RAJNI SAINI,ALWAR vs. ITO WARD 2(2), ALWAR, ALWAR

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ITA 1289/JPR/2025Status: DisposedITAT Jaipur14 October 2026AY 2011-128 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had successfully explained the cash deposits. Regarding the Rs. 3,00,000 claimed as gifts, the Tribunal found that the father-in-law, a retired government employee drawing pension, could plausibly have Rs. 1,50,000 as savings. For the gift from the mother, the Tribunal noted that the assessee had provided bills for the sale of jewellery, and the AO's denial was based on a hasty verification process, including an incorrect identification of a stamp vendor and failure to verify with the seller. The Tribunal also addressed the total cash deposit of Rs. 6,19,500, noting that the bank statements showed cash withdrawals of Rs. 7,01,000 against these deposits. The Tribunal considered this sufficient explanation for day-to-day expenses or investments. Consequently, the addition of Rs. 6,19,500 and the consequential addition of Rs. 3,276 on account of interest were ordered to be deleted. The reassessment proceedings were implicitly upheld as the Tribunal proceeded to decide on merits, but the additions made were deleted. The appeal was allowed.

What were the facts?

The assessee, Rajni Saini, a government teacher, did not file an income tax return for Assessment Year 2011-12. Proceedings under Section 147 were initiated based on information received by the department, leading to a notice under Section 148. The assessee then filed a return declaring a total income of Rs. 1,72,950. During scrutiny, the Assessing Officer (AO) noted cash deposits totaling Rs. 6,19,500 in the assessee's bank account. The AO treated this entire amount as income from undisclosed sources and made additions, including Rs. 3,276 as interest income, framing an assessment under Section 147 read with Section 143(3) at Rs. 7,95,730. The assessee's appeal to the Joint Commissioner of Income Tax (Appeal) [JCIT(A)] was dismissed, confirming the additions. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, were valid, considering the grounds for reopening were allegedly based on borrowed satisfaction and lacked a live nexus with the alleged escapement of income. 2. Whether the addition of Rs. 3,00,000, claimed as cash gifts from the assessee's father-in-law (Rs. 1,50,000) and mother (Rs. 1,50,000), was erroneously sustained by the JCIT(A) despite the assessee furnishing a gift deed and other supporting evidence. 3. Whether the addition of Rs. 1,69,500 (part of the total cash deposit of Rs. 6,19,500) as unexplained cash deposit was wrongly confirmed, when the assessee explained the source from past savings and family contributions. Assessee's Contentions: - The reasons for reopening were based on borrowed satisfaction and mechanical approval, without any live nexus to escapement of income. Reopening based on cash deposits was invalid. - The JCIT(A) erred in sustaining the addition of Rs. 3,00,000 as unexplained, ignoring the gift deed and supporting evidence for gifts from father-in-law and mother. - The addition of Rs. 1,69,500 was erroneous as the source from past savings and family contributions was duly explained and not disproved by the department. - The entire reassessment proceedings under Section 147/148 were illegal, invalid, and void-ab-initio. Revenue's Contentions: - The judgment records no specific contentions for the revenue on the issues of reassessment validity or the explanation for cash deposits.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “SMC” BENCH, JAIPUR

Before: SHRI KULDIP SINGH & SHRI PRAKASH, ACCOUNTANCT MEMBER

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “SMC” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER & SHRI PRAKASH, ACCOUNTANCT MEMBER ITA No: 1289/JPR/2025 Assessment Year: 2011-12

Rajni Saini The ITO, Bodan Colony, Ward-2(2), Vs Jaipur Road, Alwar. Alwar. PAN: CFMPS3618M (Respondent) (Appellant)

Assessee Represented: Smt. C.L. Yadav, C.A. Revenue Represented: Sh. Ghanshyam Meena, JCIT Date of hearing : 17-09-2026 Date of pronouncement : 14-10-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Rajni Saini (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 08.07.2025 passed by the Addl./Joint Commissioner of Income Tax (Appeal)-2, Gurugram [hereinafter referred to as the ‘JCIT(A)’] qua assessment year 2011-12 on the grounds inter-alia that:- “1.That the learned CIT(A) failed to appreciate that the reasons recorded for reopening were merely based on borrowed satisfaction and mechanical

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approval, without any live nexus between the material and the alleged escapement of income. Reopening, on the basis of cash deposited in bank is invalid, as there was no basis to form reason that cash deposits represented assessee's income Hence, the reassessment proceedings deserve to be quashed.

