SAVITABEN NATHALAL VADI,JAMNAGAR vs. INCOME TAX OFFICER, WARD 1(3), JAMNAGAR, JAMNAGAR

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ITA 426/RJT/2025Status: DisposedITAT Rajkot12 September 2025AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The ITAT condoned the delay of 153 days in filing the appeal, accepting the assessee's submission that she is a senior citizen and was unaware of the CIT(A)'s order due to non-receipt of notices. The Tribunal found mitigating circumstances and exercised its discretion in favour of the assessee. Regarding the addition of Rs. 2,50,000/-, the Tribunal noted that the CBDT, through Instruction No. 03/2017 dated 21.02.2017 and a Press Release dated 18.11.2016, provided for a blanket exemption of Rs. 2,50,000/- per person for small depositors like artisans, daily workers, and housewives, especially during the demonetization period. The Tribunal observed that the amount deposited by the assessee falls within this exempted slab. Therefore, the addition made by the AO under Section 69A was deleted. The appeal of the assessee was allowed.

What were the facts?

The assessee, Savitaben Nathalal Vadi, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the Commissioner of Income Tax (Appeal) (CIT(A)). The appeal pertains to Assessment Year 2017-18 and concerns an addition of Rs. 2,50,000/- made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961, for cash deposited during the demonetization period. The assessee's appeal to the ITAT was filed 153 days after the due date. The assessee, a 70-year-old woman, sought condonation of the delay, citing non-receipt of notices from the CIT(A) and learning about the ex-parte order only upon receiving recovery notices. The Revenue opposed the condonation. The ITAT condoned the delay.

What were the issues?

1. Whether the delay of 153 days in filing the appeal before the ITAT should be condoned, considering the assessee's submission of being a senior citizen and not receiving proper notices from the CIT(A)? (Question of fact and law) Assessee's contention: The assessee, a 70-year-old woman, was unaware of the CIT(A)'s order as notices were not served. She only came to know about it through recovery notices and immediately took steps to file the appeal, causing a delay of 153 days. This delay should be condoned in the interest of justice. Revenue's contention: The Revenue opposed the condonation of delay, arguing that the reasons provided by the assessee were insufficient and the appeal should be dismissed. 2. Whether the addition of Rs. 2,50,000/- made by the AO under Section 69A as unexplained money, representing cash deposited during demonetization, is justified, considering the CBDT's instructions regarding small deposits? (Question of law and fact) Assessee's contention: The assessee argued that the deposited amount of Rs. 2,50,000/- falls within the maximum amount not chargeable to tax as per CBDT Circulars and Press Releases. The AO failed to consider the details and documents submitted by the assessee regarding the source of the deposit, and therefore, the addition should be deleted. Revenue's contention: The Revenue relied on the findings of the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144,Section 139,Section 148,Section 142(1),Section 119

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: DR. ARJUN LAL SAINI

For Appellant: Shri Chetan Agarwal Ld. AR
For Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Hearing: 03/09/2025Pronounced: 12/09/2025

Assessee by : Shri Chetan Agarwal Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. , Ld. Sr. DR Date of Hearing : 03/09/2025 : 12/09/2025 Date of Pronouncement Date of Pronouncement ORDER Per, Dr. Arjun Lal Saini, AM: . Arjun Lal Saini, AM: The present appeal has been filed by the Assessee, against the order passed appeal has been filed by the Assessee, against the order passed appeal has been filed by the Assessee, against the order passed by the Learned Commissioner of Income Tax (Appeal), Ahmedabad/ National by the Learned Commissioner of Income Tax (Appeal), Ahmedabad/ National by the Learned Commissioner of Income Tax (Appeal), Ahmedabad/ National Faceless Appeal, Centre (NFAC), Delhi dated [hereinafter referred to as Faceless Appeal, Centre (NFAC), Delhi dated [hereinafter referred to as Faceless Appeal, Centre (NFAC), Delhi dated [hereinafter referred to as “CIT(A)”]22.11.2024 arising in the matter of assessment order passed u/s. arising in the matter of assessment order passed u/s.147 arising in the matter of assessment order passed u/s. r.w.s. 144 of the Income Tax Act, 1961 (here of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) after referred to as “the Act”) relevant to the Assessment Year 20 relevant to the Assessment Year 2017-18.

2.

Grounds of appeal

raised by the assessee, are as follows: Grounds of appeal raised by the assessee, are as follows: “Learned CIT(A) erred in law as well as on facts in setting aside an addition of Rs. erred in law as well as on facts in setting aside an addition of Rs. erred in law as well as on facts in setting aside an addition of Rs. 2,50,000/- u/s. 69A of the Act made by Ld. AO being entire cash deposited during u/s. 69A of the Act made by Ld. AO being entire cash deposited during u/s. 69A of the Act made by Ld. AO being entire cash deposited during

1. Savitaben N. Vadi demonetization as an unexplained money without considering the fact of the case. he demonetization as an unexplained money without considering the fact of the case. he demonetization as an unexplained money without considering the fact of the case. he ought to have decided the issue himself. the issue himself.”

3. The appeal filed by the assessee is barred by limitation by The appeal filed by the assessee is barred by limitation by 153 days. The 153 days. The assessee moved a petition for condonation of delay, requesting the Bench to assessee moved a petition for condonation of delay, requesting the Bench to assessee moved a petition for condonation of delay, requesting the Bench to condoned the delay. The Ld. Counsel for the assessee Ld. Counsel for the assessee submitted that assessee is that assessee is a women of 70 years old an nd she was not aware about passing the order of Ld. d she was not aware about passing the order of Ld. CIT(A) and notices were not served on notices were not served on the assessee by the Ld. CIT(A). by the Ld. CIT(A). The assessee came to know about assessee came to know about passing the order by Ld. CIT(A),(ex-parte parte)only when she received notices from the Income Tax Department for she received notices from the Income Tax Department for recovery recovery of tax. Then after the assessee took immediate step immediate steps to file the appeal before this Tribunal. In ile the appeal before this Tribunal. In this process, the delay of 153 days has caused, therefore Ld. Counsel this process, the delay of 153 days has caused, therefore Ld. Counsel prayed that this process, the delay of 153 days has caused, therefore Ld. Counsel delay should be condoned, in the interest of justice. in the interest of justice.

4. On the contrary, the Ld. Sr. DR for the revenue opposed the . On the contrary, the Ld. Sr. DR for the revenue opposed the prayer of the . On the contrary, the Ld. Sr. DR for the revenue opposed the assessee to condone the delay and stated that delay should not be condoned on the delay and stated that delay should not be condoned on the delay and stated that delay should not be condoned on such reasons, as explained by the assessee, and appeal of the assessee should be ppeal of the assessee should be dismissed.

5. I have heard both the parties on this . I have heard both the parties on this preliminary issue, I note that the assessee is issue, I note that the assessee is a senior citizen of 70 years old 70 years old.During the appellate proceedings the notices uring the appellate proceedings the notices of hearing were not issued by the Ld. CIT(A) by the Ld. CIT(A) and she came to know about passing the about passing the order by the learned CIT (A) order by the learned CIT (A)when demand notice was issued by the assessing by the assessing officer for recovery of tax.T .Then after she immediately took necessary step to file necessary step to file the appeal before this Tribunal the appeal before this Tribunal, and in this process the delay 153 days has delay 153 days has occurred. I have gone through the petition for condonation of delay, and the have gone through the petition for condonation of delay, and the have gone through the petition for condonation of delay, and the sufficient cause explained by the assessee, in the petition for condonation of delay, sufficient cause explained by the assessee, in the petition for condonation of delay, sufficient cause explained by the assessee, in the petition for condonation of delay, as reproduced above. The learned Counsel adverted The learned Counsel adverted my attention to the reasons for attention to the reasons for condonation of delay and urged for a benign view and sought condonation of delay condonation of delay and urged for a benign view and sought condonation of delay condonation of delay and urged for a benign view and sought condonation of delay 2 Savitaben N. Vadi of 153 days in filing the appeal days in filing the appeal. A perusal of the reasons and sufficient cause A perusal of the reasons and sufficient cause explained by the ld. Counsel for the assessee, gives explained by the ld. Counsel for the assessee, gives me an impression of existence sion of existence of mitigating circumstances to enable of mitigating circumstances to enable me to exercise my discretion in favour of the discretion in favour of the assessee. Accordingly, the delay is condoned in filing the appeal assessee. Accordingly, the delay is condoned in filing the appeal.

6.

Brief facts qua issue are that the Brief facts qua issue are that the, in this case, the assessee did not file her n this case, the assessee did not file her return of income for the A. Y. 2017 of income for the A. Y. 2017-18 as per provisions of section 139 of the I.T. Act, 18 as per provisions of section 139 of the I.T. Act, 1961. As per credible written information available with 1961. As per credible written information available with AO, the assessee , the assessee deposited cash of Rs. 2,50,000/ deposited cash of Rs. 2,50,000/- during demonetization period 09.11.2016 to during demonetization period 09.11.2016 to 30.12.2016 in her account held with Navanagar Co in her account held with Navanagar Co-Op Bank Ltd.. However, Op Bank Ltd.. However, assessee has not filed return of income for AY 2017 assessee has not filed return of income for AY 2017-18 and therefore source of the 18 and therefore source of the above cash deposit of Rs. 2,50,000/ above cash deposit of Rs. 2,50,000/- in the bank account remained unexplained. in the bank account remained unexplained. Therefore, the case of the assess Therefore, the case of the assessee for AY 2017-18 was re-opened and notice u/s opened and notice u/s 148 of the I. T. Act, 1961 was issued on 31.03.2021 after obtaining necessary 148 of the I. T. Act, 1961 was issued on 31.03.2021 after obtaining necessary 148 of the I. T. Act, 1961 was issued on 31.03.2021 after obtaining necessary approval from the competent authority. The assessee was required to file her return approval from the competent authority. The assessee was required to file her return approval from the competent authority. The assessee was required to file her return of income for the relevant period within 30 day of income for the relevant period within 30 days. However, no such return of s. However, no such return of income is filed. Subsequently, notice u/s 142(1) was issued on 15.11.2021 . Subsequently, notice u/s 142(1) was issued on 15.11.2021. . Subsequently, notice u/s 142(1) was issued on 15.11.2021

7.

Therefore, Assessing offi ficer noted that assessee failed to explain the source of assessee failed to explain the source of cash deposit of Rs. 2,50,000/ cash deposit of Rs. 2,50,000/-(excluding interest credited) in her bank account held her bank account held with Navanagar Co-operative Bank Ltd.. Therefore, amount of Rs.2,50,000/ operative Bank Ltd.. Therefore, amount of Rs.2,50,000/- is operative Bank Ltd.. Therefore, amount of Rs.2,50,000/ treated as unexplained and added to the total income u/s 69A of the I.T. Act for the treated as unexplained and added to the total income u/s 69A of the I.T. Act for the treated as unexplained and added to the total income u/s 69A of the I.T. Act for the year under consideration.

8.

Aggrieved by the order of the assessing officer, the assessee carried the matter in . Aggrieved by the order of the assessing officer, the assessee carried the matter in . Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), appeal before the Ld. CIT(A), which has set aside the order of the assessing officer which has set aside the order of the assessing officer with the direction to the assessing officer for making fresh assessment. with the direction to the assessing officer for making fresh assessment. with the direction to the assessing officer for making fresh assessment.

9.

Aggrieved by the order of the Ld. CIT(A) . Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. , the assessee is in appeal before us. 3 Savitaben N. Vadi 10. I have heard both the parties and perused t I have heard both the parties and perused the material available on record. he material available on record.At the outset, the Ld. Counsel for the assessee the outset, the Ld. Counsel for the assessee, submitted that assessee has deposited submitted that assessee has deposited of Rs. 2,50,000/- during the during the demonetarization period, which is the maximum period, which is the maximum amount,which is not chargeable chargeable to tax, as per the CBDT Circular. The assessee has he assessee has deposited 2,50,000/- in the demonetisation demonetisation period, which is the maximum amount maximum amount, which is not chargeable to tax to tax, hence should not be subject to addition should not be subject to addition. Besides, the Ld. Counsel submitted that during the assessment proceedings Ld. Counsel submitted that during the assessment proceedings, the , the assessee has submitted the required details and documents before the assessing officer, details and documents before the assessing officer, and details and documents before the assessing officer, source of Rs.2,50,000/-, which wa , which was deposited in the bank account. However, AO did not take into account, the submission of the assessee the submission of the assessee, therefore, Ld. Counsel herefore, Ld. Counsel contended that addition of Rs. 2,50,000/ hat addition of Rs. 2,50,000/- should be deleted.

11.

On the other hand, the Ld. Sr. DR for the revenue relied on the finding of the , the Ld. Sr. DR for the revenue relied on the finding of the , the Ld. Sr. DR for the revenue relied on the finding of the assessing officer.

12.

I have heard both the p parties. I find that CBDT has issued instruction CBDT has issued instruction,to the assessing officers as to how to examine of the case of cash deposit during the how to examine of the case of cash deposit during the how to examine of the case of cash deposit during the demonetization period and in said demonetization period and in said circular the CBDT has explained and narrated CBDT has explained and narrated facts that there should be blanked exemption of Rs. 2 facts that there should be blanked exemption of Rs. 2,50,000/- per person per person, vide instruction No. 03/2017, dated 21/02/2017, w dated 21/02/2017, wherein CBDT has explained that in herein CBDT has explained that in case of small assessee, like artisans, daily workers, housewives like artisans, daily workers, housewives, and small , and small assessee etc, then such small amount would not be questioned by such small amount would not be questioned by the Ld. AO up to Rs. 2,50,000/- per person. Taking into account, the facts narrate Taking into account, the facts narrated above, d above, I note that Instruction issued by the CBDT should be considered, vide Press Release dated Instruction issued by the CBDT should be considered, vide Press Release dated Instruction issued by the CBDT should be considered, vide Press Release dated 18.11.2016 and Guidelines for Verification of Cash deposit during demonetization 18.11.2016 and Guidelines for Verification of Cash deposit during demonetization 18.11.2016 and Guidelines for Verification of Cash deposit during demonetization to the AO vide Instruction No. 3/2017 to the AO vide Instruction No. 3/2017 [F.NO. 225/100/2017/ITA F.NO. 225/100/2017/ITA-II] dated 21.2.2017 and annexure thereof issued under section 119 of Income Tax Act, 2.2017 and annexure thereof issued under section 119 of Income Tax Act, 2.2017 and annexure thereof issued under section 119 of Income Tax Act, Savitaben N. Vadi which are discussing and providing a blanket exemption of Rs. 2,50,000/ and providing a blanket exemption of Rs. 2,50,000/- per and providing a blanket exemption of Rs. 2,50,000/ person. In the Press release dated 18.11.2016 also, it was stated that: person. In the Press release dated 18.11.2016 also, it was stated that: “It was announced by the Government “It was announced by the Government earlier that small deposits made in the banks by earlier that small deposits made in the banks by artisans, workers, housewives, etc. would not be questioned by the Income Tax artisans, workers, housewives, etc. would not be questioned by the Income Tax artisans, workers, housewives, etc. would not be questioned by the Income Tax Department in view of the fact that present exemption limit for Income Tax is Rs.2.5 Department in view of the fact that present exemption limit for Income Tax is Rs.2.5 Department in view of the fact that present exemption limit for Income Tax is Rs.2.5 lakh”.

13.

I note that assessee`s case was re case was re-opened u/s. 147 of the Act, by issuing notice by issuing notice u/s. 148 of the Act dated 31.03.2021 on the basis of the information that u/s. 148 of the Act dated 31.03.2021 on the basis of the information that assessee u/s. 148 of the Act dated 31.03.2021 on the basis of the information that had deposited total cash of Rs.2,50,000/ had deposited total cash of Rs.2,50,000/- in her Nawanagar Co-op. Bank during op. Bank during demonetizationperiod. The Assessmen Assessment order was framed u/s. 147 r.w.s. 144 of the framed u/s. 147 r.w.s. 144 of the Act by making addition of Rs. 2,50,000/ ct by making addition of Rs. 2,50,000/- u/s. 69A, as unexplained money. as unexplained money.I note that addition made by the assessing officer in the hands of the assessee of Rs. that addition made by the assessing officer in the hands of the assessee of Rs. that addition made by the assessing officer in the hands of the assessee of Rs. 2,50,000/- which is maximum amount which is maximum amount, which is not chargeable to tax. The assessee argeable to tax. The assessee under consideration has not filed Return of Income under consideration has not filed Return of Income.I note that Rs. 2,50,000/ I note that Rs. 2,50,000/- falls in the category of maximum amount which is in the category of maximum amount which is not chargeable to Tax ( not chargeable to Tax ( exempted slab), as noted in CBDT circ cular, in above Para, hence, the assessee hence, the assessee is not liable to pay the tax. Therefore, I delete the addition. re, I delete the addition.

14.

In the result, the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed.

Order is pronounced in the open court on Order is pronounced in the open court on 12/09/2025.

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