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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF FEBRUARY, 2026 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL No. 248 OF 2024 BETWEEN:
KRISHNAPPA SATISH KUMAR, AGED 70 YEARS, 164, 2ND MAIN, 1ST BLOCK, 2ND STAGE, RMV EXTENSION, BENGALURU-560094, PAN: ACZPK8076F. …APPELLANT (BY SRI MADHUSUDHAN U. A., ADVOCATE) AND:
THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1(1) C.R BUILDING, QUEENS ROAD, BENGALURU-560001. …RESPONDENT (BY SRI Y. V. RAVIRAJ, SENIOR STANDING COUNSEL)
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 28/02/2024 PASSED IN ITA No.731/BANG/2023, FOR THE ASSESSMENT YEAR 2017-2018.
Digitally signed by VINUTHA B S Location: High Court of Karnataka
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT. TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY THE TRIBUNAL IN ITA No. 731/BANG/2023 DATED 28.02.2024 FOR A.Y. 2017-18.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE K. V. ARAVIND )
Heard Sri. U.A. Madhusudhan, learned counsel for the appellant and Sri. Y.V. Raviraj, learned Senior Standing counsel for the respondent.
This appeal is filed by the assessee challenging the order dated 28.02.2024 passed in ITA No.731/Bang/2023 by the Income Tax Appellate Tribunal, “C” Bench, Bangalore (for short, ‘the Tribunal’), pertaining to the Assessment Year 2017– 18.
The appeal has raised the following substantial questions of law:
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
"1. Whether the Commissioner of Income Tax (Appeals) and the Tribunal are justified in dismissing the appeal in limine without appreciating the fact that the appellant has questioned the very jurisdiction of the Assessing Officer to invoke the provisions of Section 153C of the Act and consequently the provisions of section 249(4) of the Income Tax Act, 1961 are not applicable.
Whether the entire proceedings under Section 153C of the Act is bad in law and void ab initio as the conditions precedents to invoke the provisions of section 153C of the Act have not been complied with."
The assessee filed its return of income under Section 139 of the Income Tax Act, 1962 (for short, “the Act”), declaring a taxable income of Rs.3,09,13,660/-. A search under Section 132 of the Act was conducted in the case of the assessee on 11.02.2018. A search under Section 153A of the Act was also conducted in the case of one K. Somashekar Reddy. Based on the material found during the course of the search, a notice under Section 153C of the Act was issued to the assessee on 22.02.2019. In response thereto, the assessee filed a return of income on 19.03.2019 declaring a total income of Rs.3,12,21,160/-. The assessment was completed by the Assessing Officer on 29.12.2019 determining the tax liability.
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
4.1 Aggrieved by the order of assessment, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Bangalore (for short, “CIT(A)”). By order dated 01.08.2023, the CIT(A) dismissed the appeal on the ground that the admitted tax, as required under Section 249(4)(a) of the Act, had not been paid. The assessee carried the matter in appeal before the Tribunal. By the impugned order, the Tribunal dismissed the appeal.
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.
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
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
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.
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
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
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.
Having considered the submissions made by learned counsel for the respective parties, we notice that the assessment in the present case has been 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.
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
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
paid, the CIT(A) would have no jurisdiction to admit the appeal and consider the same on merits.
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.
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.
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
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
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.
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.
In the light of the above, the following: O R D E R (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.
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HC-KAR NC: 2026:KHC:9219-DB ITA No. 248 of 2024
(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.
Sd/- (S.G.PANDIT) JUDGE
Sd/- (K. V. ARAVIND) JUDGE
VBS List No.: 1 Sl No.: 11