PUNYA STHALI TIRTH TRUST ,UTTAR PRADESH vs. ITO WARD (EXEMPTION) WARD 2 (4) , DELHI

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ITA 7070/DEL/2025Status: DisposedITAT Delhi24 December 2025AY 2019-20Bench: SHRI VIKAS AWASTHY (Judicial Member)5 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 Section 69A is not applicable when the source of deposits is not doubted and TDS has been deducted on the interest income. The addition of interest income under Section 69A was directed to be deleted.

What were the facts?

The assessee earned interest income from a bank, on which TDS was deducted. The AO made an addition of this interest income under Section 69A of the Income Tax Act. The CIT(A) confirmed this addition.

What were the issues?

Whether interest income on which TDS has been deducted can be added under Section 69A of the Income Tax Act, and whether tax should be applied at maximum marginal rate or slab rate.

Which sections of the Income-tax Act were involved?

Section 69A,Section 133(6)

AI-generated summary — verify with the full judgment below

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

Hearing: 15/12/2025Pronounced: 15/12/2025

(A.Y.2019-20) Punya Sthali Tirth Trust, Gang Nahar Road Murad Nagar, Uttar Pradesh 201206 ...... अपीलार्थी/Appellant PAN: AABTP-8479-P बिाम Vs. Income Tax Officer, Ward (Exemption)-2(4), R.No.2409, E-2 Block, Civic Centre, Minto Road, ..... प्रनिवादी/Respondent New Delhi 110002 अपीलार्थी द्वारा/Appellant by : Shri C.S Anand, Ms. Vaishnavi Yadav & Aastha Sharma, Advocates प्रधििािीद्वारा/Respondent by : Shri Manoj Kumar, Sr. DR सुिवाई की निथर्थ/ Date of hearing : 15/12/2025 घोषणा की निथर्थ/ Date of pronouncement : 15/12/2025 आदेश/ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 26.09.2025, for Assessment Year 2019-20.

2.

Shri C.S Anand, appearing on behalf of the assessee submitted that the Assessing Officer (AO) has made addition of the interest income u/s.69A of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). The AO in assessment order has observed that on the interest income received from the bank, TDS amounting to Rs.96,816/- has been deducted. Once it is accepted that it is an interest income from the bank on which TDS has been deducted, no addition of such income could have been made u/s.69A of the Act. The assessee carried the issue in appeal before the CIT(A). The CIT(A) without appreciating the facts confirmed the addition made by AO. He further submitted that AO has taxed the total income determined at the maximum marginal rate instead of applying slab tax rate.

3.

Per contra, Shri Manoj Kumar representing the department submitted that the assessee neither participated in assessment proceedings nor furnished any submissions before the CIT(A). The ld. DR supporting the impugned order prayed for dismissing appeal of the assessee.

4.

Both sides heard, orders of the authorities below examined. The solitary issue in the instant appeal is taxability of interest income u/s.69A of the Act. It is an undisputed fact that the assessee has earned interest income on Term Deposits with Canara Bank during the period relevant to assessment year 2019-20. The AO has made enquiries from the Bank u/s. 133(6) of the Act. The Bank has confirmed that Term Deposits are from rollover of old term deposits. The AO has not raised any doubt over the source of term deposits. The bank has deducted tax at source Rs.96,816/-on interest income. The AO made addition of the interest income received by the assessee u/s.69A of the Act.

A bare reading of provisions of section 69A of the Act would show that the addition under said section can be made only where the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money which is not recorded in the books of account, if any maintained by him for any source of income, and no explanation about the nature and source of acquisition of money is explained or explanation offered to the AO is not to the satisfaction of the AO. In the instant case, the Assessing Officer has not doubted the source of Term Deposits in the bank. Once, the source of deposits in the bank have been accepted by the AO, interest on such term deposits could not have been added u/s.69A of the Act. Thus, the said addition is directed to be deleted. Hence, the addition of interest u/s.69A of the Act is liable to be deleted.

5.

The next grievance of the assesee is that the AO has taxed interest income on maximum marginal rate instead of slab rate. Considering entire facts of the case, I deem it appropriate to restore the issue back to the file of AO for re-examination and apply tax rate on taxable income, if any, in accordance with law.

6.

In the result, appeal of the assessee is allowed, in the terms aforesaid.

Order pronounced in the open court on Monday the 15th day of December, 2025.

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