2.

That the learned CIT(A) erred in sustaining the addition of Rs. 3,00,000/- alleged as unexplained, being cash gift from father-in-law, ignoring the fact that the assessee had furnished gift deed and other supporting evidences to prove its genuineness.

3.

That the learned CIT(A) erred in sustaining the addition of? 1,50,000/- alleged as unexplained, being cash gift from assessee's mother, ignoring the evidences of source and the settled principle that gifts from close relatives are not taxable.

4.

That the learned CIT(A) further erred in sustaining the addition of Rs. 1,69,500/- as unexplained cash deposit, without appreciating 4 that the assessee had duly explained the source from past savings Re and family contributions, which were not disproved by the department.

5.

That the assessee craves leave to add, amend, alter OR withdraw 5 any of the above grounds of appeal at the time of hearing before R this Hon'ble Tribunal.

6.

That the impugned order passed by the learned Commissioner of 6 Income Tax Appeals is bad in law as well as on facts, arbitrary, Ra unjustified, and liable to be quashed.

7.

That the learned CIT(A) grossly erred in confirming the reassessment order passed u/s 147 r.w.s. 143(3), despite the fact that the very initiation of proceedings u/s 147/148 was illegal, invalid, and void-ab-initio as the reasons recorded did not establish any tangible material OR independent satisfaction of the Assessing Officer to form the belief of escapement of income.”

2.

Briefly stated, facts necessary for consideration and adjudication

of the issues at hand are: Assessee being a government teacher has not filed her return of income for A.Y. 2011-12. On the basis of information

I.T.A No. 1289/JPR/2025 Page No 3 Rajni Saini

received by the department proceedings u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) were initiated by way of issuance of notice u/s 148 of the Act, and in response thereto assessee filed return of income claiming total income at Rs.1,72,950/-, which was subjected to compulsory scrutiny. Notice u/s 142(1) of the Act was issued. The assessee filed necessary details, the Assessing Officer noticed a cash deposit of Rs. 3,00,000/- during the year under consideration. From the bank account statements, the AO noticed that the assessee has made total cash deposit of Rs. 6,19,500/- in her bank account during the period under consideration. Declining the contention raised by the assessee, the Assessing Officer proceeded to make addition of Rs. 6,19,500/- by treating the same as income from undisclosed sources. The Assessing Officer also made addition of Rs. 3,276/- being interest earned during the year and thereby framed assessment at Rs. 7,95,730/- u/s 147 r.w.s. 143(3) of the Act. 3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal, who has confirmed the addition by dismissing the appeal. Being aggrieved with the impugned order passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal.

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4.

We have heard Ld. ARs for the assessee and Ld. DR for the Revenue and perused the record available on file. 5. Ld. AR for the assessee contended that he does not want to proceed with his application moved for raising additional legal ground and only wants to argue the case on merits. Hence the application for additional ground is dismissed as withdrawn. 6. Undisputedly, the assessee is working as a government teacher and apart from salary, interest and saving bank account, she has no other source of income for the year under consideration. She has filed an ITR claiming total income at Rs. 1,72,950/-. It is also not in dispute that during the reopening/scrutiny proceedings, the Assessing Officer noticed that cash deposit to the tune of Rs. 3,00,000/- during the year under consideration. 7. In order to explain the cash deposit of Rs. 3,00,000/- by the assessee, she has come up with this specific plea that Rs. 3,00,000/- was deposited by her in the bank, after receiving the same as gift from his father-in-law Shri Chuttan Lal Saini to the tune of Rs. 1,50,000 and Rs. 1,50,000/- from her mother Smt. Santosh Devi, who had sold her old jewellery to the tune of Rs. 1,35,487/- and remaining amount was arranged by her out of her saving.

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8.

