The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) granted relief to the assessee, by condoning a six-year delay in filing an appeal and remanding the case to the Commissioner of Income Tax (Appeals) [CIT(A)] for adjudication on unresolved tax additions including discrepancies in income and Form 26AS.
Sivarama Krishnaiah,appellant-assessee,filed his return for the assessment year 2010-11 on 28.07.2010, declaring Rs. 20,27,180 as total income. The case was scrutinized by the Assessing Officer (AO), who made additions for bank interest of Rs. 18,714, unexplained cash deposits of Rs. 5,00,000, and a discrepancy of Rs. 6,54,106 in the salary income as per Form 26AS. Additionally, the AO revised the returned income to Rs. 21,43,360, adding Rs. 1,16,180.
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In the appeal, the assessee accepted the addition on salary income but contested the cash deposit and other discrepancies. The CIT(A) focused on the Rs. 5,00,000 cash deposit and found that it was explained as a refund of site advances from M/s Srinidhi Projects. Based on supporting documents, including a confirmation letter from the firm, the CIT(A) concluded that the deposit was legitimate and deleted the addition.
Ultimately, the CIT(A) allowed the appeal and removed the addition for unexplained cash deposits, ruling in favor of the assessee.The CIT(A) stated in the appellate order that the appeal was allowed, but did not address all the grounds raised by the assessee.
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The assessee filed the appeal before the tribunal with a 6-year delay and requested condonation. The appeal also raised issues on additions not addressed by the CIT(A), which the AO retained in the 27.08.2024 order. The tribunal first considered the delay in filing.
The tribunal heard the parties and reviewed the record. The AO had made several additions in the assessment, which the assessee appealed against before the CIT(A). The CIT(A) addressed only the cash deposit issue and granted relief but did not adjudicate other grounds, such as the incorrect returned income and the difference in income as per Form 26AS. The AO passed the order giving effect (OGE) six years later, retaining all additions except the cash deposit.
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The two member bench comprising George George K (Vice President) and Padmavathy S (Accountant Member) considered the legal principles for condoning the 6-year delay in filing the appeal, following the Supreme Court’s guidelines in Mst. Katiji and the Madras High Court’s ruling in K.S.P. Shanmugavel. It found that the delay was not deliberate and was due to the assessee’s bonafide belief that full relief had been granted by the CIT(A). Thus, the delay was condoned.
The tribunal remitted the case back to the CIT(A) to address the unresolved issues, specifically the incorrect returned income and the Form 26AS discrepancy, and directed the CIT(A) to decide these issues in accordance with the law, ensuring the assessee had a fair hearing.
Ultimately, the appeal was allowed for statistical purposes.
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