, we deem it fit and proper to remit this issue to the file of the AO to consider the additional evidence filed for the first time before us after proper examination and verification and decide in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. It is ordered accordingly. 7. In the result the appeal filed by the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 13th Oct, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 13th Oct, 2026. VG/SPS

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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.

P G Digitally signed by P G RAJANI RAJANI Date: 2026.10.21 12:15:15 +05'30'

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