PALWINDER SINGH,ADAMPUR vs. INCOME TAX OFFICER, JALANDHAR

ITA 601/ASR/2025Status: DisposedITAT Amritsar28 September 2026AY 2009-107 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment under Section 147 of the Act is invalid. The reasons recorded by the Assessing Officer clearly stated cash deposits of Rs. 35,81,500/- and Rs. 33,95,000/-. However, information obtained from the bank under Section 133(6) indicated cash deposits of Rs. 40,40,000/-. This significant difference, coupled with the absence of account numbers in the reasons recorded, indicated that the reopening was based on erroneous and unverified facts without preliminary inquiry. The Tribunal found that this misinformation vitiated the assumption of jurisdiction under Section 147. For completeness, the Tribunal also addressed the merits. It held that the addition of Rs. 39,00,000/- under Section 68 could not be sustained. Since the assessee did not maintain any books of account, the addition based solely on bank statements/passbooks, as per the ratio of cited decisions of coordinate benches, is impermissible. The Assessing Officer is directed to delete the addition. The appeal is allowed.

What were the facts?

The assessee, Palwinder Singh, is an individual. The Assessing Officer (AO) received information regarding cash deposits of Rs. 35,81,500/- and Rs. 33,95,000/- in the assessee's savings bank account with Capital Local Area Bank, Bhogpur, for Assessment Year 2009-10. Believing income had escaped assessment, the AO reopened the assessment under Section 147 of the Income Tax Act, 1961, and issued notices under Sections 142(1) and 148. The assessee did not respond. The AO obtained information from the bank under Section 133(6), which indicated cash deposits of Rs. 40,40,000/-. Consequently, the AO added Rs. 39,00,000/- as unexplained cash credit under Section 68 and Rs. 5,231/- as interest income. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi, which dismissed the appeal. The assessee is now appealing to the ITAT.

What were the issues?

1. Whether the reopening of assessment under Section 147 of the Income Tax Act, 1961, is valid, given alleged discrepancies in the information relied upon by the Assessing Officer? - Assessee's contention: The reopening is invalid because it was based on erroneous information and incorrect facts. The AO cited Rs. 35,81,500/- and Rs. 33,95,000/- in the reasons recorded, but the actual deposit was Rs. 33,95,000/-. This misinformation vitiates the assumption of jurisdiction. Relied on CIT v. Atlas Cycle Industries Limited (180 ITR 319). - Revenue's contention: The preliminary information was correct as the assessee did deposit cash. A mere mention of a different figure in the reasons recorded does not invalidate the reopening. The revenue relied on the observations of the AO and the first appellate authority. 2. Whether an addition under Section 68 of the Income Tax Act, 1961, can be made based solely on bank statements when the assessee does not maintain books of account? - Assessee's contention: No addition under Section 68 can be made as the assessee has not maintained any books of account. A bank account is not considered the assessee's books of account. Relied on Shri Sandeep S. Sharma v. ITO (ITA No. 4801/Mum/2024) and Satish Kumar v. ITO ([2019] 175 DTR (Tribunal) 121). - Revenue's contention: The revenue relied on the observations of the Assessing Officer and the first appellate authority.

Which sections of the Income-tax Act were involved?

Section 147,Section 68,Section 142(1),Section 148,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI GIRISH AGRAWAL, HON’BLE

For Appellant: Shri Ashray Sarna, CA
For Respondent: Shri Prashant Singh, Sr. DR

PER: SHRI SAKTIJIT DEY, V.P.:

This is an appeal by the assessee against order dated 30th June, 2025 passed by National Faceless Appeal Centre [NFAC], Delhi, for Assessment Year 2009-10. 2. The grounds raised by the assessee are both on the validity of reopening of assessment under Section 147 of the Income Tax Act, 1961 [in short, “the Act”] as also on the merits of the addition made of Rs.39,00,000/- under Section 68 of the Act.

2 Asst. Year: 2009-10

3.

Briefly the facts are, the assessee is a resident individual. As alleged by the Assessing Officer, information was received that in the previous year relevant to the assessment year under dispute, the assessee had deposited cash

The order continues below.

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