THASIL BABU,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), BANGALORE

ITA 784/BANG/2025Status: DisposedITAT Bangalore24 September 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Assessing Officer (AO) had added incomes based on the assessee's statement under Section 132(4) for AYs 2018-19 and 2019-20, as these incomes were not reported for those years. The assessee's primary contention was that these incomes were realized and offered to tax in AY 2020-21, and since the AO accepted the return for AY 2020-21, taxing the same income again for AYs 2018-19 and 2019-20 would amount to double taxation. The Tribunal observed that the assessee could not challenge the AY 2020-21 assessment order directly as it was based on the returned income, leading to the filing of a Section 264 application before the PCIT. This application was dismissed, and the dismissal order is currently under challenge before the Karnataka High Court in W.P. No. 21977/2025, which is pending. The Tribunal acknowledged that the outcome of the writ petition would significantly impact the present appeals. In the interest of justice and to avoid hardship to the assessee, the Tribunal decided to set aside the orders of the CIT(A) and remit the appeals back to the CIT(A). The CIT(A) is directed to await the outcome of the writ petition before proceeding with the appeals in accordance with the law. The issue of penalties under Section 270A was implicitly linked to the quantum additions.

What were the facts?

The assessee, Shri Thasil Babu, filed appeals before the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, challenging quantum and penalty orders for Assessment Years (AYs) 2018-19 and 2019-20. These orders were passed by the NFAC, Delhi. The assessee's case arose from a search under Section 132 of the Income Tax Act, 1961, on 10/10/2019, which covered his residence. Subsequently, assessments were completed under Section 153C, with additions to declared income and penalties imposed under Section 270A. The assessee contended that incomes added for AYs 2018-19 and 2019-20 were already reported and accepted for AY 2020-21, leading to double taxation. The assessee also filed an application under Section 264 before the PCIT regarding the AY 2020-21 assessment, which was dismissed. This dismissal led to a pending writ petition before the Karnataka High Court.

What were the issues?

1. Whether the addition of incomes for AYs 2018-19 and 2019-20, based on a statement recorded under Section 132(4), is valid when the same incomes were reported and accepted for AY 2020-21, leading to double taxation, as per Section 153C and Section 139(4). 2. Whether the penalty levied under Section 270A is correct, given the assessee's contention that the entire income was declared in AY 2020-21, and therefore, there was no misreporting of income. Assessee's Contentions: The assessee argued that adding incomes for AYs 2018-19 and 2019-20, which were already reported and accepted for AY 2020-21, constitutes double taxation and should be set aside. Regarding penalties under Section 270A, the assessee submitted that since the income was declared in AY 2020-21, the levy of penalty for misreporting is incorrect. The assessee also highlighted the pendency of a writ petition before the Karnataka High Court challenging the dismissal of a Section 264 application, which could resolve the issue. The assessee prayed for the appeals to be remitted to the CIT(A) pending the outcome of the writ petition. Revenue's Contentions: The revenue contended that assessments were correctly made based on the assessee's statement that the commission income related to AYs 2018-19 and 2019-20. The revenue argued that the assessee had suppressed income, justifying the penalties under Section 270A, and therefore, prayed for the dismissal of the appeals.

Which sections of the Income-tax Act were involved?

Section 139(4),Section 132,Section 153C,Section 270A,Section 132(4),Section 264

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.

PER BENCH

These are the appeals filed by the assessee challenging the separate quantum and penalty orders of the NFAC, Delhi all dated 28/01/2025 in respect of the A.Ys. 2018-19 and 2019-20. 2. The brief facts of the case are that the assessee is an individual and filed his return of income u/s. 139(4) of the Act. Based on the search action initiated u/s. 132 of the Act on 10/10/

The order continues below.

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