ANANTHAIAH ROOPA,BANGALORE V. INCOME TAX OFFICER WARD 4(2)(4), KORAMANGALA

ITA 1340/BANG/2025

AI Insights

The case revolves around Ananthaiah Roopa, who faced an assessment order under section 144 of the Income Tax Act, which added unexplained cash deposits of Rs.13,66,000 during the demonetization period to her income for AY 2017-18. The Assessing Officer (AO) passed this order based on the non-response of the assessee to a show cause notice regarding the source of these deposits. The CIT(A) upheld this assessment, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal, after considering the medical reasons for the delay in filing the appeal and the merits of the case, decided in favor of the assessee, emphasizing substantial justice over technicalities.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840617 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 10-06-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji and Ors., People Education & Economic Development Society Vs/ ITO, CIT vs. K.S.P. Shanmugavel Nadai and Ors., Commissioner of Income-tax v. D. Lakshminarayanapathi
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE
• Assessee Lawyers: SWATHI JAIN; WAY OF
• Keywords: Condonation of delay; Reasonable cause; Gift; Period of limitation; Bonafide mistake; Right to appeal; Revision of order
• Section: 144; 142(1); 154; 133(6)

Judgement Text

"ITANo.1340/Bang/2025 Ananthaiah Roopa, Bengaluru IN THE INCOME TAX APPELLATE TRIBUNAL “SMC’’BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1340/Bang/2025 Assessment Year : 2017-18 Ananthaiah Roopa No.58, Carmelaram Post Sarjapura Road Halanayakana Halli Bengaluru 560 035 Karnataka PAN NO : BULPR6701D Vs. ITO Ward 4(2)(4) Bengaluru APPELLANT RESPONDENT Appellant by : Smt. Swathi Jain, A.R. Respondent by : Sri Ganesh R Ghale, D.R. Date of Hearing : 17.12.2025 Date of Pronouncement : 25.02.2026 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instant of the assessee is directed against the order of ld. CIT(A)/NFAC, Delhi dated 12.11.2024 vide DIN and Order No.ITBA/NFAC/S/250/2024-25/1070270001(1) passed u/s. 250 of the Act (in short “the Act”) for the AY 2017-18. 2. The Assessee has raised the following grounds of appeal:- Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 2 of 15 3. At the outset, the ld. A.R. of the assessee submitted that there is a delay of 130 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on an Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 3 of 15 application for condonation of delay dated 24.6.2025, which is reproduced below for ease of reference and convenience: Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 4 of 15 4. On going through the above application for condonation, we find that the assessee could not file the appeal within the prescribed period for the reason that the assessee was suffering from arthritis-related issues and was under medical treatment. The assessee has also produced the medical certificate from the Government Medical Officer in support of her claim.The ld. A.R. also submitted that the delay was unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits. 5. On the contrary the ld. D.R. vehemently objected for granting the condonation of delay in filing the appeal and submitted that the assessee did not appear before the AO. Further, there was also delay of 439 days in filing the appeal before the ld. CIT(A) which clearly demonstrate the careless attitude of the assessee. 6. We have perused the details filed by the assessee to justify the delay and we are satisfied that there was no malafide intention on the part of the assessee in filing the appeal belatedly before us.It is to be noted that u/s 253(5) of the Act the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeals within the prescribed time. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing these appeals within the prescribed time. We have gone through the reasons explained by the assessee in which we noticed that the delay was mainly due to the fact that the assessee was undergoing medical treatment which is also supported by the medical certificate produced from the Government Medical Officer. Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 5 of 15 6.1 While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalize injustice on technical ground when the Tribunal is Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 6 of 15 capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalizing an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorized by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalize an illegal and unconstitutional order passed by the lower authority. 6.3 Further, in the case of People Education & Economic Development Society Vs/ ITO reported in 100 ITD 87 (TM) (Chen), wherein held that “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”. 6.4 The next question may arise whether delay was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. In fact, the Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. When compared to 21 years, 130 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 7 of 15 majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM) condoned more than six hundred days delay. Therefore, in our opinion, by preferring the substantial justice, the delay of 130 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication. 7. Now the Brief fact of the case are that as per the information available with the department from the 360 degree profile of the assessee, there have been substantial cash deposits to the tune of Rs.13,66,000/- during the demonetization period in the assessee’s bank account and it was also found that assessee had not filed her return of income for the relevant AY 2017-18. Subsequently, the notice u/s. 142(1) of the Act was issued calling for return of income for AY 2017-18. Further, a letter u/s. 133(6) of the Act was also issued to the South Indian Bank, Carmelaram, Bengaluru for a period under consideration and latest KYC detail. The account statement furnished by the bank were analyzed for the period 01/04/2016 to 31/03/2017 and found that there were cash deposits during 09/11/2016 to 31/12/2016 Amounting to Rs.13,66,000/-. The AO thereafter issued show cause notice to explain the source of cash deposits into her bank account however, there was no response from the assessee and accordingly the AO construed that the assessee had nothing more to offer. In view of the above facts, the AO constrained to pass best judgement assessment u/s. 144 of the Act based on the material collected and accordingly added the entire cash deposits during the period, commencing from 09/11/2016 to 31/12/2016 as unexplained money u/s. 69A of the Act. The AO concluded the assessment proceedings u/s. 144 of the Act on a total assessed income of Rs.13,66,000/-. Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 8 of 15 8. Aggrieved by the order of the AO passed u/s. 144 of the Act on 25/09/2019, the assessee preferred an appeal before the CIT(A)/NFAC. 9. The ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing that the appeal was filed with a delay of 439 days after excluding the period extended by the Hon’ble Supreme Court. Further, the ld. CIT(A)/NFAC also found that the assessee had also filed an application for revision u/s. 264 of the Act before the ld. PCIT, Bengaluru-2 against the impugned assessment order dated 25/09/2019. The revision application filed by the assessee was dismissed by the ld. PCIT-Bengaluru-2 vide order no. ITBA/REV/F/REV-7/2021-22/1042165089(1) dated 30/03/2022. The assessee thereafter filed the present appeal on 24/03/2023 with a request for condoning the delay. The ld.CIT(A)/NFAC relying on the decision of Hon’ble Punjab and Haryana High Court in the case of Jaskaran Singh vs. Union of India (2014) 51 taxaman.com 199 held that once the assessee had taken recourse to revisional remedy u/s. 264 of the Act and after the rejection of the petition, it was not opened to have fallen back on statutory remedy of appeal under the Act and accordingly held that the appeal filed by the assessee against the order u/s 144 of the Act is dismissed as not maintainable. 10. Again aggrieved by the order of the ld.CIT(A)/NFAC dated 12/11/2024, the assessee has filed the present appeal before this Tribunal. The assessee has also filed written submission along with the copy of gift deed, bank statements evidencing withdrawals and deposits, declaration letter of loan etc. in support of her claim. 11. Before us, the ld.AR of the assessee vehemently submitted that the ld.CIT(A)/NFAC grossly errored in dismissing the appeal by holding that once the assessee had taken recourse to revisional Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 9 of 15 remedy u/s. 264 of the Act and after the rejection of the petition it was not opened to have fallen back on statutory remedy of appeal under the Act. Further, the ld.AR of the assessee submitted that assessee had received gift of site from her mother on 06/04/2016 and started to construct house on that site in the middle of October 2016. The assessee had obtained the loan from Canfin Home Finance on 24/10/2016. The assessee had also taken a gold loan of Rs.9,30,000/-. Apart from that the assessee had taken hand loan from her brother, husband and other relative for the construction which amounts to Rs.2,00,000/- and also having personal savings of around Rs.45,000/-. The AR of the assessee submitted that all put together come to Rs.13,75,000/- and due to some personal reasons the construction could not started in full fledged and could not spend the withdrawn cash. In the meanwhile demonetization taken place on 08th of November 2016 and hence the assessee had no option but to deposit the entire cash withdrawn earlier for construction into South Indian Bank amounting to Rs.13,66,000/- and accordingly prayed that the appeal may be appeal of the assessee may be allowed in the interest of justice & fairplay. 12. The ld. DR on the other hand supported the order of the authorities below and vehemently submitted that once the assessee had opted for the revision proceedings u/s. 264 of the Act, by applying the doctoring of merger, the assessee is precluded from approaching the appellate authority u/s. 246/246A of the Act against the assessment order. The ld. DR submitted that once the revisional power vested with the CIT u/s. 264 of the Act is invoked and the CIT passes the order by exercising his jurisdiction under that section, the order of assessment merges with that the order of revision. Further, the order passed by the CIT u/s. 264 is also not Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 10 of 15 an appealable order u/s. 246/246A of the Act and accordingly prayed to dismiss the appeal of the assessee. 