Kasthuri Medias Private Limited Vs ACIT (Karnataka High Court)
The petitioner challenged an order (Annexure-E) invalidating its income tax return for the assessment year 2024–2025 and sought a direction to process the return. The return was invalidated on the ground that the taxpayer had declared gross receipts or income exceeding Rs. 10 crores under the head “Profits and Gains of Business or Profession” without getting its books of account audited under Section 44AB of the Income Tax Act.
The petitioner contended that its turnover could not be construed as exceeding Rs. 10 crores, as part of the income comprised sale of assets, which cannot be treated as turnover. It was submitted that supporting material was available to demonstrate that the income was in fact below Rs. 10 crores and, therefore, the requirement of audit under Section 44AB would not apply.
Counsel for respondent No. 2 submitted that the communication at Annexure-E was computer-generated from the Centralized Processing Centre and suggested that the petitioner be heard and an appropriate report be forwarded thereafter.
Taking note of the petitioner’s contention and the stand of the respondents, the Court set aside the order at Annexure-E invalidating the return and remitted the matter to respondent No. 2. The petitioner was directed to appear on 16.03.2026 to demonstrate that its turnover was below Rs. 10 crores and that Section 44AB audit was not applicable. Respondent No. 2 was directed to consider the explanation and forward a report with its opinion to respondent No. 1. The petition was accordingly disposed of.
