While considering a writ petition the Delhi High Court observed that reopening assessment for cash deposits is valid if failed to substantiate with evidence and allows the petitioner to submit details of unexplained cash deposits before the appellate authority.
The Assessing Officer confirmed an income of Rs.57,17,430/- making an addition of Rs. 28,75,000/- to the returned income of the Petitioner, Sunil Jain under Section 69A of the Act on the ground that the Petitioner was not able to satisfactorily explain the source of the fund for the cash deposit of Rs.34,54,500/- made by him in his bank account held with the Corporation Bank during the demonetisation period.
The respondent issued a reassessment notice under Section 148 of the Act qua cash deposit of Rs.12,50,000/- made in the Punjab National bank. The Petitioner had furnished a detailed reply dated 10th January 2022 to the notices explaining that the cash deposits of Rs.12,50,000/- made in the joint accounts held by the Petitioner with his wife in Punjab National Bank and Bank of India were made out of the cash that was inherited by his wife upon the death of her father.
The reassessment order dated 27th March 2022 was passed under Section 147 read with Section 144B of the Act assessing the income of the Petitioner at Rs.69,67,430/- by making an addition of Rs.12,50,000/- on account of unexplained income. The assessing officer failed to consider the cash deposits of Rs.12,50,000/- in Punjab National Bank and Bank of India.
The Court observed that the contention of the petitioner that the details of the cash deposits had been disclosed by him in the income tax returns was not correct, as the assessee has only mentioned detail of cash deposited in the Corporation Bank account and has not mentioned cash deposits in any other bank accounts.
The bench consists of Mr Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the contentions and submissions advanced by the petitioner must be raised before the Appellate Authority.
Dr Pankaj Garg, Mr Yaksh Garg & Mr Vishal Chaudhary appeared for the petitioner and Mr Ruchir Bhatia appeared for the respondent.
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