Siphoning of Govt Funds via Bank A/c Misuse treated as Unexplained Income without Examining FIR: ITAT Remands Matter [Read Order]
Deposits in the assessee’s bank account were treated as unexplained income, though the assessee claimed that the account had been misused for siphoning Government funds.ITAT Delhi noted that the FIR was not examined and remanded the matter.
![Siphoning of Govt Funds via Bank A/c Misuse treated as Unexplained Income without Examining FIR: ITAT Remands Matter [Read Order]](https://images.taxscan.in/h-upload/2026/05/06/2135682-itat-delhi-siphoning-govt-funds-bank-account-misuse-unexplained-income-fir-taxscan.webp "Siphoning of Govt Funds via Bank A/c Misuse treated as Unexplained Income without Examining FIR: ITAT Remands Matter [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, set aside addition under Section 69A on deposits treated as unexplained income. The assessee had claimed misuse of his bank account by a relative for siphoning Government funds. However, the FIR was not examined. The assessee, Sanjay Chalia, a salaried individual earning income below the taxable limit, had not filed a...
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, set aside addition under Section 69A on deposits treated as unexplained income. The assessee had claimed misuse of his bank account by a relative for siphoning Government funds. However, the FIR was not examined.
The assessee, Sanjay Chalia, a salaried individual earning income below the taxable limit, had not filed a return of income. During the year, his bank account was used by a relative, Mr. Virender, for fraudulent transactions involving siphoning of Government funds.
An amount of ₹24.65 lakh was deposited in the bank account and later withdrawn by the said person. The case was reopened under Section 147 based on information arising from an FIR relating to embezzlement of Government funds.
During the assessment, the assessee stated that the deposits were Government funds fraudulently deposited by his relative into his account.
The Assessing Officer, however, treated the entire amount as unexplained money under Section 69A and the addition was upheld by the Commissioner of Income Tax (Appeals).
Before the Tribunal, the assessee reiterated that he was a victim of fraud and that the bank account had been misused.
The Revenue supported the orders of the lower authorities.
The Tribunal, comprising Vikas Awasthy (Judicial Member), noted that although the case was based on information arising from an FIR, there was nothing on record to show that the Assessing Officer had examined the FIR or carried out any independent verification of the assessee’s explanation.
It observed that if the bank account was merely used by another person for siphoning Government funds, the amount could not be treated as income of the assessee.The matter was restored for fresh examination after giving opportunity to the assessee.
The appeal was allowed for statistical purposes.
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