ITAT Jaipur Gives Taxpayer One More Chance To Disown Account Linked To His PAN In Unexplained Cash Deposit Case

The Income Tax Appellate Tribunal (ITAT) at Jaipur has remanded a case involving a Rs 76.31 lakh tax addition, holding that the taxpayer should be given one more opportunity to establish that a disputed bank account linked to his PAN did not belong to him.

A coram of Judicial Member Narinder Kumar and Accountant Member Annapurna Gupta said the issue warranted closer examination, and observed that the appellate authority ought to have allowed the taxpayer to place proper material on record before rejecting his claim.

The tribunal said the Commissioner (Appeals) “should have taken steps to enable the assessee-appellant to bring on record all the relevant material in support of his plea that he had no connection with the said bank account with The Kota Central Co-operative bank Ltd.”

The case relates to a Kota individual-Buniya Amin's assessment for the 2017-18 assessment year. The proceedings were reopened after the tax department received information about cash deposits of Rs 32.46 lakh in a savings account maintained with The Kota Central Co-operative Bank. As the reassessment progressed, the Assessing Officer identified two more bank accounts linked to Amin, another account with the same co-operative bank and one with State Bank of Bikaner and Jaipur. The total cash deposited across the three accounts was calculated at Rs 76.31 lakh.

Amin did not reply to the tax department's notices during the reassessment. With no explanation on record for the cash deposits found in his bank accounts, the assessing officer treated the entire amount as unexplained income and added it to his taxable income.

Before the Commissioner of Income Tax (Appeals), Amin said he was an agriculturist who also ran a small kirana business. He also claimed, for the first time, that one of the Kota Central Co-operative Bank accounts, which alone had deposits of over Rs 33 lakh, did not belong to him. According to him, the remaining deposits represented either redeposits of cash withdrawn earlier or income from agriculture and his small business.

The Commissioner rejected these explanations. The appellate authority said the bank account in question had been identified through Amin's PAN details.

It noted that he had produced only a photocopy of a bank document, which could not be independently verified. No identity records from the bank, no confirmation from bank officials, and no sworn statements were placed on record.

In these circumstances, the Commissioner said the denial of ownership appeared to be “an afterthought” and upheld the tax addition.

The Revenue opposed the plea, pointing out that he had remained non-compliant throughout the assessment proceedings and had raised the denial only at the appellate stage.

While acknowledging Amin's failure to participate earlier and his inability to discharge the burden before the Commissioner, the tribunal held that the nature of the issue justified another opportunity.

“Having regard to the seriousness of the issue involved, we deem it a fit case to afford another opportunity to the appellant,” the tribunal said. Accordingly, it set aside the appellate order and directed a fresh decision after granting him a further hearing.

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