Kavita Samtani Vs DCIT (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT) in Jaipur has set aside the assessment order issued by the Assessing Officer (AO) and upheld by the Commissioner of Income Tax (Appeals) [CIT(A)] for Smt. Kavita Samtani, an assessee involved in a series of assessments related to financial years 2013-14 and 2015-16 through 2018-19. The decision concluded on October 22, 2024, follows a detailed examination of procedural adherence, alleged financial discrepancies, and the validity of issued notices under the Income Tax Act.
Background and Appeal Details
Kavita Samtani, a business owner running a beauty salon, appealed against five assessment orders stemming from a search and seizure operation on March 29, 2018. The search targeted her residential property, her husband’s business location, and other family properties. During the operation, various financial documents, ledgers, and loose papers were seized, including a ledger involving financial transactions with M/s Mohan Broker Agency, a firm managed by her husband, Deepak Samtani.
The assessments raised questions on cash transactions recorded in the ledger of M/s Mohan Broker Agency for FY 2012-13. Transactions amounting to ₹2,90,000 were noted as credits to M/s Mohan Broker Agency, alleged to exceed the declared income of Kavita Samtani for the relevant period. The AO treated these amounts as unexplained investments under Section 69 of the Income Tax Act, thereby prompting additional tax liabilities.
Points of Contention and Tribunal’s Observations
One of the main points raised by the appellant’s representative was the procedural aspect under which notices should have been issued. Citing Section 153C, the appellant argued that any notice issued to a third party must adhere to this section, which mandates the application of assessment protocols under Section 153A. The representative also highlighted that the appellant was not directly asked to clarify the cash deposits, despite the AO’s claim of having provided such an opportunity.
