THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs. SANTOSH TRUST

PDF · subscribers
ITA/302/2026HC DelhiDLHC01014769202610 April 2026Author: HON'BLE MR. JUSTICE DINESH MEHTA,HON'BLE MR. JUSTICE VINOD KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the cash deposit of Rs. 39,83,63,741 by the respondent-Trust during the demonetization period was not unusual and therefore not taxable under Section 69A read with Section 115BBE of the Act. The Court noted that on October 31, 2016, the Trust had a cash balance of Rs. 42,92,29,252, making the subsequent deposit of Rs. 39,83,63,741 neither unusual nor taxable. Furthermore, considering the Trust's activity of running a college, it was understandable that more cash might have been collected and deposited during the demonetization period, as parents might have rushed to pay fees in cash from their available funds. The Court found nothing wrong or unusual in the deposit. The appeal was dismissed.

What were the facts?

The Principal Commissioner of Income Tax - Central -1 (Appellant) challenged an order of the Income Tax Appellate Tribunal (Tribunal) dated August 29, 2025. The dispute concerns a cash deposit of Rs. 39,83,63,741 made by Santosh Trust (Respondent) during the demonetization period (November 9, 2016, to December 31, 2016). The Assessing Officer had added this entire amount as income under Section 69A read with Section 115BBE of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) had set aside this addition, finding the deposit not unusual given the Trust's activities and noting a consistent cash balance. The Tribunal affirmed the CIT(A)'s order.

What were the issues?

1. Whether the cash deposit of Rs. 39,83,63,741 by the respondent-Trust during the demonetization period is taxable as income under Section 69A read with Section 115BBE of the Income Tax Act, 1961, and if the appellate authorities erred in deleting the addition. Assessee's Contention: Not recorded. Revenue's Contention: The Appellant-Department argued that both the CIT(A) and the Tribunal erred in deleting the addition made by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 260A,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~86 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 302/2026 & CM APPL. 23402/2026 THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 .....Appellant Through: Mr. Ruchir Bhatia, SSC with Mr.Anant Mann & Mr. P Gupta, JSCs versus SANTOSH TRUST .....Respondent Through: Nemo. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

10.04.

2026

1.

By way of the present appeal, preferred under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’), the appellant-Department has challenged the order dated 29.08.2025 passed by the Income Tax Appellate Tribunal “G” Bench, Delhi (hereinafter referred to as ‘the Tribunal’).

2.

The basic question (though a question of fact) involved in the present appeal is in relation to substantial cash amount of Rs.39,83,63,741/-, which the respondent-Trust had deposited during the demonetization period from 09.11.2016 to 31.12.2016. The Assessing Officer added the entire cash deposited by the Trust treating the same as income under Section 69A read with Section 115BBE of the Act of 1961. 3. The Commissioner of Income Tax (Appeals) (hereinafter referred to This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/04/2026 at 11:47:24

as ‘CIT(A)’), vide its order dated 13.02.2023, set aside such addition while recording a finding that the cash deposit cannot be said to be unusual, given the nature of the activities of the respondent-Trust. He also recorded the fact that there was a consistent cash balance in the books of the respondent- Trust.

4.

The Tribunal, vide the impugned order rejected the Department‟s appeal and affirmed the order of the CIT(A).

5.

Mr. Anant Mann, learned Junior Standing Counsel for the appellant- Department, argued that both the Appellate Authorities have seriously erred in deleting the addition.

6.

Though we know that the question as to whether the cash deposit was duly explained or not is a finding of fact, though with reluctance, for the sake of satisfaction of learned JSC, we went through the record to the extent necessary. On perusal of paragraph no.4.2.18 sub paragraph 5 of the order of the CIT(A), we find that the Commissioner after analyzing the cash balance in the books of the respondent-Trust had found as under: S.No. Date Cash in hand 1. 01.04.2016 Rs.1,17,57,764/- 2. 30.04.2016 Rs.2,33,98,814/- 3. 31.05.2016 Rs.10,56,87,493/- 4. 30.06.2016 Rs.13,67,78,622/- 5. 31.07.2016 Rs.33,08,06,435/- 6. 31.08.2016 Rs.37,00,28,233/- 7. 30.09.2016 Rs.38,49,38,712/- 8. 31.10.2016 Rs.42,92,29,252/- *Rs.39,83,63,741/- deposited between 09.11.2016 and 31.12.2016 9. 30.11.2016 Rs.2,10,89,138/-

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/04/2026 at 11:47:24

7.

Undisputedly, demonetization was declared on 08.11.2016 and even on 31.10.2016, the respondent-Trust had a cash balance of Rs.42,92,29,252/- and therefore, the deposit of Rs. 39,83,63,741/- can neither be said to be unusual nor can it be taxed, while invoking provisions of Section 69A read with Section 115BBE of the Act of 1961. 8. Apart from that, looking at the nature of the activities which the respondent-assessee is engaged in, viz. running a college, if comparatively more cash was collected and deposited during demonetization period, it can well be understood that parents of students would rush to deposit the fees in cash out of the cash amount that was available with them.

9.

We do not find anything wrong or unusual in cash deposit of Rs. 39,83,63,741/- by the respondent-Trust.

10.

The appeal, therefore, fails.

11.

The pending application is disposed of.

DINESH MEHTA, J

VINOD KUMAR, J APRIL 10, 2026 kk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/04/2026 at 11:47:24

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →