Arun Kudur Vs ITO (ITAT Bangalore)
In the case of Arun Kudur, the Bangalore ITAT dealt with a best judgment assessment u/s 144 where income was taxed based on Form 26AS due to non-filing of return and non-compliance with notices.
The assessee later claimed that Form 16 (available on departmental records) contained eligible deductions and exemptions such as Section 10 exemptions, Section 16(iii), 80C, 80TTA, and house property loss, which were not considered by the AO.
The Revenue argued that deductions cannot be allowed without filing a return (Section 80AC(5)), but the Tribunal emphasized a key principle: tax cannot be collected beyond what is legally due (Article 265 of the Constitution).
Holding that mere omission or non-claim cannot defeat a legitimate deduction, especially when supported by records like Form 16 and 26AS, the ITAT granted the assessee one more opportunity.
The matter was remanded to the AO for fresh adjudication, directing verification of documents and allowing lawful deductions.
Thus, the appeal was allowed for statistical purposes, reinforcing that substantive justice prevails over procedural lapses.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal filed by the assessee against the order of CIT(Appeals) Mumbai vide DIN Order No. ITBA/APL/S/215/2025-26/1082767015(1) dated 19.11.2025 for the assessment year 2015-16 arising out of the order passed under Section 154 dated 24th June 2022.
