Savitramma Vs ITO (ITAT Bangalore)
Bangalore ITAT Grants Disabled Agriculturist Fresh Opportunity to Explain ₹14.07 Lakh Bank Deposits and Investments
The assessee, a woman suffering from more than 75% permanent locomotor disability, claimed that her family was engaged in agriculture and that cash receipts arose from the sale of tomatoes, mangoes and other agricultural produce through a registered APMC commission agent.
The assessee had not filed her return for AY 2020-21. Reassessment proceedings were initiated based on information regarding cash deposited in her bank account. The AO made the following additions:
- ₹4,50,000 as unexplained cash deposits under section 69A;
- ₹9,57,138 as unexplained investment in time deposits under section 69; and
- ₹40,269 as interest income.
The total income was accordingly assessed at ₹14,47,407. The CIT(A) dismissed the assessee’s appeal without examining the merits because it was filed with a delay of 113 days. The delay was explained as having arisen because her consultant misplaced the assessment papers, and she became aware of the lapse only upon receiving the demand notice.
The ITAT noted that the assessee had placed on record her disability certificate, RTCs and APMC sale bills. Considering her disability and the supporting evidence produced, the Tribunal held that, in the interest of justice, she deserved another opportunity to establish that the cash and time deposits originated from agricultural income.
Accordingly, the assessment was set aside and the matter restored to the jurisdictional AO for de novo adjudication after examining the evidence. The assessee was directed to cooperate and furnish the documents sought by the AO. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The assessee has filed the present appeal against the impugned order dated 18/02/2026, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2020-21.
2. The assessee has raised the following grounds of appeal: –
1. Failure to Adjudicate on Merits and Breach of Audi Alteram Partem
2. The Assessment Order is Ex-Parte, Passed in Violation of Principles of Natural Justice, and is therefore Void Ab Initio
3. The Cash Deposit of Rs. 4,50,000/ – Represents Agricultural Income and Cannot be Treated as Unexplained Money under Section 69A
4. The Time Deposit Investment of Rs. 9,57,138/- Cannot be Treated as Unexplained Investment under Section 69
5. Application of Section 115BBE is Illegal and Confiscatory when the Source of Income is Identified and is Agricultural
6. The Reassessment Proceedings under Section 147/148 are without Valid Jurisdiction
7. The Appellant is Entitled to Deduction under Section 80U which was Completely Ignored by the Assessing Officer
8. Interest under Sections 234A, 234B, and Fee under Section 234F are Wrongly Levied
9. Penalty Proceedings under Sections 271AAC(1) and 270A are Premature and Without Basis
10. The CIT(A) Order is Cryptic, Non-Speaking and fails to Deal with Substantive Grounds Raised by the Appellant
3. During the hearing, the learned Authorised Representative (“learned AR”) submitted that the assessee is engaged in agriculture and is a person with 75% Permanent Locomotor Disability as certified by the concerned authority. It was further submitted that the assessee and her entire family are engaged in agriculture. It was also submitted that after the death of her husband on 10/12/2025, the assessee is overseeing all the agricultural activities. The learned AR submitted that the agricultural activities primarily include growing tomatoes, mangoes and other produce. Further, sales of agricultural produce were regularly made at the APMC Yard, Bagepalli, through a registered commission agent. The learned AR submitted that the requisite details regarding the cash deposit could not be furnished before the lower authorities, and given an opportunity, the assessee will furnish all the details as the entire cash deposits are from the sale of agricultural produce. As regards the delay in filing the appeal before the learned CIT(A), the learned AR submitted that the consultant of the assessee misplaced the papers in his office and only on receipt of the demand notice, the assessee came to know that the appeal against the assessment order had not been filed. Thereafter, the necessary steps were taken to file the appeal before the learned CIT(A), which resulted in the delay.
4. On the other hand, the learned Departmental Representative (“learned DR”) vehemently relied upon the order passed by the lower authorities.
5. We have considered the submissions and perused the material available on record. The brief facts of the case are that the assessee is an individual and, for the year under consideration, did not file her return of income. Pursuant to the information received under the Risk Management Strategy formulated by the CBDT, it was noticed that the assessee had deposited cash during the year under consideration in a bank account.
Accordingly, notice under section 148 of the Act was issued on 28/03/2024. However, the assessee did not respond to the said notice. Further, the assessee also remained non-responsive to the statutory notices issued under section 142 (1) of the Act. In response to the notice issued under section 133(6) of the Act, the Karnataka Gramin Bank submitted the bank account statement of the assessee along with the interest certificate for the period from 01/04/2019 to 31/03/2020. Upon perusal of the bank statement, it was observed that the cash of INR 4,50,000 was deposited by the assessee. Further from the interest certificate furnished by the bank, it was observed that the assessee received saving bank interest of Rs. 3232 and fixed deposit interest of INR 37,027. Due to the continuous non- compliance, a notice was issued to the assessee to show cause as to why the cash deposit of INR 4,50,000 should not be treated as unexplained money under section 69A of the Act. Further, the assessee was asked to show cause as to why the total interest income of INR 40,269 received during the year should not be taxed under the head “Income from Other Sources”. Further clarification was sought on the investment in time deposits amounting to INR 9,57,138. In response to the show-cause notice, the assessee submitted that she maintains only one savings bank account with Karnataka Gramin Bank, and the cash deposit of INR 4,50,000 in this account constitutes agricultural income derived from her husband’s land. It was further submitted that all major transactions in the account pertain to agricultural activities. In support of her claim, the assessee provided a copy of her marriage certificate, Aadhaar card, RTC (Record of Rights, Tenancy and Crops) document of her husband. As the assessee did not provide any clarification regarding the investment of INR 9,57,138 in time deposits with Karnataka Gramin Bank, the assessee was provided another opportunity to furnish the necessary details.
6. Since the assessee did not furnish complete details, the Assessing Officer (“AO”) proceeded to complete the assessment on best judgment basis and vide order dated 10/03/2025 passed under section 147 read with section 144 of the Act computed the total income of the assessee at INR 14,47,407 after making an addition of INR 4,50,000, bein g the cash deposited by the assessee in her bank account maintained with Karnataka Gramin Bank, under section 69A of the Act. Further, in the absence of any documentary evidence regarding the source of investment in the time deposits, the entire amount of INR 9,57,138 was added to the total income of the assessee under section 69 of the Act. The AO also made the addition on account of interest income amounting to INR 40,269 received by the assessee.
7. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee on the ground of delay of 113 days. Being aggrieved, the assessee is in appeal before us.
8. Having considered the submissions of both sides and perused the material available on record, it is evident that in the present case, complete details could not be furnished before the AO in support of the claim that the cash deposited in the bank account and time deposit is on account of the agricultural income earned by the assessee. From the documents placed on record, we find that the assessee is more than 75% disabled, and in this regard, the certificate of disability issued by the Ministry of Social Justice and Empowerment has been placed on record. Further, the assessee has also furnished a copy of the RTC, APMC bills, etc. Therefore, we are of the considered view that in the interest of justice and fair play, the assessee deserves another opportunity to substantiate her claim that the deposits in the bank account are on account of the sale of agricultural produce. Accordingly, we restore the matter to the file of the jurisdictional AO for de novo adjudication after examination of the details furnished by the assessee. We further direct the assessee to fully cooperate in the assessment proceedings and furnish any other details as may be sought by the AO. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the assessee. With the above directions, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes.
9. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18-Aug-2026.
