ITA No. 968/DEL/2022: Satya Aggarwal vs DCIT, Karnal – An Analysis of Tribunal’s Judgment

In a remarkable judgment dated November 2, 2022, the Income Tax Appellate Tribunal, Delhi ‘E’ Bench, presided by Judicial Member Shri Kul Bharat and Accountant Member Shri N.K. Billaiya, issued a ruling in favor of the appellant, Satya Aggarwal of Yamuna Nagar, against the Deputy Commissioner of Income Tax (DCIT) in Karnal, for the Assessment Year 2017-18. This detailed article provides an in-depth analysis of the case numbered ITA No. 968/DEL/2022 and its implications for tax jurisprudence.

Background of the Case

The case revolves around the scrutiny of Satya Aggarwal’s income tax return for the Assessment Year 2017-18. The central issue was the addition of Rs. 4.50 crores to Aggarwal’s taxable income, classified under Section 69A of the Income Tax Act, 1961, concerning the cash deposit made during the demonetization period in 2016. Aggarwal contended that the deposited amount was from her declared income under the Pradhan Mantri Garib Kalyan Yojna Scheme (PMGKY) 2016, for which she had already paid the necessary taxes and penalties.

Arguments and Tribunal’s Observation

The appellant argued that the advance tax paid on the said deposits should exempt the amount from being taxed under Section 69A as unexplained money. The Department contested, stating discrepancies and procedural anomalies in declaring the amount under PMGKY. However, after meticulous examination of the submissions, documentary evidences, and the legal framework governing the PMGKY Scheme, the Tribunal found in favor of the appellant. It was concluded that the appellant had complied with all the requirements under PMGKY, making the additions under Section 69A unsustainable.

Conclusion and Impact

The judgment underscores the principle that adherence to statutory provisions and sincere compliance with the tax regime secures the taxpayer’s position. This case sets a precedent for similar disputes, emphasizing the importance of documentation and appropriate procedural adherence in tax declarations. The Tribunal’s decision in ITA No. 968/DEL/2022 is a testament to the judicious application of law, providing relief to taxpayers who comply with the legal mandates in their true essence.

Key Takeaways

• The Tribunal upheld the taxpayer’s compliance with PMGKY as valid, negating the addition under Section 69A.
• Documentary evidence and proper adherence to procedural norms are crucial in tax litigation.
• The judgment provides clarity on the treatment of deposits made during demonetization under the PMGKY Scheme.

This analysis elucidates the critical aspects and legal interpretations in the judgment of ITA No. 968/DEL/2022, providing valuable insights into the Income Tax Appellate Tribunal’s rationale and its implications for future tax-related litigations.

ITA No. 968/DEL/2022: Satya Aggarwal vs DCIT, Karnal – An Analysis of Tribunal’s Judgment