ITA No. 967/DEL/2022: Sarika Aggarwal vs. DCIT

ITA No. 967/DEL/2022: Sarika Aggarwal vs. DCIT, Karnal for A.Y. 2017-18

Assessment Year: 2017-18

Result: Allowed

In the Income Tax Appellate Tribunal (ITAT), Delhi ‘E’ Bench, the appeal filed by Sarika Aggarwal from Yamuna Nagar against the Deputy Commissioner of Income Tax (DCIT), Central Circle, Karnal was meticulously examined. This case revolves around a series of appeals challenging the orders pertaining to the Assessment Year 2017-18.

The crux of the dispute is centered on a cash deposit amounting to Rs. 4.50 crores during the demonetization period in 2016. Sarika Aggarwal, the appellant, had declared this amount under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) Scheme, 2016. Notably, this scheme was designed to provide a window to declare unaccounted cash by paying a specified amount as tax, surcharge, and penalty, thereby ensuring immunity from tax scrutiny.

The Assessing Officer (AO) originally framed the assessment under section 143(3) of the Income Tax Act, 1961, and added the amount to the appellant’s taxable income under section 69A, considering it as unexplained money. This addition was subsequently challenged up to the ITAT.

During the proceedings, it was established that the appellant had fulfilled all obligations under the PMGKY Scheme by paying the due taxes and making the necessary declaration. Despite this, the AO deemed the declaration invalid due to alleged procedural discrepancies and taxed the amount as income under section 69A.

However, upon detailed examination, the ITAT found that the appellant had genuinely declared the amount under the PMGKY Scheme and complied with all its conditions. It was also noted that the income declared under the scheme is not to be included in the total income of the declarant for any assessment year as per the scheme’s provisions.

Considering the facts and legal provisions, the ITAT ruled in favor of the appellant, directing the AO to delete the addition made under section 69A. This judgment not only recognized the appellant’s compliance with the PMGKY Scheme but also emphasized the importance of correctly interpreting and applying the scheme’s provisions. The decision provides significant relief to the appellant and sets a precedent on the treatment of declarations made under the PMGKY Scheme.

This case illustrates the intricate interplay between tax declarations under specialized schemes and their treatment under the Income Tax Act. It underscores the need for clear guidelines and adherence to procedural norms when dealing with such declarations, ensuring fair treatment for taxpayers.

ITA No. 967/DEL/2022: Sarika Aggarwal vs. DCIT