Income Tax Appeal Case: Vikrant Tanwar vs ITO, New Delhi on Unexplained Cash Deposit During Demonetization

Income Tax Appeal Case: Vikrant Tanwar vs ITO, New Delhi on Unexplained Cash Deposit During Demonetization

Case Number: ITA 1280/DEL/2022
Appellant: Vikrant Tanwar, New Delhi
Respondent: ITO, Ward-53(3), New Delhi
Assessment Year: 2017-18
Result: Allowed

Introduction

This article provides a comprehensive analysis and detailed summary of the income tax appeal tribunal case concerning Vikrant Tanwar, the appellant, versus the Income Tax Officer (ITO) of Ward-53(3), New Delhi, the respondent. The case revolves around the assessment year 2017-18 and predominantly concerns an unexplained cash deposit in the appellant’s bank account during the period of demonetization in India.

Background

The demonetization policy, implemented by the Government of India in November 2016, aimed at curbing black money and corruption, led to numerous citizens depositing significant amounts of cash in their bank accounts. These deposits attracted the attention of the Income Tax Department, initiating scrutiny and assessments to determine the legality and source of these funds.

The Case Overview

Vikrant Tanwar, the appellant, faced allegations from the Income Tax Department regarding a cash deposit of Rs. 12,80,500 in his bank account during the fiscal year 2016-17. The department’s scrutiny, under the Central Action Plan Scheme for scrutiny assessments (CASS), led to an order passed under section 144 of the Income Tax Act, deeming the money as unexplained and added to the appellant’s income under section 69A, read with section 115BBE.

Grounds of Appeal

The appellant challenged this assessment, bringing forth several grounds, including the legality of the orders passed by the lower authorities, the failure to provide a reasonable opportunity of being heard, and the incorrect application of penalties and interests under various sections of the Income Tax Act.

The Tribunal’s Judgment

The tribunal, led by Shri Shamim Yahya, delved into the intricacies of the case, the submissions from both parties, and the legal framework governing such scenarios. The conclusion was in favor of the appellant, allowing the appeal and remitting the matter back to the assessing officer for reconsideration with specific instructions to provide a fair opportunity to the appellant.

Implications and Conclusion

The judgment underscores the importance of procedural fairness and the right to be heard in the assessment process. It also highlights the need for the Income Tax Department to meticulously follow procedural aspects while conducting assessments, particularly in cases arising out of significant policy changes like demonetization.

Final Judgment

The appeal by Vikrant Tanwar against the order of the Income Tax Officer, Ward-53(3), New Delhi, concerning the assessment year 2017-18 on the ground of unexplained cash deposit during the demonetization period, was allowed. The case was remanded back to the assessing officer for a fresh assessment, adhering to principles of fairness and providing a proper opportunity to the appellant.

Order pronounced in the open court on 21st November 2022.

Income Tax Appeal Case: Vikrant Tanwar vs ITO, New Delhi on Unexplained Cash Deposit During Demonetization