KRISHNAPPA SATISH KUMAR ,BENGALURU vs. DCIT, CENTRAL CIRCLE-1(1), BANGALORE

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER

ITA No.2371/Bang/2025 Assessment Year: 2016-17

Sri Krishnappa Satish Kumar, The Dy. Commissioner of Vs. 164, 2nd Main Road, 1st Block, Income Tax, 2nd Strage, RMV Extension, Central Circle – 1(1), Bengaluru – 560 094. Bengaluru. PAN – ACZPK 8076 F APPELLANT RESPONDENT Assessee by : Shri V Srinivasan, Advocate Revenue by : Shri N Balusamy, JCIT (DR) Date of hearing : 25.05.2026 Date of Pronouncement : 26.05.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

The present appeal by the assessee is directed the against the order of the learned Commissioner of Income Tax (Appeal)-11 Bengaluru (hereafter learned CIT(A)) for the assessment year 2017-18 wherein the learned CIT(A) dismissed the assessee’s appeal by holding that the same is not maintainable under section 249(4) of the Income Tax Act, 1961 (hereafter the Act) on account of failure to deposit admitted tax.

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carried out in the case of one Sri K Somashkar Reddy as on 11th February 2018 wherein a copy of sale deed in relation to sale of land by the appellant assessee to Sri K Somashkar Reddy was found. In connection with the same, the residential premises of the assessee was also covered and his statement u/s 132(4) of the Act was also recorded.

3.1 Subsequently notice under section 153C of the Act was issued based on finding of search materials. The assessee in response to 153C notice filed return of income as on 19th March 2019 declaring the same income as declared in return filed u/s 139(4) of the Act. The assessment was completed under section 153C r.w.s. 143(3) vide order dated 29th December 2019 wherein the claim of the assessee for the brought forward losses and unabsorbed depreciation was disallowed.

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8.1 Before us, the learned AR submitted that an identical issue had arisen in the own case of the assessee for A.Y. 2017-18 wherein the Hon’ble Karnataka High Court in ITA No. 248 of 2024 restored the matter to the file of the learned CIT(A) for fresh adjudication on merits. It was submitted that the facts involved in the present year are identical and therefore the issue is squarely covered by the aforesaid judgment of the Hon’ble jurisdictional High Court.

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8.2 We have carefully gone through the judgment of the Hon’ble Karnataka High Court placed on record by the assessee. The Hon’ble High Court after considering the provisions of section 249(4)(a) of the Act, the factual background of assessment framed under section 153C of the Act and the subsequent developments regarding adjustment of seized assets towards admitted tax liability, restored the matter to the file of the learned CIT(A) for fresh consideration on merits subject to proof of payment/adjustment of admitted tax. For ready reference and better clarity, the relevant observations of the Hon’ble Karnataka High Court are reproduced hereinbelow: 4.2 The assessee has preferred the present appeal raising various contentions. It is contended that the admitted tax liability arises pursuant to the return filed in response to the notice under Section 153C of the Act. The assessee has also questioned the legality of the said notice and contends that, if the notice is held to be unsustainable in law, no admitted tax would be payable. 5. Sri.U.A. Madhusudhan, learned counsel for the appellant submits that the Tribunal has failed to consider the contentions urged on behalf of the appellant. It is contended that if the notice issued under Section 153C of the Act is held to be void and unsustainable in law, the income admitted in the return filed pursuant thereto would also not survive and, consequently, no admitted tax liability would arise. 5.1 Learned counsel further submits that the appellant has no financial means to pay the admitted tax. It is stated that the entire jewellery and other assets belonging to the assessee are seized by the Revenue authorities. It is also submitted that a letter dated 23.09.2025 has been addressed to the Assessing Officer, along with a memo filed before this Court, requesting that the seized gold be auctioned and the sale proceeds be appropriated towards the admitted tax liability. 6. Per contra, Sri Y.V. Raviraj, learned Senior Standing Counsel for the respondent-Revenue, submits that, in response to the notice issued under Section 153C of the Act, the assessee has admitted the tax liability in the return so filed. It is contended that Section 249(4)(a) of the Act mandates payment of the admitted tax as a condition precedent for the CIT(A) to entertain the appeal. In other words, payment of the admitted tax is mandatory for conferring jurisdiction upon the CIT(A) to admit the appeal. It is further submitted that the orders passed by the CIT(A) and the Tribunal are justified and are in consonance with the judgments of this Court. 6.1 With regard to the letters dated 12.09.2025 and 17.09.2025, produced along with the memo dated 23.09.2025, learned Senior Standing Counsel submits that the process of auctioning the seized jewellery is underway and that the sale proceeds realized therefrom would be adjusted towards the tax liability. 7. Having considered the submissions made by learned counsel for the respective parties, we notice that the assessment in the present case has been

