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Cash Deposits During Demonetization Sourced From Prior Bank Withdrawals: ITAT Deletes Penalty<\/strong><\/p>\n The assessee filed her income tax return on 30 July 2017<\/strong>. The case was selected under Computer-Assisted Scrutiny Selection (CASS<\/strong>). The Assessing Officer then issued several notices requesting clarification on ambiguous cash deposits made during the demonetization period. The assessee, however, failed to respond adequately, leading to a best judgment assessment under Section 144<\/strong> of the Income Tax Act, 1961<\/strong>.<\/p>\n An addition of Rs. 24,21,000<\/strong> was made under Section 69A<\/strong> as unexplained money.<\/p>\n CIT(A) dismissed the assessee\u2019s appeal, citing a delay of 92<\/strong> days<\/strong>. The assessee then appealed to the ITAT<\/strong>.<\/p>\n Issues Framed<\/strong><\/p>\n Petitioner argued that the CIT(A) erroneously dismissed the appeal due to a 92-day delay, despite acknowledging timely filing earlier in the order. This violated principles of natural justice.<\/p>\n Then Assessee explained the source of cash deposits, which was clearly traceable to past bank withdrawals:<\/p>\n These withdrawals and re-deposits were supported by bank evidence. Deposits of Rs. 24,15,500<\/strong> and Rs. 5,500<\/strong> made during demonetization matched the withdrawn sums.<\/p>\n Respondent (Revenue) Relied upon the orders of lower authorities, including the AO\u2019s conclusion that the assessee failed to properly respond or explain the cash deposits.<\/p>\n Tribunal\u2019s Decision & Rationale<\/strong><\/p>\n CIT(A) erred in dismissing as time-barred<\/strong><\/p>\n The Tribunal noted that the assessment order was received on 17.01.2020<\/strong> and the appeal was filed on 06.02.2020<\/strong> via e-filing<\/strong>. Therefore, the appeal was filed within the prescribed 30-day limit,<\/strong> and CIT(A) erred in dismissing it as time-barred.<\/p>\n Deleted Cash Addition<\/strong><\/p>\n Thus, the addition under Section 69A<\/strong> could not be sustained.<\/p>\n<\/div>\n Join StudyCafe Membership. For More details about Membership Click Join Membership Button<\/p>\n Join Membership<\/a><\/p>\n In case of any Doubt regarding Membership you can mail us at [email\u00a0protected]<\/span><\/a><\/p>\n<\/div>\n Join Studycafe’s WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!”<\/p>\n<\/div>\n\n
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