KANAKAPURA VENKATARAMANASWAMY MADHUSUDHAN KARTHIK,BENGALURU V. INCOME TAX OFFICER, WARD NO - 1, RAMAMNAGARA, KARNATAKA.

SA 5/BANG/2026

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The case involves a stay petition filed by Kanakapura Venkataramaswamy Madhusudhan Karthik under section 253(7) of the Income Tax Act, 1961, seeking relief from a disputed demand of Rs.8,12,208 out of a total demand of Rs.13,04,314 for the assessment year 2020-21. The demand arose from the taxation of exempt agricultural income, which the assessee claimed was purely agricultural income from selling produce like coconut and guava. The Income Tax Officer (ITO) had taxed this income under section 69A of the Act due to the absence of supporting documents such as the Kasan Credit Card and Mandi bills. The Tribunal considered the submissions of both parties, the amount already deposited by the assessee, and the prima facie merits of the case before granting the stay.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831099 (ITAT-BANGALORE)
• Duration Of Justice: 14 day(s)
• Appeal Type: Stay Application
• Pronouncement Date: 23-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 09-01-2026
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BALRAM R. RAO
• Keywords: Opportunity of being heard; Earning of tax free income; Application of stay

Judgement Text

"SA No.5/Bang/2025 Kanakapura Venkataramaswamy Madhusudhan Karthik, Bengaluru IN THE INCOME TAX APPELLATE TRIBUNAL “SMC’’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER SA No.5/Bang/2026 (Arising out of ITA No.2028/Bang/2025 Assessment Year: 2020-21 Kanakapura Venkataramaswamy Madhusudhan Karthik Gokul Nilaya BWSSB West S Kariyappa Layout Kanakapura Bengaluru 562 117 Karnataka PAN NO : ADUPV5834A Vs. ITO Ward 1 Ramanagara APPELLANT RESPONDENT Appellant by : Shri Balram R. Rao, A.R. Respondent by : Shri Sreenivasa Karthik, D.R. on behalf of Shri Ganesh Ghale, Standing Counsel for dept. Date of Hearing : 23.01.2026 Date of Pronouncement : 23.01.2026 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This stay petition u/s 253(7) of the Income Tax Act, 1961 (in short “The Act”) filed by the assessee seeking stay of disputed demand amounting to Rs.8,12,208/- out of Rs.13,04,314/- arising out of the notice of demand u/s 156 of the Act dated 7.12.2023 for the assessment year 2020-21. 2. Before us, the ld. A.R. of the assessee vehemently submitted that during the assessment year 2020-21, the exempt income claimed by the assessee, which are purely agricultural income generated out of his agricultural land by selling the agricultural Printed from counselvise.com SA No.5/Bang/2025 Kanakapura Venkataramaswamy Madhusudhan Karthik, Bengaluru Page 2 of 3 produce like coconut and guava are taxed u/s 69A of the Act on the ground that assessee could not provided the copy of Kasan Credit Card and other supporting documents/Mandi bills/Vouchers. Further, the ld. A.R. of the assessee submitted that prima facie the case of the assessee is in his favour and the assessee had already deposited Rs.4,92,106/-, out of the total demand of Rs.13,04,314/-, which constitute approx 37.7% of the total outstanding demand and accordingly, prayed that the stay of balance disputed demand amounting to Rs.8,12,208/- may be granted as the AO vide letter dated 13.11.2025 is pressing to pay the total outstanding demand immediately. 3. The ld. D.R. on the other hand, vehemently submitted that stay may be granted subject to the condition that the assessee pay 20% of the outstanding demand. 4. We have heard the rival submissions and perused the materials available on record. A perusal of the provision of section 254(1) of the Act exhibits that the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. After analyzing the fact and considering the submissions made by the ld. A.R. as well as ld. D.R. and material placed on record, we are of the considered opinion that the assessee had already deposited Rs.4,92,106/- out of the total outstanding demand as raised u/s 156 of the Act for the assessment year 2020-21 amounting to Rs.13,04,314/-. It is also submitted before us that prima facie the case is in favour of the assessee. 4.1 As per section 254(2A) of the Act, the Tribunal may after considering the merit of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed u/s 253(1) of the Act, for a period not exceeding 180 days from the date Printed from counselvise.com SA No.5/Bang/2025 Kanakapura Venkataramaswamy Madhusudhan Karthik, Bengaluru Page 3 of 3 of such order subject to the condition that the assessee deposits not less than 20% of the amount of tax, interest, fee, penalty or any other sum payable under the provisions of this Act, or furnishes security of equal amount in respect thereof and the Appellate Tribunal shall dispose of the appeal which the said period of stay specified in that order. 4.2 In the present case as the assessee had already paid more than 20% of the outstanding demand, it will be unjust on the part of the assessee, if we direct to pay further 20% of the total outstanding demand for the assessment year 2020-21. This being so, we direct the AO to keep in abeyance the collection of balance disputed demand amounting to Rs.8,12,208/- for the assessment year 2020- 21 for the period of 180 days from the date of this order or till the disposal of the appeal, whichever is earlier. It is ordered accordingly. 5. In the result, stay application filed by the assessee is allowed. Order pronounced in the open court on 23rd Jan, 2026 Sd/- (Prashant Maharishi) Vice President Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 23rd Jan, 2026. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "