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Facts
The assessee's appeals concern penalty orders for AY 2017-18 related to unexplained cash deposits of Rs. 43,57,600 in the bank account. Prior decisions in related appeals had addressed the cash deposits and treated them as arising from business turnover, with a lump sum addition being made.
Held
The Tribunal noted that subsequent decisions in favour of the assessee, including the quashing of a penalty under Section 271B, considered the explanation for cash deposits to be satisfactory under Section 69A. These decisions negated the Assessing Officer's contentions regarding the unexplained nature of the deposits.
Key Issues
Whether the penalty orders for unexplained cash deposits were legally sustainable in light of previous favourable judicial pronouncements and the assessee's satisfactory explanation.
Sections Cited
272A(1)(d), 271A, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, DELHI
Before: SHRI ANUBHAV SHARMA&
order dated 29.01.2025 & 13.02.2025 of the Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order Nos: ITBA/NFAC/S/250/2024-
P a g e | Mohd Javed (AY: 2017-18) 25/1072683493(1)/ ITBA/NFAC/S/250/2024 -25/1073216938(1) arising out of the different penalty order dated 11.06.2021 & 14.06.2021 u/s 272A(1)(d)/271A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the NFAC, Delhi for AY: 2017-18.
Heard and perused the records. It was pointed out by ld. Counsel for the assessee that in assessee’s case for present AY: 2017-18 vide order dated 27.05.2025 the quantum appeal of the assessee has been disposed of whereby the cash deposits of the assessee were found to be out of business turnover though a lumpsum addition of Rs.4,50,000/- was made by the Coordinate Bench. of Coordinate Bench order dated 03.03.2023 has quashed the penalty u/s 271B of the Act on the premises that the cash deposit of Rs.4.3 Cr in the bank account and the sale turnover of Rs.4.01 lakhs in ITR revenue led to penalty u/s 271B of the Act, but assessee was found to be a commission agent and earning margins as prescribed by the Gujarat Milk Cooperative Federation making the levy of penalty not sustainable in law.
P a g e | Mohd Javed (AY: 2017-18) 4. The Penalties were imposed in the background of allegation that the assessee was unable to explain the source of deposits amounting to Rs.43,57,600/- in its bank account. The subsequent decisions in favour of the assessee sufficiently taken into consideration the explanation which has found to be satisfactory for the purpose of Section 69A and that also negates the contention of Assessing Officer. In the light of the aforesaid the ground raised in both the appeals are sustained. Both the appeals are allowed and impugned penalty orders are quashed.
Order pronounced in the open court on 09.01.2026