Channakeshava Vs DCIT (ITAT Bangalore)
Bengaluru ITAT Restores Search Assessments Despite Repeated Non-Compliance, Subject to ₹50,000 Cost Per Appeal
The Bengaluru Bench of the ITAT held that although an assessee who repeatedly failed to appear before both the Assessing Officer and the PCIT(A) cannot be permitted to prolong proceedings through a casual approach, the interests of justice nevertheless warranted one final opportunity to contest the additions on merits. The Tribunal observed that, in the absence of effective participation by the assessee, there was no proper adjudication on merits by the lower authorities, making a fresh examination necessary.
The appeals arose from search assessments under section 153A involving substantial additions across six assessment years, including unexplained investments, unexplained expenditure under section 69C, capital gains, agricultural income treated as income from other sources, and unexplained cash credits. The assessee sought to justify his earlier non-appearance through affidavits filed by himself and his accountant. However, the Tribunal found the explanations unsatisfactory and held that the persistent non-compliance reflected a casual approach towards the assessment and appellate proceedings.
Balancing procedural discipline with the principles of natural justice, the Tribunal directed the assessee to pay costs of ₹50,000 for each appeal to the Prime Minister’s National Relief Fund within 90 days. Subject to such payment, all six appeals were restored to the file of the Assessing Officer with directions to examine the assessee’s explanations, make necessary enquiries, and pass fresh orders on all issues after granting a reasonable opportunity of hearing. The appeals were allowed for statistical purposes.
Cases Discussed
- B. Ramachandhiran v. CIT, Chennai (Madras HC), [2014] 43 taxmann.com 430 (Madras)
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. The assessee/appellant, Mr. CHANNAKESHAVA, has filed these 6 appeals against the consolidated appellate order dated 04-Nov-2025 passed by the learned Principal Commissioner of Income Tax (Appeals)-11, Bengaluru [the ld. PCIT(A)] for Assessment Years 2013-14 to 2017-18 and 2019-20. By the said order, the ld. PCIT(A) dismissed the assessee’s appeals against the assessment order dated 16.03.2016 passed by the ACIT, Central Circle 1(2), Bangalore [the AO] under section 153A read with section 144 of the Income-tax Act, 1961 [the Act].
