Sourabh Aggarwal Vs. DCIT, Central Circle, Karnal

In the Income Tax Appellate Tribunal, Delhi ‘E’ Bench, New Delhi, a landmark case ITA No. 962/DEL/2022 for the Assessment Year 2017-18 was presided over by esteemed members Shri N.K. Billaiya, Accountant Member, and Shri Kul Bharat, Judicial Member. The case involved the appellant, Sourabh Aggarwal from Yamuna Nagar, Haryana, against the respondent, the Deputy Commissioner of Income Tax (DCIT), Central Circle, Karnal.

The core issue revolved around the assessment order dated 17.12.2019 under section 143(3) of the Income-tax Act, 1961 hereinafter referred to as ‘The Act’, and the appellant sought relief against the additions made under section 69A of the Act.

The contentious point was the addition of Rs. 4.50 crores to the taxable income under section 69A of the Act, which the appellant claimed was wrongly upheld by the CIT(A)-3, Gurgaon in the order dated 31.03.2022. The appellant contended that the addition was unjust as advance tax was already paid on the sum deposited in the bank account, and thus it should not be taxed as income under section 69A of the Act.

Furthermore, the case delved into the interpretation and applicability of the Pradhan Mantri Garib Kalyan Yojna Scheme, 2016 (PMGKY), under which the appellant had declared the income and paid the necessary taxes. Despite compliance with the scheme, the issue arose when the system failed to accept part of the payments made before the notification of the PMGKY Scheme, causing an impasse regarding the validity of the declaration under the scheme.

The tribunal meticulously examined the documentary evidences and the sequence of events, including the payment of advance tax and declaration under the PMGKY Scheme. The decision highlighted the crucial aspect that the advance tax paid by the assessee and declared under the PMGKY Scheme had to be considered in totality to appreciate the bona fide intention of the appellant.

After thorough analysis, the bench concluded that the addition made under section 69A of the Act was not warranted as the appellant had indeed made a valid declaration under the PMGKY Scheme, 2016, and complied with all the requisite conditions. The tribunal also pointed out that the application of section 69A was not justified on the facts of the case.

The final judgment allowed the appeals in favor of the appellant, Sourabh Aggarwal, directing the Assessing Officer to delete the impugned addition made under section 69A. The tribunal’s decision underscored the importance of considering the taxpayer’s compliance with the provisions of the PMGKY Scheme and ensuring justice was served.

The case ITA No. 962/DEL/2022 and its companion cases represent a significant precedent regarding the tax authorities’ interpretation and application of the PMGKY Scheme and section 69A of the Income Tax Act. The verdict brings to light the necessity of acknowledging the taxpayers’ efforts to adhere to statutory provisions and schemes introduced by the government.

Sourabh Aggarwal Vs. DCIT, Central Circle, Karnal