THE PR COMMISSIONER OF INCOME TAX, vs. SHRI RAMESH RAMACHANDRA RAO,

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ITA/69/2024HC KarnatakaKAHC01005908202429 January 2026Bench: S.G.PANDIT,K. V. ARAVIND6 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that additions to a concluded assessment under Section 153C are unsustainable if not based on material found during the search. The High Court agreed, finding no substantial question of law.

What were the facts?

The Assessing Officer made additions to the assessee's concluded assessment under Section 153C based on material seized during a search in another case. The CIT(A) dismissed the assessee's appeal, but the ITAT set aside the additions.

What were the issues?

Whether additions made under Section 153C to a concluded assessment are valid if not based on incriminating material found during the search. Whether a substantial question of law arises for consideration.

Which sections of the Income-tax Act were involved?

Section 153C,Section 260A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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HC-KAR NC: 2026:KHC:5017-DB ITA No. 69 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF JANUARY, 2026 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL NO.69 OF 2024

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME-TAX, 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU - 560 095.

2.

THE ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1(1), PRESENT ADDRESS THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 3(1)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU - 560 095. …APPELLANTS

(BY SRI. SUSHAL TIWARI N, ADVOCATE)

AND:

SHRI. RAMESH RAMACHANDRA RAO, NO.98, SATHYANARAYANA LAYOUT, 3RD STAGE, 4TH BLOCK, BASAVESHWAR NAGAR,

Digitally signed by VALLI MARIMUTHU Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2026:KHC:5017-DB ITA No. 69 of 2024

BENGALURU - 560 079 PAN: ADFPF 5086H. …RESPONDENT

(BY SRI. ANNAMALAI.S., ADVOCATE)

THIS ITA/INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 14.02.2022 PASSED IN ITA NO. 160/BANG/2021, FOR THE ASSESSMENT YEAR 2011-2012 PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. 2. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 160/BANG/2021 DATED 14.02.2022 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-A AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1(1), BENGALURU.

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND

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HC-KAR NC: 2026:KHC:5017-DB ITA No. 69 of 2024

ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K.V.ARAVIND)

This appeal under Section 260A of the Income Tax Act, 1961 (for short, “the IT Act”) is filed by the appellants–Revenue challenging the order dated 14.02.2022 passed by the Income Tax Appellate Tribunal, Bengaluru, in ITA No.160/Bang/2021, (for short, “the Tribunal”) relating to the Assessment Year 2011–12. Along with the appeal, I.A. No.2/2024 has been filed seeking condonation of a delay of 574 days in preferring the appeal.

2.

Heard the learned counsel for the parties on delay and merits. 3. The Assessing Officer completed the assessment under Section 153C of the IT Act, by order dated 27.03.2015. The assessment was based on the seized material found during the course of search conducted in the case of M/s. R.R. Gold Palace Pvt. Ltd. The Assessing Officer determined the tax liability in the said assessment order. Aggrieved by the same, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], Bengaluru. The Appellate

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HC-KAR NC: 2026:KHC:5017-DB ITA No. 69 of 2024

Commissioner, by order dated 19.03.2021, dismissed the appeal. 3.1 Being further aggrieved, the assessee preferred an appeal before the Tribunal. The Tribunal, by the impugned order dated 14.02.2022, set aside the additions made on the ground that the additions to a concluded assessment were not based on any material found during the course of search. In doing so, the Tribunal placed reliance on the judgment of this Court in CIT v. IBC Knowledge Park Pvt. Ltd., reported in (2016) 385 ITR 346. 4. Sri Annamalai S., learned counsel appearing for the respondent–assessee, in addition to opposing the application for condonation of delay, submits that the order passed by the Tribunal is founded on the judgment of this Court in IBC Knowledge Park Pvt. Ltd. (supra), which has attained finality. Learned counsel further submits that the additions made in the assessment order passed under Section 153C of the IT Act, to a concluded assessment are not based on any material found during the course of search and, therefore, such additions are unsustainable in view of the law laid down by this

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HC-KAR NC: 2026:KHC:5017-DB ITA No. 69 of 2024

Court in IBC Knowledge Park Pvt. Ltd. (supra). Hence, it is contended that no substantial question of law arises for consideration by this Court. 5. Sri Sushal Tiwari N., learned Standing Counsel appearing for the appellants–Revenue, is not in a position to dispute the aforesaid submissions.

6.

The Tribunal has held that the additions made to a concluded assessment in proceedings under Section 153C of the IT Act, were not based on any material found during the course of search and, therefore, such additions are unsustainable. This Court, in IBC Knowledge Park Pvt. Ltd. (supra), has held that the incriminating material must relate to undisclosed income so as to empower the Assessing Officer to reopen or disturb a concluded assessment of the other person. In the absence of such incriminating material, disturbing a concluded assessment would be without any legal basis and is impermissible in law.

7.

In view of the law laid down by this Court in IBC Knowledge Park Pvt. Ltd. (supra), we are of the considered

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HC-KAR NC: 2026:KHC:5017-DB ITA No. 69 of 2024

view that no substantial question of law arises for consideration in this appeal.

8.

As we are not inclined to entertain the appeal due to no substantial question of law being involved, the application for condonation of delay, as well as the appeal, stand dismissed.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (K. V. ARAVIND) JUDGE

SMJ List No.: 1 Sl No.: 1

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