Sharwan Kumar Vs. DCIT, Central Circle, Karnal – ITA No. 1003/DEL/2022

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KUL BHARAT, JUDICIAL MEMBER
ITA No. 1003/DEL/2022 [A.Y 2017-18]
Shri Sharwan Kumar Vs. The D.C.I.T.
E – 49, Industrial Area, Central Circle, Yamuna Nagar, Haryana, Karnal
PAN: ACTPK 8257 G 2

The Income Tax Appellate Tribunal (ITAT), Delhi, adjudicated a series of appeals pertaining to the Assessment Year 2017-18. The appeals involved various appellants against the orders of the Income-tax Department, with the primary issues revolving around the additions made under Section 69A of the Income Tax Act, 1961, and the validity of declarations made under the Pradhan Mantri Garib Kalyan Yojana Scheme, 2016 (PMGKY).
Among the numerous cases, the particular appeal by Shri Sharwan Kumar against the Deputy Commissioner of Income Tax (DCIT), Central Circle, Karnal, highlighted significant legal and procedural nuances of the PMGKY and its implications on taxpayers’ obligations.

The crux of the matter revolved around cash deposits made during the demonetization period, with the appellant arguing against the tax department’s decision to treat these deposits as undisclosed income under Section 69A. The appellant contended that the advance taxes paid on these amounts and their subsequent declaration under PMGKY should negate the need for addition under Section 69A.
After meticulous examination of submissions, evidences, and legal provisions, the Tribunal provided a comprehensive analysis. It delved into the intricacies of PMGKY’s legal framework, its objectives, and procedural requirements for a valid declaration. Acknowledging the appellant’s adherence to the prescribed norms of PMGKY, including payment of taxes and deposition under the scheme, the Tribunal recognized the legitimacy of the appellant’s claims.

Ultimately, the ITAT concluded that the conditions requisite for invoking Section 69A were not met in this scenario, essentially due to the appellant’s proactive compliance with the PMGKY guidelines. It extensively discussed the legislative intent behind PMGKY, aiming to provide a one-time opportunity for tax compliance and underscored that the scheme’s fulfilment effectively overrides the applicability of Section 69A in cases covered under PMGKY.
Hence, in a significant ruling, the Tribunal allowed the appeal of Shri Sharwan Kumar, declaring the additions made under Section 69A as inconsistent with the principles and provisions of PMGKY. This verdict not only provided relief to the appellant but also set a precedent regarding the interpretation and application of PMGKY in similar cases.

In essence, the judgment underscored the importance of comprehensive legal interpretation, due diligence in tax compliance, and the role of clearly defined tax amnesty schemes in resolving complex taxation issues. It reaffirmed the Tribunal’s commitment to ensuring justice through meticulous legal scrutiny and adherence to principles of tax equity and fairness.

Sharwan Kumar Vs. DCIT, Central Circle, Karnal – ITA No. 1003/DEL/2022