ITA No.956/Del/2022: Upendra Kumar vs. ITO-Ward 68(5), Delhi – A Comprehensive Analysis

ITA No.956/Del/2022: Upendra Kumar vs. ITO-Ward 68(5), Delhi – A Comprehensive Analysis

In a significant decision by the Income Tax Appellate Tribunal, Delhi Bench ‘SMC’ in New Delhi, presided over by Judicial Member Shri Saktijit Dey, the appeal filed by Upendra Kumar against the order dated 15.03.2022 passed by the National Faceless Appeals Centre (NFAC), Delhi for the assessment year 2012-13, was allowed, marking a substantial development in the realm of tax litigation.

Background of the Case

The case involved the appellant, Upendra Kumar, a resident individual from Sahibabad, Ghaziabad, challenging the validity of the reopening of his assessment for the year 2012-13 under section 147 of the Income Tax Act, as well as contesting the merits of the addition of Rs.8,16,000 to his income by the assessing officer.

Reopening of Assessment

Based on information available to the department, the assessing officer noted that Kumar had deposited a total of Rs.11,73,000 in cash in his saving bank account with Axis Bank during the year under consideration. Citing non-compliance with the notices issued under Section 148 and 142(1) of the Act, the officer proceeded to complete the assessment ex parte under Section 144, leading to the addition under Section 69A.

Plea before the Commissioner (Appeals)

Challenging this addition, Kumar appealed to the Commissioner (Appeals), who granted partial relief by reducing the addition to Rs.8,16,000. At the Tribunal, Kumar’s counsel, on instructions, chose not to press the legal grounds against the reopening of assessment but instead contested the merits of the addition.

Arguments and Final Judgment

The crux of the matter revolved around the source of the cash deposits. Kumar, a salaried employee with the Delhi Police, argued that the deposits were from cash withdrawn earlier which had been given to his brother for their mother’s medical treatment. The Tribunal found the assessee’s explanation credible, noting that similar explanations were furnished at the appellate level and were partly accepted there.

However, the Tribunal observed an inconsistency in accepting the explanation only partially for certain deposits and deemed it unreasonable. Consequently, the Tribunal deleted the addition of Rs.8,16,000, allowing Kumar’s appeal.

Conclusion

This case highlights the importance of providing a coherent explanation backed by evidence when contesting additions to income under the Income Tax Act. The successful appeal of Upendra Kumar against the partial relief granted by the Commissioner (Appeals) emphasizes the appellate tribunal’s role in ensuring justice and reasonableness in tax assessments.

Order pronounced in the open court on 4th October, 2022, by Judicial Member Saktijit Dey, marking a significant precedent in tax litigation cases.

ITA No.956/Del/2022: Upendra Kumar vs. ITO-Ward 68(5), Delhi – A Comprehensive Analysis