However AO as well as Ld. CIT(A) has declined to accept the explanation given by the assessee on the ground that from the saving bank account of Shri Chuttan lal Saini total withdrawal has come to Rs. 1,09,000/- from 25.01.2010 to 26.07.2010 and as such how he could have gifted the amount prior to making withdrawal from the bank. 9. We are of the considered view that when Shri Chuttan lal Saini is proved to be a retired government employee and drawing pension amount of Rs. 1,50,000/- is not a big amount. A pensioner who invariably does not spend on himself/herself used to have this much amount for cash as he/she used to draw the pension every month and also used to have savings out of their retiral benefits. So we are of the considered view that AO as well as Ld. CIT(A) have erred in not accepting the explanation given by the assessee. 10. Secondly the AO as well as Ld. CIT(E) have declined to accept the explanation given by the assessee as to taking Rs. 1,50,000/-as gift from her mother Smt. Santosh Devi is concerned, the assessee has brought on record bills for sale of jewellery from M/s Agarwal Traders. However the Assessing Officer without procuring verification from M/s Agarwal Traders proceeded to deny the relief sought for by the assessee. The AO has ceremonially issued a notice dated 02.11.2018 to

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M/s Agarwal Traders, but without affecting his services proceeded to hold that since M/s Agarwal Traders has not filed any reply, nor attended the office, it is not verified and proceeded to decline the contention of the assessee. 11. The Assessing Officer in order to make verification of the evidence of the gift deed issued a notice to Smt. Uma Mathur, Notary public, Alwar and Shri Gyan Chand Kumar Mittal, Stamp Seller, Alwar through ward Inspector, who has reported that Smt Uma Mathur has stopped working as Notary Public as she used to remain sick and there is no person namely Sh. Gyan Chand Kumar Mittal working as stamp vendor in the court premises, Alwar. 12. Ld. AR for the assessee contended that the Inspector has wrongly noticed that the name of stamp vendor as Sh. Gyan Chand Kumar Mittal instead of Mr. Anand Kumar Mittal, which fact is visible from gift deed. It is also contended by the ld. AR for the assessee that when Smt. Uma Mathur, Notary Public was reported to be sick, the facts could have been verified by visiting the house of Smt. Uma Mathur. The contention of the ld. AR for the assessee are sustainable because, it is proved from the assessment order itself that the entire enquiry has been conducted in haste and the AO has declined to accept the evidence without proper verification.

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13.

Perusal of the gift deed and bills of sale of jewellery goes to prove that the assessee has received an amount of Rs. 3,00,000/- from her father-in-law and mother and the assessee has successfully proved the same. Furthermore the Assessing Officer has given another show cause notice dated 15.11.2018 for making addition of Rs. 6,19,500/- of cash deposit made in the saving bank account, but on failure of the assessee to attend the office or to file reply proceeded to make addition of Rs. 6,19,500/-. 14. Ld. AR for the assessee contended that the assessee has brought on record complete bank account statement, which shows withdrawal of Rs. 7,01,000/- against the cash deposit of Rs. 6,39,000/-. 15. We have perused the bank statements with the assistance of Ld. AR for the assessee and Ld. DR for the Revenue, which shows the cash withdrawal of Rs. 7,01,000/- against the cash deposit of Rs. 6,39,000/-. When the bank statement was already proved on record by the assessee, the Assessing Officer was not required to procure the presence or the reply of the assessee to scrutinize the document. 16. It is a matter of common notice that in the lower middle class particularly a salaried person they used to operate his/her account by withdrawing or depositing the amount as per their convenience to make day to day expenses or to invest the same in some piece of

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property. So from the gift deed, bill for sale of old jewellery, bank statements of the assessee, PAN card of Sh. Chuttan Lal Saini available at paper book from page 8 to 21, it is proved that the assessee has duly explained the cash deposit vis-a-vis withdrawal of amount of Rs. 7,01,000/- and deposit of Rs. 6,19,500/-. When an amount of Rs. 6,19,500/- stood duly explained, question of making addition of Rs. 3,276/- on account of interest also does not arise. So, we are of the considered view that the AO as well as Ld. CIT(A) have erred in making addition/confirmation, which is ordered to be deleted. 16. Resultantly, the appeal filed by the assessee is allowed. Order pronounced in the open court on14-10-2026.

Sd/- Sd/- (PRAKASH) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Jaipur Dated:- 14/10/2026. *Santosh. Copy of the order forwarded to: 1. The Appellant- 2. The Respondent- 3. CIT 4. CIT(A) 5. DR, ITAT, Jaipur. 6. Guard File By order, Asst. Registrar

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