Sourabh Aggarwal Vs DCIT (ITAT Delhi)
ITAT Delhi held that addition u/s 69A of the Income Tax Act unsustainable as cash deposit of INR 4.50 cr. is income under the scheme Pradhan Mantri Garib Kalyan Yojana (PMGKY) and the same is cleared by a valid declaration under the scheme.
Facts-
The sum and substance of the quarrel is that the ld. CIT(A) erred in upholding an addition made of Rs. 4.50 crores u/s 69A of the Income Tax Act ignoring the fact that once advance tax was duly paid on the sum deposited in the bank account, the said sum could not be taxed as income u/s 69A of the Act.
The other issue directly related to the aforementioned quarrel is that treating the declaration made under Pradhan Mantri Garib Kalyan Yojna Scheme, 2016 [PMGKY] as invalid would not make cash deposit of Rs. 4.50 crores during the period of demonetization in the bank account maintained by the assessee is taxable as income from other sources u/s 69A of the Act.
Conclusion-
The assessee has complied with all the mandatory conditions mentioned hereinabove. It is also provided that the declaration shall be void and deemed never to have been made where declaration has been made by misrepresentation or suppression of facts or without payment of tax and surcharge or penalty or without depositing requisite amount in the PMGKY Scheme, 2016 and in such cases, all provisions of the Act including penalty and prosecution shall apply accordingly. The facts discussed elsewhere clearly show that the assessee does not fall in the circumstances mentioned hereinabove.
Held that the assessee has made a valid declaration under the PMGKY Scheme, 2016 and has duly paid taxes/penalty and has also deposited requisite amount under the PMGKY Scheme, 2016. By no stretch of imagination provisions of section 69A can be applied on the aforementioned facts. Therefore, the entire addition made by the AO and confirmed by the ld. CIT(A) do not hold any water and deserve to be deleted.
FULL TEXT OF THE ORDER OF ITAT DELHI
The above captioned 24 appeals are filed by 8 different appellants, preferred against 3 set of orders each pertaining to Assessment Year 2017-18. Since all these appeals were heard together and common issues are involved, therefore, these are being disposed of by this common order for the sake of convenience brevity.
2. The representatives of both the sides agreed that the facts in the case of Shri Sourabh Aggarwal, Legal Heir of Smt. Kamala Agarwal may be considered as the facts in all other appeals are identical and on such concession, we are considering the facts in ITA No. 962/DEL/2022 alongwith ITA No. 677/DEL/2022 and ITA No. 919/DEL/2022 for disposal of the captioned appeals.
3. We will first address to the issues raised in ITA No. 962/DEL/2022.
4. The impugned assessment order is dated 17.12.2019 framed u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as ‘The Act’] and the order of the first appellate authority is that of CIT(A)-3, Gurgaon dated 31.03.2022.
5. The sum and substance of the quarrel is that the ld. CIT(A) erred in upholding an addition made of Rs. 4.50 crores u/s 69A of the Act ignoring the fact that once advance tax was duly paid on the sum deposited in the bank account, the said sum could not be taxed as income u/s 69A of the Act.
6. The other issue directly related to the aforementioned quarrel is that treating the declaration made under Pradhan Mantri Garib Kalyan Yojna Scheme, 2016 [PMGKY] as invalid would not make cash deposit of Rs. 4.50 crores during the period of demonetization in the bank account maintained by the assessee is taxable as income from other sources u/s 69A of the Act.
7. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules.
8. The entire quarrel can be summed up by referring to the concluding para of the assessment order which reads as under:
“The reply filed by assessee has been considered but not found tenable as the case laws explained by the assessee have no direct relevance with the issue involved in this case and assessee failed to produce the certificate issued by the Pr.CIT (Central) Gurugram. This is important to mention here that the assessee paid the taxes, surcharge & penalty on or before 31.03.2017 and also made 25% compulsory deposit under PMGKO on or before 30.04.2017. However, it was noted that part of the payments were made by the assessee before the date of notification of PMGKY Scheme – 2016 on 17.12.2016 under the minor head 100 are not accepted by the system while uploading the Manual Form No. 1 online in the e-filing portal. On perusal of the facts of the case, it is found that there is no competent of Bonafide errors involved in this matter. In view of the all above, and non furishing the certificate issued by the Pr. CIT (Central) Gurugram the declaration made by the above assessee under PMGKY Scheme, 2016 cannot be treated as valid. Therefore total cash amounting to Rs. 4,50,00,000/- deposited by the assessee during demonetization period is considered as her income from other sources and added back to her taxable income for the A.Y. 2017-18 u/s 69A of the Income Tax Act, 1961. I am satisfied that assessee has under reported / misreported her income, therefore penalty notice u/s 274 r.w.s 270A is being issued separately. “
9. The chronological events resulting into the aforementioned findings of the Assessing Officer are as under:
(i) Return of income was filed on 24.07.2017 declaring an income of Rs. 17,40,150/-;
(ii) Return was selected for scrutiny assessment and detailed questionnaire was issued on 09.09.2019 alongwith notice u/s 142(1) of the Act;
(iii) The assessee was asked to furnish requisite details as under:
“Please refer to your return of income filed on 24.07.2017. You are aware that your case is selected in scrutiny and notice u/s 143 (2) has already been issued. In order to complete the assessment proceedings, you are requested to furnish the following details/information alongwith supporting documentary evidences on or before 24.09.2019 through e-filing.
There is large value of cash deposits by you during demonetization period as compared to returned income as cash deposits are significantly large as compared to returned income. Furnish details of all cash deposits along with source of investment thereof. Also furnish the details of total exempt income and agricultural income earned by you during the year under consideration along with source of investment to earned said income.”
(iv) The assessee filed her reply on 19.10.2019 and furnished details of cash deposited as under:
