MUNIYAPPA PRASHANTH KUMAR,BENGALURU V. INCOME TAX OFFICER, WARD-4(3)(3), BENGALURU

ITA 1627/BANG/2025

AI Insights

The case involves Muniyappa Prashanth Kumar, a small milk vendor, who did not file his income tax return for the Assessment Year 2018-19, believing his income was below the taxable limit. However, substantial cash deposits and payments to contractors were discovered, leading to a reassessment under sections 147 and 144 of the Income Tax Act, 1961. The AO treated these as unexplained money and expenditure, resulting in a significant tax liability. The CIT(A)/NFAC dismissed the initial appeal due to a delay in filing, which the ITAT later condoned, emphasizing substantial justice over technicalities. The case was remitted back to the AO for a fresh assessment, considering the assessee's limited education and awareness.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831181 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 30 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: 21-07-2025
• 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), People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN
• Assessee Lawyers: VIGNESH
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Unexplained expenditure; Bonafide belief; Period of limitation; Reason to believe
• Section: 147; 148; 144; 142(1); 133(6); 69C

Judgement Text

"ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1627/Bang/2025 Assessment Year: 2018-19 Muniyappa Prashanth Kumar No.105, Ground floor, Royal Meenakshi Mall Shop Name Bannerghatta Road Hulimal Meenakshi Temple B G. Road Bengaluru 560 076 Karnataka PAN NO : BXFPP1360R Vs. ITO Ward 4(3)(3) Bengaluru APPELLANT RESPONDENT Appellant by : Sri Vignesh, A.R. Respondent by : Sri Subramanian, D.R. Date of Hearing : 13.01.2026 Date of Pronouncement : .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 17.10.2024 vide DIN and Order No: ITBA/NFAC/S/250/2024-25/1069747783(1) passed u/s. 250 of the income Tax Act, 1961 (in short “the Act”) for the AY 2018- 19. 2. The assessee has raised the following Grounds of appeal: - Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 2 of 11 3. At the outset, there is a delay of 202 days in filing this appeal before this Tribunal. The ld. A.R. of the assessee drew our attention to an application dated 08/01/2026 stating therein the cause for the delay, which is reproduced below for ease of reference and convenience: Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 3 of 11 Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 4 of 11 4. On going through the application for condonation of delay, we noticed that the assessee could not file the appeal within the prescribed period for the reason that the assessee did not receive the order either by email or through the post. Further, no text message was also received by the assessee as an intimation of passing of order. The assessee was completely unaware of the order passed by the ld. CIT(A)/NFAC. 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 and submitted that the assessee had neither appeared before the AO nor before the ld. CIT(A) which clearly demonstrate the careless attitude of the assessee. Further, the ld. Dr submitted that the assessee had filed the appeal belated not only before the ld. CIT(A)/NFAC but also before this Tribunal which clearly demonstrate that the assessee is very callous in approach in filing the appeal & accordingly prayed that the appeal may be dismissed in limine. Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 5 of 11 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 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 this appeal within the prescribed time. We have gone through the reasons explained by the assessee in which we found that the assessee was completely unaware of the order passed by the ld.CIT(A) & therefore he could not file the appeal within the prescribed period. 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. Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 6 of 11 (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. 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”. Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 7 of 11 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, 202 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 202 days has to be condoned and accordingly we condone the delay and admit the appeal for adjudication. 7. Brief facts of the case as narrated by AR of the assessee is that the assessee is a small milk vendor and having limited educational background. The assessee did not file his return of income for the AY 2018-19 u/s. 139(1) of the Act on an honest & bonafide belief that his income does not exceed the maximum amount which is not chargeable to Income Tax. From the records available, it was found by the AO that the assessee had made huge cash deposits Rs.1,05,54,220/- in his saving bank account (Syndicate Bank- Rs.68,47,460/- and Canara Bank-Rs. 37,06,760/-) during the year under consideration. In addition to this the assessee had made payments to contractors M/s. Daily Ninja Delivery services Pvt Ltd amounting to Rs.4,22,000/-. Hence, the assessment for AY 2018-19 Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 8 of 11 was reopened u/s. 147 of the Act with the reason to believe that the income chargeable tax has escaped assessment. Accordingly, notice u/s. 148 of the Act dated 31/03/2022 was issued to the assessee after following the due proceedings u/s. 148A of the Act. Thereafter, the AO issued several letters and notice u/s. 142(1) of the Act as well as show cause notices on various dates however, the assessee did not responded to any of the notices served through the e-mail and ITBA. 7.1 As the assessee was found non-responsive, the notice u/s. 133(6) of the Act was issued to third party seeking the relevant documentary details on the said transactions. The AO received the information from the Canara Bank. Keeping in view the fact that no reply was filed by the assessee despite several opportunities provided, the AO fairly considered that the assessee is not interested in pursuing the case and has nothing to say in this matter and hence the entire cash deposits of Rs.1,05,54,220/- was taxed u/s. 69A r.w.s 115BBE of the Act as unexplained money. Secondly the payment made to contractors of Rs.4,22,000/- was also taxed as unexplained expenditure u/s. 69C r.w.s 115BBE of the Act as no income from contract business was disclosed to tax by filing ITR. The AO completed the assessment proceedings by passing assessment order u/s. 147 r.w.s 144 of the Act on a total income of Rs.1,09,76,220/- as under:- Returned income (NO ITR filed) 0 Addition as per para 8(i) 1,05,54,220/- Addition as per para 8(ii) 4,22,000/- Total income assessed 1,09,76,220/- Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 9 of 11 8. Aggrieved by the assessment order passed by the AO u/s. 147 r.w.s 144 of the Act dated 25/03/2023, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 9. The ld.CIT(A)/NFAC dismissed the appeal of the assessee by not condoning the delay of 163 days in filing the appeal before the ld. CIT(A)/NFAC as the explanation given by the assessee in the opinion of the ld. CIT(A)/NFAC are not amount to sufficient cause within the meaning of section 249 of the Act and accordingly dismissed the appeal without further going into the merit of the case. 10. Again aggrieved by the order of ld.CIT(A)/NFAC dated 17/10/2024 passed u/s. 250 of the Act, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 23 pages containing therein the copy of written submissions along with copy of computation of total income, acknowledgement for filing the tax audit report, audited financials as well as case laws relied upon by the assessee. 11. Before us, the ld AR of the assessee vehemently submitted that the assessee is a small milk vendor operating on a very thin profit margin. Further, the AR submitted that the assessee having limited educational exposure and having little knowledge about the computer could not notice the order served by the lower authorities. Since, the assessee could not represent his case before both the authorities below and hence prayed that the case of the assessee may be remanded back to the file of AO to decide the fresh in accordance with law. 12. The ld. DR on the other hand vehemently submitted that the assessee is very callous in his approach in filing the appeal not only Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 10 of 11 before this Tribunal but also before the ld. CIT(A)/NFA. The ld. DR also argued that if the case is remanded back to the file of AO, then some cost may be levied to the assessee for the continuous negligence shown by the assessee before both the authorities. 13. We have heard the rival submission and perused the material available on record. Before us, the assessee has filed the computation of income as well as copy of audited financials along with the acknowledgment of filing the audit report u/s. 44AB of the Act. The AR of the assessee vehemently argued before us that the assessee is a small milk vendor and taxing the entire cash deposit amounting to Rs.1,05,54,220/- as well as payment made to contractor amounting to Rs.4,22,000/- is highly unjustified. It is undisputed fact that the assessee could not represent his case before both the authorities below. The ld.CIT(A)/NFAC even did not consider the case of the assessee on merits and dismissed the appeal by not condoning the delay of 163 days in filing the appeal before him. We are of the considered opinion that as the assessee being an illiterate person on an honest and bonafide believe that the communication received to be a mere notice and was unaware that final appellate order has been passed is in our opinion a sufficient cause in filing the appeal belatedly before the ld. CIT(A)/NFAC and accordingly we condone the delay in filing the appeal before the ld. CIT(A)/NFAC by 163 days. Now having condoned the delay in filing the appeal before the ld. CIT(A)/NFAC, in the interest of justice and fair play, we deem it fit and proper to remit the entire issue in dispute to the file of AO to decide a fresh in accordance with law. 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. Printed from counselvise.com ITA No.1627/Bang/2025 Muniyappa Prashanth Kumar, Bengaluru Page 11 of 11 13.1 Further, while remitting the matter back to the file of ld. AO, we also consider it necessary to impose a token cost of Rs.5,000/- to the assessee owing to the continuous negligence shown towards the statutory notices before both the Authorities below. The assessee shall deposit the total cost of Rs.5,000/- in favour of Prime Minister Relief Fund and the receipt thereof shall be furnished before the ld. AO. With these terms, the appeal of the assessee is restored to the file of the AO for de-novo consideration with the above observations. 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 "