MUKHTAR ABDUL PASHA,BANGALORE V. INCOME TAX OFFICER, WARD-5(2)(2), BANGALORE

ITA 1862/BANG/2025

AI Insights

Mukhtar Abdul Pasha, the appellant, faced an ex-parte assessment under sections 144 and 147 of the Income Tax Act, 1961, for the assessment year 2011-12, due to non-filing of his income tax return and unexplained cash deposits totaling Rs. 97,05,550. The Income Tax Officer (ITO) treated these as unexplained cash credits under section 68 of the Act. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld this decision, leading to the appeal before the ITAT. The ITAT found that the assessee was unaware of the CIT(A)'s order and had a reasonable cause for the delay in filing the appeal, thus condoning the delay and remanding the case for further examination of the source of the deposits.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 832171 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 25-08-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), People Education & Economic Development Society Vs/ ITO (100 ITD 87 TM) (Chen), CIT vs. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN
• Assessee Lawyers: H. GURUSWAMY
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Unexplained cash credit; Period of limitation
• Section: 147; 148; 144; 142(1); 68; 131; 44AD

Judgement Text

"ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1862/Bang/2025 Assessment Year: 2011-12 Mukhtar Abdul Pasha 83/12, 1st Floor, 1st Main Road Kalasipalyam Bengaluru 560 002 PAN NO : AGRPP1235H Vs. ITO Ward 5(2)(2) Bengaluru APPELLANT RESPONDENT Appellant by : Sri H. Guruswamy, A.R. Respondent by : Sri Subramanian, D.R. Date of Hearing : 13.01.2026 Date of Pronouncement : 20.01.2026 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This Appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC, Delhi dated 19.05.2025 vide DIN and Order No: ITBA/NFAC/S/250/2025-26/1076294587(1) passed u/s. 250 of the income Tax Act, 1961 (in short “the Act”) for the AY 2011- 12. 2. The assessee has raised the following Grounds of appeal:- Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 2 of 14 Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 3 of 14 3. At the outset, as stated by the AR of the assessee, there is a delay of 38 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention to an affidavit filed in original sworn before the notary public stating therein the cause for the delay along with an application for condonation of delay both dated 25.08.2025, which are reproduced below for ease of reference and convenience: Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 4 of 14 Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 5 of 14 Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 6 of 14 4. On going through the above application for condonation of delay, we take note of the fact that the assessee not having much educational background & also not a tech savvy person could not file the appeal within the prescribed period for the reason that the assessee was completely unaware of the order passed by the ld. CIT(A)/NFAC. The assessee came to know about the ex-parte Appellate Order through the departmental calls made for recovery of demand and thereafter the assessee filed the appeal immediately with Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 7 of 14 an unintended delay of 38 days. The ld. A.R. also submitted that the delay is 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 and submitted that the assessee had neither appeared before the AO nor before the ld. CIT(A) and 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 is 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 appeal within the prescribed period. The explanation therefore, becomes relevant to determine whether the same reflect sufficient and reasonable cause on the part of the assessee in not filing this appeal within the prescribed time. We have gone through the reasons explained by the assessee in which we noticed that the assessee was completely unaware of the order passed by the ld.CIT(A)/NFAC. 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 Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 8 of 14 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 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. Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 9 of 14 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 sufficient 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, 38 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by 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 38 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication. 7. Now, the brief facts are that the case of the assessee was reopened for the reason that as per the ITS details, the assessee was selected as a non-filer assessee under NMS. The assessee had not Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 10 of 14 filed his return of income for the AY 2011-12. As per the individual transactions statements, it was seen that the assessee had made the cash deposits of Rs.10,00,000/- or more in saving bank account during the FY 2010-11 amounting to Rs.97,05,550/- . In view of the above, the AO was of the opinion that the income chargeable to tax has escaped assessment and hence notice u/s. 148 of the Act dated 31/03/2018 was issued with prior approval of the PCIT-5, Bengaluru calling upon the assessee to file return of income. The AO thereafter issued several reminder letters, notice u/s. 143(2) of the Act, summons u/s. 131 of the Act as well as final show cause notice u/s. 142(1) of the Act, however, the assessee neither filed any return of income in response to notice u/s. 148 of the Act nor furnished any reply/ submissions to any of the notices. The AO held that the assessee is concealing his income and willfully avoiding to file return of income for the AY 2011-12 and disclose the total cash deposit of Rs.97,05,550/- made in the following banks as per the AIR information:- Sl.No Name of the Bank Amount of cash deposited 01 ICICI Bank Limited Rs.59,40,700/- 02 Kotak Mahindra Bank Limited Rs.37,64,850/- TOTAL Rs.97,05,550/- The AO after considering the above details available on record, completed the assessment proceedings exparte u/s. 144 r.w.s 147 of the Act by making an addition of Rs.97,05,550/- under the head “Income from other sources” as unexplained cash credits u/s. 68 of the Income Tax Act, 1961 and determined the total tax payable with interest amounting to Rs.57,30,110/-. Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 11 of 14 8. Aggrieved by the order of the AO passed u/s. 144 r.w.s 147 of the Act dated 27/12/2018, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 9. The ld. CIT(A)/NFAC dismissed the appeal of the assessee by noticing that the assessee has not utilized various opportunities to furnish the required explanation for source of cash deposits in bank accounts backed with adequate documentary proof to support his stand either during the assessment proceedings or during the present appellate proceedings. It is possible that he has no such proof available with him. In such a circumstance, no useful purpose will be served to remit the case back to the file of the AO. 10. Again aggrieved by the order of ld. CIT(A)/NFAC dated 19/05/2025, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 29 pages containing therein copy of written submissions, along with copy of return of income filed on 24/03/2014, copy of hearing notice dated 30/04/2025 along with the copy of bank statements of ICICI Bank. 11. Before us, the ld. AR of the assessee vehemently submitted that the assessee is engaged in providing backend services by way of liaisoning between the vehicle owners and the RTO office. The assessee received amount from the vehicle owners for making the payment towards the expenditure relating to the payment of vehicle tax/ insurance and other miscellaneous expenditure for a meagre renumeration. The amount found deposited in the bank account represents the amount deposited by a vehicle owner to facilitate incurring expenditure such as vehicle tax, vehicle insurance and other miscellaneous expenses and accordingly submitted that the entire amount deposited in the bank account amounting to Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 12 of 14 Rs.97,05,550/- is not the income of the assessee. Further, the ld. AR of the assessee vehemently submitted that the case may be remanded back to the file of AO as the assessee could not represent his case before the authorities below with a direction that if the assessee demonstrates that the entire deposits are from the consultancy services by way of liaisoning between the vehicle owners and the RTO officers, then the AO may be directed to apply provisions of section 44AD of the Act as the turnover of the assessee is less than one crore. 12. The ld. DR on the other hand vehemently submitted that the claim of the assessee that he has filed his return of income for the AY 2011-12 is completely baseless as the assessee filed return of income for the AY 2011-12 only on 24/03/2014 i.e. way after the date of filing belated return u/s. 139(4) of the Act. Further, the ld. DR submitted that the assessee failed to establish the entire source of cash deposits amounting to Rs.97,05,550/- and prayed to dismissed the appeal of the assessee. 13. We have heard the rival submissions perused the material available on record. It is an undisputed fact that during the course of re-assessment proceedings, the assessee did not file any return of income in response to notice u/s. 148 of the Act. It is also an undisputed fact that the return filed by the assessee for the AY 2011-12 on 24/03/2014 is non est in law as it was filed way after the date as prescribed u/s. 139(4) of the Act. Before the ld.CIT(A)/NFAC as well as before us, the AR of the assessee fervently claimed that the assessee was providing backend services by way of liaisoning between the RTO office and the vehicle owners who approached the assessee for seeking assistance in getting the licenses and payment of vehicle taxes and insurance. The assessee received amount from the vehicle owners for making the payment Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 13 of 14 towards the expenditure relating to the payment of vehicle tax/ insurance and other miscellaneous expenditure for a meagre renumeration. The amount found deposited in the bank account represents the amount deposited by a vehicle owner to facilitate incurring expenditure such as License fee, vehicle tax, vehicle insurance and other miscellaneous expenses and accordingly submitted that the entire amount deposited in the bank account amounting to Rs.97,05,550/- cannot be income of the assessee. 13.1 We are of the opinion that these facts were not examined by the Authorities below & as the assessee also could not represent his case before the AO and explain his case, we deem to fit and proper to remit the entire issue in dispute to the file of AO with a direction that incase the assessee will able to substantiate his claim of engaging in the logistics services by way of liaisoning between the vehicle owners and the RTO Office and the amount deposited in the bank account were found to be of the vehicle owners, the entire deposits may be treated as turnover of the assessee and accordingly net profit of the rate of 8% on the same may be applied as per the provisions containing in section 44AD of the Act. Needless to say a reasonable opportunity of being heard must be granted to the assessee. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. it is ordered accordingly. Printed from counselvise.com ITA No.1862/Bang/2025 Mukhtar Abdul Pasha, Bangalore Page 14 of 14 14. In the result appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 20th Jan, 2026 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 20th Jan, 2026. VG/SPS 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 "