Income Tax Addition of ₹52.3 Lakh u/s 69A: ITAT Orders Remands for Enquiry Since Assessee Was Not Grossly Non-compliant [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has remanded an income tax addition of ₹52,34,050 which was made under section 69A of the Income Tax Act, 1961 for fresh adjudication. The Tribunal held that the assessment was made under section 144 due to partial compliance by the assessee and could not be considered grossly non-compliant.

The assessee-appellant, Genius Money Changer, a partnership firm engaged in currency exchange, had not filed its return of income for Assessment Year(AY) 2017–18 within the prescribed time under Section 139(1) of the Act.n response to notices issued under Section 142(1), the assessee filed a return which declared an income of ₹81,603.

The Assessing Officer (AO) treated the return as invalid due to non compliance within the time period in the notice under Section 142(1) .The AO ultimately framed the assessment order under section 144 of the Act whereby the income returned as per ITR was ignored and addition of ₹ 52,34,050 was made under section 69A of the Act towards unexplained money.

The assessee appealed the addition and claimed the amount was already offered to tax and therefore resulted in double taxation.

On appeal, the Commissioner of Income Tax (Appeals) ( CIT(A) ) upheld the assessment.

The Tribunal observed that the addition was made based on material available on record, and that the assessee had made compliance to some extent It noted that this was not a case of gross non-compliance and emphasized the principles of objectivity, equity, fairness, and justice.

The bench comprising Pradip Kumar Kedia (Accountant Member) and Vimal Kumar (Judicial Member) set aside the addition and restored the matter to the AO’s file for a fresh adjudication. The AO was directed to provide the assessee a proper opportunity to submit evidence and explanations in support of its claim that the income was already taxed.

The assessee was represented by Vipin Jain, while Ram Kishan Meena appeared on behalf of the Revenue.

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