Wrong Year's Data in Revised Return Creates Demand: ITAT Bangalore Directs AO-Level Verification Despite 58-Month Delay in Appeal

Case Background

Case Name: Sushma Ramesh Rao Vs DCIT (ITAT Bangalore)
Appeal Number: ITA No. 1912/Bang/2026
Date of Order: 21 September 2026
Assessment Year: 2019–20
Court: Income Tax Appellate Tribunal, Bangalore

Overview of the Dispute

A revised return is ordinarily the mechanism through which an assessee corrects an earlier filing. But what happens when that revised return, far from correcting anything, inadvertently imports income and TDS particulars from an entirely different assessment year — one that had not yet been filed at the time — thereby generating a fresh tax demand for a year whose original return had already been processed cleanly, with no demand raised?

This was precisely the factual matrix before the Bangalore Bench of the Income Tax Appellate Tribunal in Sushma Ramesh Rao Vs DCIT, ITA No. 1912/Bang/2026, decided on 21 September 2026, relating to Assessment Year 2019–20. The Tribunal, while acknowledging a substantial delay of over 58 months in filing the first appeal, found fault with the manner in which the appellate authority had disposed of the condonation request. It ultimately directed the jurisdictional Assessing Officer to undertake a cross-year verification of the returns and determine the correct tax liability.

Sequence of Events: What the Assessee Claimed

Original Return for AY 2019–20

The assessee, a salaried individual, filed her original return of income for Assessment Year 2019–20 on 30 August 2019, within the due date of 31 August 2019, declaring total income of ₹32,52,572. That return was processed under Section 143(1) of the Income-tax Act, 1961, on 10 December 2019, and was accepted without any demand or refund — indicating that the income as returned was accepted as correct.

The Problematic Revised Return

A revised return for the same assessment year was subsequently filed on 28 September 2020. The assessee's core contention was that this revised return was filed by her then Chartered Accountant without her knowledge or authorisation. More critically, she alleged that the return did not contain corrected particulars for AY 2019–20 at all — instead, it incorporated income and TDS figures belonging to AY 2020–21.

The Central Processing Centre processed this revised return and, by an intimation dated 8 December 2020 issued under Section 143(1) of the Income-tax Act, 1961, raised a tax demand of ₹2,15,625 (also referred to in the order as ₹2,15,630 in certain parts of the computation).

The order records that the CPC, while processing the revised return, denied a deduction of ₹60,000 claimed under Section 80GG and levied interest under Section 234B and Section 234C. The interplay of these processing adjustments with the assessee's explanation about the wrong year's figures formed a key part of what required factual examination.

The Corroborating Document: AY 2020–21 Return

The assessee pointed to an additional fact that, in her submission, lent objective support to her explanation. A belated return for AY 2020–21 was filed on 31 May 2021 — and she alleged that this return carried figures identical to those that had been wrongly incorporated in the revised return for AY 2019–20. If verified, this duplication across both returns would provide concrete documentary evidence that the same set of income and TDS particulars had been entered in both years, one of them erroneously.

Why the Appeal Before CIT(A) Was Filed Over 58 Months Late

The assessee explained that she had been entirely unaware that a revised return had been filed in her name. She stated that no communication or intimation from the Income Tax Department had reached her following the December 2020 processing, and that the existence of the demand came to her notice only when her current tax consultant flagged it while assisting with the filing of her return for AY 2025–26.