The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) partly allowed the appeal and upheld the reopening of income tax assessment as there was due application of mind.
In this case, the assessee, Smt. Pozhaniappan Malliga had deposited an amount of Rs. 14,45,000 in her savings bank account. The Income Tax Returns (ITR) were not filed by the assessee and thus the case was reopened for assessment and notice under Section 148 was issued to the assessee for the Assessment Year (AY) 2011-12 on 24.03.2018. There was a failure on the part of the assessee to file the ITR and the assessee also did not submit any explanations.
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Thus, the assessing officer (AO) considered the above-mentioned money as unexplained money under Section 69A of the Income Tax Act, 1961. The assessee had approached the Commissioner of Income Tax (Appeals) [CIT(A)] for relief. The CIT(A) upheld the additions made by the AO. The assessee approached ITAT for relief.
The main issue in this case is the addition of Rs.14.60 Lacs in the form of unexplained cash deposits in the assessee’s savings bank account, which was initially assessed under Section 144 r.w.s. 147 of the Income Tax Act,1961.
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The counsel for the assessee submitted that there was no proper application of mind in granting approval for reopening a large number of cases in a single day.
The assessee also submitted that the deposits belonged to her husband, who was the primary account holder, and that she was merely a joint holder, and that the bank does not belong to the assessee.
The ITAT bench observed that it could find any infirmity in the reopening of the case of the appellant as there was due application of mind.
The bench further observed that the husband of the assessee had received contractual payment after the deduction of TDS.
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The ITAT bench noted that the husband had not declared interest earned on the account while filing his ITR, and no evidence was presented to show that the contractual payments received by the husband were in cash or linked to the same bank account.
The bench, comprising Shri Aby T. Varkey and Shri Manoj Kumar Aggarwal, allowed partial relief by granting the benefit of cash withdrawals amounting to Rs. 7.20 lacs.
Thus, the appeal was partly allowed.
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