13. We have heard the rival submission and perused the material available on record. On going through the assessment order, we take a note of the fact that the assessee could not represent her case before the AO and accordingly the AO passed an assessment order to the best of his judgement u/s. 144 of the Act based on the bank account statement collected from the bank. On going through the order of ld. CIT(A)/NFAC, we also take a note of the fact that the ld. CIT(A)/NFAC dismissed the appeal of the assessee by holding that the appeal filed by the assessee is not maintainable. Further, we also take note of the fact that the appeal before the ld. CIT(A)/NFAC was filed by the assessee with a delay of 439 days after excluding the period extended by the Hon’ble Supreme Court. The ld. CIT(A)/NFAC although noted that the assessee had no knowledge of the process to be followed after receiving the order, filed a letter for revision of Order u/s 264 of the Act & waited for its outcome. Further, the assessee had also medical issues & for this reason there was a delay of 439 days in filing the appeal before the ld. CIT(A)/NFAC. On going through the order of the ld. CIT(A)/NFAC, we observe that the ld. CIT(A)/NFAC is completely hushed on the condonation application filed by the assessee & straight way jumped to the conclusion that the present appeal is not maintainable in view of the decision of Hon’ble Punjab and Haryana High Court in the case of Jaskaran Singh vs. Union of India (supra). After going through the reason/cause for the delay in filing the appeal before the ld. CIT(A)/NFAC as mentioned above, we are inclined to condone the delay of 439 days after excluding the period extended by the Hon’ble Supreme Court as the assessee has demonstrated sufficient and bonafide cause for not filing the appeal within the prescribed period. Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 11 of 15 13.1 Now with regard to filing of revision petition u/s. 264 of the Act by the assessee before the ld. PCIT, we are of the considered opinion that assessee had on a bonafide mistaken ground of law filed the same before the ld. PCIT instead of CIT(A)/NFAC. The right to appeal is a statutory right and cannot be taken away merely because assessees initially under a wrong advise or inadvertently/ mistakenly invoked the revisional jurisdiction. Further, we are also of the considered opinion that the provisions dealing with the appellate authorities do not bar an assessee from invoking appellate jurisdiction, if she has invoked revisionary jurisdiction, even though for invoking revisionary jurisdiction it is a precondition that the appellate jurisdiction should not have been invoked. Thus, there is nothing in the Act that prevents an assessee to move appellate jurisdiction under section 246A of the Act if the effort made under section 264 of the Act is proved unsuccessful. The ld. CIT(A)/NFAC would be justified in entertaining an appeal against the assessment by condoning the delay even though the ld. PCIT had passed an order u/s 264 of the Act against the assessee. The provisions of the Act provides more than one remedy to the assessee and the assessee can certainly invoke all of them. 13.2 The ld.CIT(A)/NFAC heavily relied on the decision of Hon’ble Punjab and Haryana High Court in the case of Jaskaran Singh vs. Union of India (2014) 51 taxaman.com 199 and held that once the assessee had taken recourse to revisional remedy u/s. 264 of the Act and after the rejection of the petition, it was not opened to have fallen back on statutory remedy of appeal under the Act. We are of the considered opinion that under similar facts & circumstances, the Hon’ble High Court of Madras in the case of Commissioner of Income-tax v. D. Lakshminarayanapathi reported in (Mad-HC) :(2001) 250 ITR 187 has held as under- Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 12 of 15 “JUDGMENT Jayasimha Babu, J. - Though there is no limitation on the exercise of the appellate power in the statute on the ground that the assessee had invoked the revisional power unsuccessfully, it is contended for the revenue that such a limitation should be read into the provision dealing with appeals under the Income- tax Act. There is no provision in the Act in express terms, which supports the arguments so advanced by the revenue. It is not disputed that the provisions dealing with the appellate authorities do not bar an appellant from invoking the jurisdiction, if he had invoked revisional jurisdiction, even though for invoking revisional jurisdiction, it is a pre-condition that the appellate jurisdiction should not have been invoked. 2. The argument advanced before us is that by inferential reasoning we should hold that if there is a limitation on exercise of revisional power, a similar limitation should be read into the exercise of the appellate power. It does not require any authority to hold that it is not within the province of the court to rewrite the law on the ground that the provision should have been worded in a different manner in order to make it seemingly consistent with some other provision. Moreover, it is wholly unnecessary for Parliament to impose the same kind of restriction for invoking different kinds of jurisdiction. It is open to the law-maker to provide more than one remedy to the aggrieved party and so long as such remedies are available, the aggrieved parties can certainly invoke them. 3. The Tribunal has rightly held that the assessee, notwithstanding his unsuccessful effort at having the order revised, could still file an appeal as invoking the revisional jurisdiction could not constitute a bar to the filing of an appeal. It is for the Legislature to impose such a bar if it considers it necessary to do so. 4. We, therefore, find no error in the order of the Tribunal. We answer the question as to ‘whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the AAC was justified in entertaining the assessee’s appeal against the assessment, even though the Commissioner had passed an order under section 264 of the Income-tax Act, 1961 (‘the Act’) against the assessee and holding that the provisions of section 154 of the Act were applicable and a revision was not barred by limitation’, in favour of the assessee and against the revenue. No costs.” 13.3 It is trite law that if two views are possible, the one favorable to the assessee in the matter of taxation to be preferred. Thus, respectfully following the decision of the Hon’ble High Court of Madras, we are inclined to hold that there is no limitation on the exercise of the appellate power in the statute on the ground that the Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 13 of 15 assessee had invoked the revisional power unsuccessfully. The provisions dealing with the appellate authorities do not bar an appellant from invoking the jurisdiction, if he had invoked revisional jurisdiction, even though for invoking revisional jurisdiction, it is a pre-condition that the appellate jurisdiction should not have been invoked. 13.4 Now coming to merits of the case, the assessee by way of written submission vehemently submitted that the assessee being a female with no legal or tax expertise earns her livelihood through small scale tailoring business, the income from which is below the taxable threshold. Further, the assessee also submitted that her financial and personal circumstances are compounded by the fact that she is the primary care giver for her handicapped husband. It is also submitted that the assessee had received gift of site from her mother vide registered gift deed dated 06/04/2016 (placed at page no.44 to 48 of the PB). The assessee started construction of house on that site in the middle of October 2016 and for that purpose taken a home loan from Canfin Home Finance on 24/10/2016. The assessee had also taken a gold loan of Rs.9,30,000/-. Apart from that the assessee had taken hand loan from her brother, husband and other relative for construction which amounts to Rs.2,00,000/- and also having personal savings of around Rs.45,000/-.The assessee submitted that all put together comes to Rs.13,75,000/-. The bank loan statements as well as loan confirmation letters from brother & husband were also placed in the paper book. The assessee had withdrawn the cash from the bank to make payment to the labour and to procure construction materials just before the demonetization period as detailed below:- Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 14 of 15 Date Bank Amount Withdrawn 25/10/2016 Canara Bank 2,00,000 27/10/2016 Canara Bank 4,80,000 07/10/2016 South Indian Bank 47,000 20/10/2016 South Indian Bank 1,00,000 02/11/2016 South Indian Bank 3,03,000 Total 11,30,000 13.5 We are of the opinion that the sources of cash withdrawals from the bank are also clearly visible in the bank statements which is from Housing loan as well as from Gold loan. The contention of the assessee is that due to delayed construction, the cash which were held by the assessee before the declaration of demonetization were deposited in to the bank account of the assessee. We find force in the argument of the assessee after going through the gift deed, housing loan statement, gold loan statement produce before us. We have also gone through the confirmation letter of brother & husband of the assessee. As can be seen above, the assessee had withdrawn total amounting to Rs.11,30,000 /- just immediately declare of demonetization. In view of the above, we find merits in the argument of the AR of the assessee and accordingly we delete the entire addition made by the AO u/s 69A of the Act which in our opinion is purely based on guess and surmises. 14. Inthe result the appeal filed by the assessee is allowed. Order pronounced in the open court on 25th Feb, 2026 Sd/- (Prashant Maharishi) Vice President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 25th Feb,2026. VG/SPS Printed from counselvise.com ITA No.1340/Bang/2025 Ananthaiah Roopa, Bengaluru Page 15 of 15 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. Printed from counselvise.com "