The Case of Manju Aggarwal vs DCIT: A Landmark Judgement

The Case of Manju Aggarwal vs DCIT: An Insightful Judgement

In a significant decision by the Income Tax Appellate Tribunal (ITAT), Delhi Bench, case number ITA 965/DEL/2022, involving appellant Manju Aggarwal from Haryana against the respondent DCIT, Central Circle, Karnal, has been allowed, marking a victory for the appellant for the assessment year 2017-18. This article delves into the complexities of the case, the arguments from both sides, and the final judgement pronounced.

Background

The litigation arises from the aftermath of demonetization implemented by the Government of India in November 2016. The appellant, Manju Aggarwal, was scrutinized for depositing a large sum of money amounting to Rs. 4.50 crores during the demonetization period in her bank account, which the Income Tax Department viewed with suspicion under Section 69A of the Income-tax Act, 1961.

Arguments Presented

The department contended that the amount was not disclosed in the appellant’s returns and lacked a credible explanation for the source, thus deeming it as unexplained income under the Act. On the other hand, the appellant argued that the advance tax had been duly paid on the sum, and it was declared under the Pradhan Mantri Garib Kalyan Yojna (PMGKY) 2016, asserting compliance with all legal requirements.

The Tribunal’s Decision

After a thorough examination of the evidence and arguments presented by both sides, the ITAT found merit in Aggarwal’s claims. The Tribunal notably highlighted the appellant’s proactive steps in declaring the income under PMGKY and paying the necessary taxes and penalties before the scrutiny notice, marking a significant point in the appellant’s favor. It was ruled that the provisions of Section 69A of the Act were not applicable given the context and sequence of actions taken by Aggarwal.

Legal Implications

The judgement sends a pivotal message concerning the treatment of deposits made during the demonetization period, especially for those who availed schemes like PMGKY 2016. It underscores the importance of documenting and declaring such deposits in compliance with the legal frameworks to avoid being wrongfully labeled as unexplained income under the IT Act.

Conclusion

The ITA 965/DEL/2022 case between Manju Aggarwal and DCIT stands as a testament to the nuanced interpretations of tax laws and the relief mechanisms provided by schemes like PMGKY. It highlights the Tribunal’s balanced approach in adjudicating matters involving complex tax issues and the adherence to principles of justice and fairness.

The Case of Manju Aggarwal vs DCIT: A Landmark Judgement