Naik Govinda Vs ITO (ITAT Bangalore)
Summary: The Bangalore Bench of the Income Tax Appellate Tribunal considered the appeal of Naik Govinda against the order dated 18 February 2026 passed by the National Faceless Appeal Centre, Delhi, for Assessment Year 2017-18. The assessee challenged the dismissal of his appeal by the learned CIT(A) on account of a 294-day delay as well as the additions made in the assessment. The assessment order dated 10 March 2025, passed under section 147 read with sections 144 and 144B of the Income-tax Act, determined total income at ₹33,31,340, including an addition of ₹27,06,760 towards cash deposits and ₹3,16,351, being 8% of turnover of ₹39,54,394 treated as business income, besides interest income from banks. The assessment had proceeded ex parte after the assessee did not respond to notices.
The assessee was a retired employee of HMT Watches Ltd., where he had served for 34 years before taking voluntary retirement on 30 January 2016. He was 66 years old and suffered from complete blindness resulting in 100% permanent disability. He submitted that he had bona fide believed that his income was below the basic exemption limit and, because of his disability, advanced age and health constraints, could not independently access electronic communications or monitor proceedings on the income-tax portal. He stated that he became aware of the seriousness of the additions and demand only after receiving the assessment and subsequent recovery-related communications, following which he obtained assistance from family members and engaged a tax professional.
The learned CIT(A) did not accept the explanation and dismissed the appeal as time-barred. Before the Tribunal, Shri Shankar, Chartered Accountant, submitted that the delay ought to have been condoned and that, since the assessment was made under section 144, the matter could be restored to the Assessing Officer for adjudication after granting an opportunity of hearing. The Department supported the orders of the lower authorities.
The Tribunal considered the assessee’s age, complete blindness, 100% permanent disability and inability to access electronic records. It also noted that the assessee had made fixed deposits aggregating to ₹46,45,000 out of accumulated salary savings and retirement benefits received from HMT Watches Ltd. and that cash had been withdrawn in connection with the proposed marriage of his daughter for gold, clothing and other marriage-related expenses. The marriage was cancelled during the same financial year due to unavoidable circumstances, resulting in the cash being redeposited into the bank account, and the marriage was subsequently solemnized on 4 June 2017. The Tribunal found that, in these circumstances, the assessment order passed under section 144 deserved to be restored to the file of the Assessing Officer.
The Tribunal held that the learned CIT(A)’s order was not sustainable as it did not adequately consider the assessee’s physical disability and consequent inability to access records. The judicial precedents relied upon by the learned CIT(A) were held to be distinguishable on the facts of the case. The Tribunal accordingly restored the entire matter to the Assessing Officer, directing the assessee to submit the necessary details and directing the Assessing Officer to consider the assessee’s submissions in light of the facts and circumstances and decide the matter afresh in accordance with law.
Thus, the Tribunal did not finally adjudicate the disputed additions on merits. The assessment matter was restored for fresh consideration, and the assessee’s appeal was allowed for statistical purposes. The order was pronounced in the open court on 27 July 2026.
Related TaxGuru coverage includes faceless proceedings, section 69A, bank deposits and additions, delay in filing an appeal and condonation of delay.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal is directed against the order dated 18 February 2026 passed by the National Faceless Appeal Centre, Delhi, for assessment year 2017-18. The assessee’s appeal against the assessment order dated 10 March 2025, passed under section 147 read with sections 144 and 144B of the Income-tax Act by the National Faceless Assessment Centre, Delhi, was dismissed by the learned CIT(A) on the ground that it was filed late by 294 days and that the assessee had failed to show sufficient cause. In the assessment order, the total income of the assessee was assessed at ₹33,31,340, including an addition of ₹27,06,760 towards cash deposits and ₹3,16,351 being 8% of the total turnover of ₹39,54,394 treated as business income, along with certain interest income earned from various banks.
2. Aggrieved by the said order, the assessee is in appeal before us, challenging both the dismissal of the appeal by the learned CIT(A) and the additions made on merits.
3. The facts, briefly stated, are that the assessee is a retired employee of HMT Watches Ltd., where he served for 34 years before opting for voluntary retirement on 30 January 2016. He is 100% permanently disabled due to complete blindness. For the relevant assessment year, the assessee did not file a return of income under section 139 of the Act, as he was under a bona fide belief that his income was below the basic exemption limit. He was therefore treated as a non-filer. The Income-tax Department received information that the assessee had deposited cash of ₹27,06,760 with State Bank of Mysore, had a fixed deposit receipt of ₹46,45,000 with UCO Bank, and had also earned interest income from banks.
