Introduction

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, delivered a significant verdict in ITA No. 758/DEL/2022, where Thangzamuan Hangshing (the appellant) contested the assessment order issued by the Income Tax Officer, Ward-72(4), New Delhi, for the assessment year 2017-18. The case revolves around the addition of ₹11,26,494 under section 69A of the Income Tax Act, 1961, for unexplained money.

Background

Thangzamuan Hangshing filed his return of income for the assessment year 2017-18 on 20th June 2017, declaring an income of ₹8,30,180. The case was selected for limited scrutiny under CASS to verify the cash deposit during the demonetization period. The assessee contended that the cash was deposited out of withdrawals saved for purchasing a house, which the Assessing Officer (AO) did not accept, leading to the impugned addition.

Appeal Proceedings

The appellant, aggrieved by the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, appealed before the ITAT. The grounds of appeal challenged the legality and the facts of the assessment, including the denial of principle of natural justice.

The Tribunal, after considering the submissions and the material on record, found merit in the appellant’s argument. It noted that undisputedly the appellant had withdrawn the amount from his bank account, and there was no material to suggest utilization of the money for any other purpose.

Final Judgment

The ITAT allowed the appeal, directing the Assessing Officer to delete the addition of ₹11,26,494 to the income of the appellant. It highlighted that the authorities below were not justified in confirming the addition and emphasized the need for considering the facts and circumstances of the case truthfully.

Conclusion

This landmark decision underscores the significance of providing adequate opportunity to the assessee and the importance of considering all factual materials before making an addition under section 69A. It sets a precedent on how cases involving unexplained money should be handled, ensuring justice and fairness in the tax assessment process.