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completed under Section 153C of the Act. Aggrieved thereby, the assessee preferred an appeal before the CIT(A). Section 249(4) of the Act mandates that no appeal shall be admitted unless the assessee has paid the tax due on the income returned by him. 8. In the present case, the assessee filed a return of income on 19.03.2019 declaring a total income of Rs.3,12,21,160/-. The tax payable on the income so returned has admittedly not been discharged. Unless the admitted tax is paid, the CIT(A) would have no jurisdiction to admit the appeal and consider the same on merits. 9. The aforesaid legal position has been reiterated by this Court in D. Komalakshi v. DCIT [(2007) 292 ITR 99 (Kar)] and Smt. M.R. Prabhavathy v. ACIT [(2003) 262 ITR 501 (Kar)]. Similar observations have also been made by the Hon’ble Supreme Court in CIT v. Pawan Kumar Laddha [(2010) 324 ITR 324 (SC)]. The orders passed by the CIT(A) and the Tribunal are in conformity with the provisions of Section 249(4)(a) of the Act and the judicial pronouncements referred to herein. 10. In view of the foregoing discussion, we are of the considered opinion that no substantial question of law arises for consideration in this appeal. Hence, the appeal does not merit admission. 11. In the interregnum, it is brought to our notice that the assessee has made a representation to the Assessing Officer, copies of which are placed on record along with the memo dated 23.09.2025. A perusal of the said letters indicates that the assessee has requested the Assessing Officer to auction the seized property and jewellery and to appropriate the sale proceeds towards the self- assessment tax dues. Learned Senior Standing Counsel appearing for the Revenue submits that the process of auctioning the jewellery, as requested by the assessee, is underway and that the amount realized would be adjusted towards the admitted tax liability. 12. At this stage, if the requirement under Section 249(4)(a) of the Act is satisfied, there would be no impediment to remanding the matter to the CIT(A) for fresh adjudication on merits. If the assessee is not afforded an opportunity to pursue the statutory appeal, the assessee would be left without an effective remedy under the Act. 13. In the light of the above, the following: ORDER (i) The appeal is allowed-in-part. (ii) The order dated 01.08.2023 in Appeal No. CIT(A)-11/BNG/10609/2019- 20 and the order passed by the Tribunal in ITA No.731/Bang/2023 dated 28.02.2024 are set aside. (iii) The matter is remitted to CIT(A) for fresh consideration on merits. (iv) The CIT(A) shall consider the appeal on merits only on proof of payment of admitted tax either from the Assessing Officer or by the assessee. (v) This Court has not expressed any opinion on the merits of the matter. (vi) All contentions of the parties are kept open.

8.3 Respectfully following the judgment of the Hon’ble jurisdictional High Court in the own case of the assessee, we deem it proper to set aside the impugned order of the learned CIT(A) and restore the matter back to

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his file for fresh adjudication on merits in accordance with law and in the light of the above judgment of Hon’ble High Court discussed above. Needless to state, the assessee shall be afforded adequate opportunity of being heard and shall be at liberty to place all supporting materials and legal contentions before the learned CIT(A). Accordingly, the ground of appeal of the assessee is allowed for statistical purposes.

Order pronounced in court on 26th day of May, 2026

Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 26th May, 2026 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore