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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF SEPTEMBER, 2015
PRESENT
THE HON'BLE MR. JUSTICE VINEET SARAN
AND
THE HON’BLE MR. JUSTICE B.MANOHAR
ITA NO.428/2014
BETWEEN
SHRI S.JAGADEESHWARA REDDY, AGED ABOUT 55 YEARS NO.71, 2ND FLOOR, R.J.GARDEN, OUTER RING ROAD, MARATHAHALLY, BANGALORE-560 037. ... APPELLANT
(BY SMT.VANI H., ADV.)
AND
DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(3) BANGALORE.
...RESPONDENT
(BY SRI K.V.ARAVIND, ADV., & SRI E.I.SANMATHI, ADV.,)
THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 17.01.2014 PASSED IN ITA NO.66/BANG/2011, FOR THE ASSESSMENT YEAR 2005-06 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE IMPUGNED ORDER OF THE ITAT ETC.,
THIS ITA COMING ON FOR ORDERS THIS DAY, VINEET SARAN J. DELIVERED THE FOLLOWING:
JUDGMENT
Heard Smt.Vani H. learned counsel for the appellant as well as Sri K.V.Aravind, learned counsel for the respondent and perused the record. With the consent of learned counsel for the parties, this appeal has been heard and is being finally disposed of at this stage.
Challenging the order of the Tribunal dated 17.01.2014 the appellant has filed this appeal raising the following substantial questions of law: “i. Whether on the facts and circumstances of the case the Appellate Tribunal in Law ought to have looked into all the aspects of the search and satisfied that there was a valid search in terms of Section 132 of the Income-Tax Act on the appellant for assumption of jurisdiction by the Assessing Officer under Chapter XIV-B of the Income Tax Act, 1961? ii. Whether on the facts and circumstances of the case the Appellate Tribunal erred in law in not considering the validity of levy of interest under Section 234A and Section 234B of the Income Tax Act?
iii. Whether on the facts and circumstances of the case the Appellate Tribunal erred in law while affirming the addition of Rs.43,34,502/- as unexplained income ignoring the explanation offered by the Appellant?”
The primary question raised in this appeal is with regard to the validity of search conducted by the Income Tax authorities under Section 132 of the Income Tax Act, 1961, which question has been raised in this appeal for the first time.
Sri K.V.Aravind, learned counsel for the respondent submits that the Tribunal would be the appropriate authority to first decide the question of validity of search as has been held by this Court in the case of C.Ramaiah Reddy –vs- Assistant Commissioner of Income Tax reported in (2011) 244 CTR 126. 5. Learned counsel for the appellant, however, has no objection to the matter being remanded to the Tribunal for deciding the first substantial question of law. It is, however, submitted that the second substantial question of law, though
raised before the Tribunal, has not been decided as it has been stated in paragraph 2.1 of the order of the Tribunal that the additional grounds filed by the assesseee were not traceable. In our view, the second substantial question of law may be decided by the Tribunal. 6. In view of the fact that we are not adjudicating this case on merits and remanding the matter to the Tribunal, we are not inclined to enter into the merits of the third substantial question of law, which is left open to the assessee to challenge the same in case the Tribunal decides the other two questions against the assessee, and if the assessee is so advised.
With the aforesaid directions, the appeal is disposed of.
Sd/-
JUDGE
Sd/-
JUDGE