4. Accordingly, the learned Assessing Officer initiated reassessment proceedings, which were not challenged. Notices were issued in accordance with law, but the assessee did not respond. A notice was also issued by speed post, which likewise evoked no response. The learned Assessing Officer therefore proceeded to pass an assessment order under section 144 of the Act. He noted credit entries, including cash, aggregating to ₹27,06,760 in the assessee’s bank account with State Bank of India and, in the absence of any explanation, treated the same as income under section 69A of the Act, applying the higher rate under section 115BBE. He further found cash deposits of ₹39,54,394 in a cooperative bank account and treated 8% thereof, amounting to ₹3,16,351, as the assessee’s business income. In addition, he made further additions on account of bank interest and income-tax refund. Consequently, the assessment order under section 147 read with sections 144 and 144B was passed on 10 March 2025, determining the total income at ₹33,31,350.
5. The assessee challenged the assessment order before the learned CIT(A), who noted that the appeal had been filed with a delay of 294 days. The assessment order was received on 10 March 2025, whereas the appeal was filed on 27 January 2026; accordingly, the delay required explanation.
6. The assessee filed an application for condonation of delay, submitting that he is a retired salaried employee of HMT Watches, is 100% blind, is of advanced age, and suffers from serious health constraints. It was stated that, because of these disabilities, he could not independently access electronic communications or monitor faceless proceedings on the income-tax portal. It was further submitted that he could not attend the proceedings before the Assessing Officer or file the appeal before the learned CIT(A) within time. Only upon receiving the assessment order and subsequent recovery-related communications did the assessee, with the help of family members and others, understand the gravity of the additions and the substantial demand raised. Thereafter, he engaged a qualified tax professional, who took steps to prepare and file the appeal. It was therefore prayed that the delay be viewed sympathetically and condoned.
7. The learned CIT(A) was not persuaded by the above explanation. He held that the appellant could not sleep over the statutory time limit for filing the appeal and, since no timely action was taken, the assessment order could not be challenged beyond limitation. Relying on various judicial precedents, he dismissed the assessee’s appeal on the ground of delay.
8. Aggrieved, the assessee is before us. Shri Shankar, Chartered Accountant, submitted that the learned CIT(A) ought to have condoned the delay and decided the appeal on merits. He further submitted that, since the appeal arose from an order passed under section 144 of the Act, the learned CIT(A) could have restored the matter to the file of the Assessing Officer with directions to decide the issue on merits after granting the assessee an opportunity of being heard. He therefore contended that the orders of the lower authorities are unsustainable.
9. Shri Ganesh R. Ghale, learned Standing Counsel for the Department, supported the orders of the lower authorities.
10. We have carefully considered the rival contentions. The assessee is a 66-year-old retired employee of HMT Watches, having served there for 34 years before taking voluntary retirement on 30 January 2016. He suffers from complete blindness, resulting in 100% permanent disability. During the relevant financial year, the assessee made fixed deposits aggregating to ₹46,45,000 out of accumulated salary savings and retirement benefits received from HMT Watches Ltd., which were credited directly to his bank account. Cash was withdrawn in connection with the proposed marriage of his daughter for the purchase of gold, clothing, and other marriage-related expenses. Due to unavoidable circumstances, the marriage was cancelled during the same financial year, and the cash withdrawn was redeposited into the bank account. The marriage was subsequently solemnized on 4 June 2017. In view of the assessee’s complete blindness, age, and serious health constraints, he could not access electronic records, which resulted in the assessment order making substantial additions. Considering these facts, we find that the assessment order passed under section 144 deserves to be restored to the file of the Assessing Officer. The order of the learned CIT(A) is not sustainable, as it does not adequately consider the assessee’s physical disability and consequent inability to access records. The judicial precedents relied upon by the learned CIT(A) are distinguishable on the facts of this case.
11. Accordingly, we restore the entire matter to the file of the learned Assessing Officer, with directions to the assessee to submit the necessary details. The learned Assessing Officer shall consider the assessee’s submissions in the light of the facts of the case and the assessee’s circumstances and shall decide the matter afresh in accordance with law.
12. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 27.07.2026.
