Rajiv Kumar Vs DCIT (ITAT Delhi)
“Cash Deposit Remains Unverified” Is Not a Reason to Believe Income Escaped Assessment: Delhi ITAT Quashes Reopening
Information about a bank deposit may call for examination, but an Assessing Officer cannot treat an unverified deposit as escaped income without recording a rational link between the information and that conclusion. Applying this principle, the Delhi ITAT quashed the reassessment in Rajiv Kumar v. DCIT, ITA No. 3538/Del/2026, for AY 2011–12. The order was pronounced on 29 September 2026.
The Only Reason Recorded for Reopening
The assessee had filed a return declaring income of ₹10,78,290. The AO subsequently received AIR/CIB information showing cash deposits of ₹22,50,000 in the assessee’s Axis Bank savings account. In the reasons recorded for reopening, the AO compared the deposit with the returned income and stated that the nature and source of the cash deposits remained “unverified”. He then concluded that ₹22,50,000 had escaped assessment.
After obtaining approval, the AO issued a notice under Section 148 on 28 March 2018. The assessee responded with a return and participated in the reassessment proceedings. The eventual order, dated 27 December 2018, added the Axis Bank deposits as unexplained money under Section 69A. It also made additions of ₹23 lakh and ₹14,48,599 concerning credits in other bank accounts, and ₹36,17,955 towards long-term capital gains on mutual fund units.
