GALI LAKSHMI ARUNA ,BELLARY V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1(3), BANGALORE

ITA 1184/BANG/2024

AI Insights

The case involves Smt. Gali Lakshmi Aruna, the appellant, who challenged the order of the CIT(A)-11, Bangalore, regarding the assessment year 2018-19. The primary issues were the rejection of the condonation of delay in filing the appeal and the addition of Rs. 1,11,89,710 under section 56 of the Income Tax Act, 1961, attributed to interest earned from HDFC Bank. The CIT(A) had dismissed the appeal on technical grounds due to the inordinate delay without considering the merits of the case. The Tribunal found that the delay was not intentional and had valid reasons, thus setting aside the CIT(A)'s decision and remanding the case for a fresh decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32829 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V. PARITHIVEL
• Assessee Lawyers: SRIPADA M
• Keywords: Condonation of delay; Set aside; Sale consideration of property below Jantri Value; FORM 26AS
• Section: 56; 153; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 1184/Bang/2024 Assessment Year : 2018-19 Smt. Gali Lakshmi Aruna, No. 52, Siruguppa Road, Havambavi, Bellary, Karnataka – 583 103. PAN: AFJPA5974P Vs. The Deputy Commissioner of Income Tax, Central Circle – 1(3), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Sripada M, CA Revenue by : Shri V. Parithivel, JCIT-DR Date of Hearing : 12-12-2024 Date of Pronouncement : 28-01-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the Ld.CIT(A)-11, Bangalore dated 23/04/2024 in respect of the A.Y. 2018-19 and raised the following grounds: “Ground No I The learned CIT(Appeals) have erred by not accepting the condonation of delay request in filing Page 2 of 5 ITA No. 1184/Bang/2024 appeal even after submitting sufficient cause for such delay. Ground No II The learned CIT(Appeals) have erred by not condoning the delay in filing appeal merely on account of not providing an affidavit by the appellant. Ground No III The learned CIT(Appeals) have erred by not adjudicating the appeal on merits. Ground No IV The learned Assessing Officer erred by making an addition of Rs. 1,11,89,710/- under section 56 of the Income Tax Act, 1961 on account of interest earned from HDFC Bank without understanding the background and facts.” 2. The brief facts of the case are that the assessee is an individual and she filed her return of income on 15/07/2018. The return was processed by CPC on 20/11/2018. Thereafter, based on the information received through risk management system in Insight portal that the assessee had purchased a property on 01/03/2018 for a consideration of Rs. 10 Lakhs whereas the market value as per the stamp duty value was Rs. 20 Lakhs. Therefore the AO had come to the conclusion that there are some escapement of income. On that basis, further procedures has been followed and an assessment was made by treating the said difference amount of Rs. 10 Lakhs as income from other sources. Further, based on the difference between the form 26AS and ITR, the AO had alleged that the assessee had received an interest of Rs. 1,11,89,710/- from the HDFC Bank for which details were sought by the AO. The assessee submitted that the interest accrued in the account was not received by her since the said deposit was attached by the CBI. Therefore, unless and until the attachment was raised by CBI, the assessee will not have the benefit of interest. The AO not accepted the explanation and subjected the said income to tax. As against the said order the assessee filed an appeal before the Ld.CIT(A)-11, Bangalore with a delay of 153 days. The assessee explained the reasons for the said delay and prayed to condone the said delay. The assessee also raised the issue on merits but the Page 3 of 5 ITA No. 1184/Bang/2024 Ld.CIT(A) had dismissed the appeal on the ground that the delay of 153 days was not properly explained. As against the said order, the present appeal has been filed by the assessee. 3. At the time of hearing, the Ld.AR submitted that the reasons stated in the delay condonation petition is the actual reasons and therefore on technical grounds, the same could not be treated as not a sufficient reason to condone the delay and prayed to set aside the order of the Ld.CIT(A). The Ld.AR also further submitted that the assessee is having a prima facie case in their favour and since the appeal was not decided on merits by the Ld.CIT(A), there is no opportunity to decide the issue on merits. 4. The Ld.DR relied on the orders of the lower authorities and submitted that the inordinate delay of 153 days has been rightly rejected by the Ld.CIT(A) and prayed to dismiss the appeal. 5. We have heard the arguments of both sides and perused the materials available on record. 6. We have perused the reasons stated by the assessee for the above said delay of 153 days which is furnished in the written submissions filed by her on 19/04/2024 which reads as follows: “2. In the present application, the appellant is seeking condonation of delay in filing the appeal against the order dated March 20, 2023. 3. During the period under assessment, the Appellant resided in Bellary, actively participating as a candidate for the Member of Legislative Assembly (MLA) election front the Bellary constituency in the Karnataka State Elections of 2023. This marked the Appellant's inaugural foray into electoral politics. representing a newly formed political party 4. Given the demands of her candidacy, the Appellant found herself tirelessly traversing her constituency, engaging with constituents and stakeholders. Consequently, she entrusted the management of her other Page 4 of 5 ITA No. 1184/Bang/2024 obligations, including matters concerning income tax, to external professionals and consultants. However, regrettably, these professionals inadvertently overlooked the impugned Order, the subject of the Appeal presented before your esteemed authority. 5. It wasn't until after the fervor of the election subsided and the Appellant had time to reflect on her electoral defeat that she discovered the oversight regarding the failure to file an appeal against the aforementioned Order. 6. Immediately following this realization, the Appellant promptly filed the appeal, recognizing the urgency of rectifying the oversight 7. Thus, the appellant submits that there was a sufficient cause of not filing the appeal within the time stipulated under the Act. The delay occasioned in filing the present appeal was beyond the control of the appellant. 8. The appellant further submits that the delay is neither intentional nor deliberate.” 7. As seen from the above said explanation offered by the assessee, we are of the view that the assessee had properly explained that the delay has been occurred not intentionally and deliberately. The Ld.CIT(A) dismissed the appeal on technical grounds. In this case, the assessee had valid reasons for not filing the appeal in time and in order to render substantial justice, the Ld.CIT(A) could have condoned the delay and decided the appeal on merits but unfortunately the Ld.CIT(A) had dismissed the appeal for the reason that the reasons stated by the assessee is not sufficient reasons to condone the said delay. 8. We are not in agreement with the view expressed by the Ld.CIT(A) and therefore we are setting aside the order of the Ld.CIT(A) and condoned the said delay of 153 days in filing the appeal before the ld CIT(A) and direct the Ld.CIT(A) to decide the issue afresh on merits and in accordance with law after hearing the assessee. Page 5 of 5 ITA No. 1184/Bang/2024 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 28th January, 2025. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice - President Judicial Member Bangalore, Dated, the 28th January, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore "