Tax Officer Identifies Rs 5.15 Lakh Unexplained Income for Senior Citizen with Fixed Deposit and Cash Deposit
A senior citizen woman has successfully contested a nine-year-long tax dispute with the Income Tax Department, culminating in a favorable ruling from the Income Tax Appellate Tribunal (ITAT) Jaipur. The case began when the woman received a tax notice for failing to file an income tax return (ITR) after making a fixed deposit and depositing cash into her bank account. The Income Tax Assessing Officer (AO) subsequently assessed her income at Rs 5.15 lakh, treating the amount as unexplained.
Background of the Case
In May 2007, the woman invested Rs 2 lakh in a two-year fixed deposit, which matured in May 2009, yielding Rs 2.41 lakh. During this period, she also deposited Rs 1.06 lakh in cash, which she claimed was derived from her family pension savings. The AO issued a notice under Section 148 on March 29, 2017, after she failed to respond to earlier communications. The assessment included estimated regular income, cash deposits, fixed deposit proceeds, and interest income, totaling Rs 5.15 lakh.
Despite challenging the assessment before the Joint Commissioner of Income Tax (JCIT), the woman did not submit any written responses, leading to the JCIT upholding the AO’s additions. After nearly nine years, she escalated the matter to the ITAT Jaipur.
ITAT Jaipur’s Ruling
The ITAT Jaipur ruled in favor of the woman, noting that the additions to her income were primarily based on her non-responsiveness rather than concrete evidence of undisclosed income. Upon presenting her bank passbook and fixed deposit receipt, the tribunal found that the assumptions behind the AO’s additions were invalid. The tribunal established a direct link between the fixed deposit maturity proceeds and the original investment, concluding that these funds were her own and not taxable income.
The tribunal also examined the Rs 1.06 lakh cash deposits, determining that they likely originated from prior cash withdrawals, as her bank records showed significant withdrawals exceeding the deposits. The ITAT emphasized that the burden of proof shifted to the AO once the woman provided a plausible explanation for her cash deposits. The AO failed to present evidence to counter her claims, leading to the deletion of the Rs 1.5 lakh estimated income addition as well.
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