Saritha Mankal vs. The Income Tax Officer

Parties Involved

Facts Summary

During the previous year relevant to the assessment year 2017-18, the assessee had invested an amount of Rs.4,50,000/- in Kapil Chits Pvt. Ltd. Based on this fact, the jurisdictional Assessing Officer believed that the said amount had escaped from assessment and hence, issued a notice under section 148 of the Income Tax Act, 1961 on 28.07.2022. The Assessing Officer issued a detailed questionnaire under section 142(1) of the Act on 17.01.2023. As the assessee did not respond, a show cause notice under section 144 of the Act was issued on 17.04.2023. On 21.04.2023, the assessee filed an explanation without any supporting documents. The Assessing Officer inferred that the assessee had intentionally avoided depositing the said amount in the bank account as it was unaccounted money. The Assessing Officer completed the assessment, making an addition of Rs.4,50,000/- under section 69A of the Act and passed the assessment order on 12.05.2023. The assessee filed an appeal before the Commissioner of Income Tax (Appeals), which was dismissed.…

Legal Issues

• 1. Whether the addition of Rs.4,50,000/- as unexplained money under section 69A of the Income Tax Act, 1961 made by the Assessing Officer is justified.
• 2. Whether the First Appellate Authority failed to appreciate the fact that the appellant has filed her return of income under section 139(1) and confirming the proceedings initiated under section 147 on the ground that she has not filed return of income is bad in law.
• 3. Whether the First Appellate Authority is not justified in making addition of unexplained investment under section 69A and bringing the same to tax under section 115BBE ignoring the fact that the appellant has sufficient sources.

Judgment Outcome

Decided in favour of Assessee.

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