Sunita Saini vs. ITO: Unexplained Deposit Case Reopened for Fresh Verification

Sunita Saini vs. ITO: Unexplained Deposit Case Reopened for Fresh Verification

Case Number: ITA 6483/DEL/2019

Appellant: Sunita Saini, New Delhi

Respondent: ITO, Ward-33(1), New Delhi

Assessment Year: 2011-12

Date of Order: January 18, 2023

Order Pronounced On: January 18, 2023

Background

Sunita Saini, a resident of New Delhi, filed an appeal against the order of the Commissioner of Income Tax (Appeals)-11, New Delhi, for the assessment year 2011-12. The appeal was filed after the Assessing Officer (AO) added an amount of Rs. 9,00,000 to her income as unexplained term deposits. The AO had reopened the case under Section 147 of the Income Tax Act, 1961, based on information about this deposit in her HDFC Bank account.

Why the Case Was Filed

The case was filed by Sunita Saini after the AO treated her term deposit of Rs. 9,00,000 as unexplained income due to her failure to respond to statutory notices during the assessment proceedings. The AO’s order was upheld by the CIT(A), leading the assessee to approach the Income Tax Appellate Tribunal (ITAT) to challenge the addition made to her income.

Proceedings Before the Tribunal

The appeal was heard by the ITAT’s “SMC” Bench in New Delhi. During the hearing, the assessee was represented by her husband, Shri Mahender Singh Saini, who argued that the AO had not provided sufficient opportunity for the assessee to explain the source of the term deposits. He claimed that the deposits were made from the maturity of previous deposits and from gifts he had received upon his retirement from government service.

The respondent, represented by the Senior Departmental Representative (DR), opposed the appeal, asserting that the assessee should have provided the necessary evidence before the lower authorities to substantiate the source of the funds.

Tribunal’s Decision

After considering the arguments from both sides, the Tribunal noted that there was a lack of effective representation from the assessee during the initial assessment proceedings. To uphold the principles of natural justice, the Tribunal decided to set aside the assessment order and remand the case back to the AO. The AO was directed to verify the claims made by the appellant regarding the source of the deposits and to make a fresh assessment after providing the assessee with an adequate opportunity to present her case.

Final Judgment

The ITAT allowed the appeal for statistical purposes, emphasizing the need for a fair reassessment by the AO. The Tribunal’s order ensures that the appellant, Sunita Saini, is given a proper opportunity to explain the source of the term deposits, and that the assessment is conducted in a just and equitable manner.

Conclusion

The case of Sunita Saini vs. ITO, Ward-33(1), New Delhi highlights the importance of ensuring that taxpayers are given a fair chance to present their case, especially in situations where significant additions are made to their income based on unexplained deposits. The Tribunal’s decision to remand the case for a fresh assessment allows the appellant a fair opportunity to substantiate the source of the deposits in question, ensuring that justice is served.

The order was pronounced in the open court on January 18, 2023, by the ITAT Bench, comprising Judicial Member Shri Kul Bharat.

Sunita Saini vs. ITO: Unexplained Deposit Case Reopened for Fresh Verification