6 days ago
ITAT Grants Taxpayer Final Chance After Rs 11.22 Crore Additions
A taxpayer said he earned only Rs 1.79 lakh, but the tax department found several large transactions in his accounts.
These included cash deposits, loans, money owed by customers and agricultural income.
The department said the taxpayer had not provided enough documents to explain them.
It therefore treated about Rs 11.22 crore as additional taxable income.
The first appeal authority agreed with the tax department.
The taxpayer then asked the tribunal for one final chance to show the missing evidence.
The tribunal agreed to send the case back for checking, but required the taxpayer to plant 500 trees or pay an approved environmental group within one month.
If he does not meet that condition, the earlier decision and tax additions will come back into force.
A Yamuna Nagar taxpayer declared income of Rs 1.79 lakh and agricultural income of Rs 3 lakh for assessment year 2017-18.
The Assessing Officer added about Rs 11.22 crore for cash deposits, unsecured loans, sundry creditors and unsubstantiated agricultural income.
The additions included Rs 85.93 lakh in demonetisation-period cash deposits, Rs 9.26 crore in unsecured loans and Rs 1.07 crore in sundry creditors.
The ITAT restored the case to the Assessing Officer for fresh verification of supporting documents, without deciding the additions on their merits.
The taxpayer must plant and maintain 500 trees or pay the specified cost to an NGO within one month, or the earlier dismissal will be restored.
- Who
- Ranbir Singh, a taxpayer from Yamuna Nagar, and the Income Tax Department.
- What
- The Income Tax Appellate Tribunal gave Singh one final opportunity to substantiate transactions behind approximately Rs 11.22 crore in tax additions.
- Where
- The case was heard by the Chandigarh Bench of the Income Tax Appellate Tribunal; the trees were to be planted at the Yamuna Bank Panipat-Samalakha site.
- When
- The ITAT order was dated 14 August 2026; the plantation or payment condition had to be completed within one month of the order.
- Why
- The Tribunal found that the disputed transactions required verification of relevant documents, while making the fresh opportunity conditional on environmental compliance.
Taxpayer’s Position
Revenue’s Position
Request for another opportunity
Taxpayer’s Position
The taxpayer did not seek immediate deletion of the additions and asked for one final opportunity to submit documents and substantiate the transactions.
Revenue’s Position
The Revenue relied on the findings of the CIT(A), which had upheld the assessment based on the material available on record.
Evidence behind transactions
Taxpayer’s Position
The taxpayer argued that the cash deposits, loans, creditors and other issues required proper verification of underlying records.
Revenue’s Position
The tax authorities said the taxpayer had not furnished confirmations and supporting evidence establishing the identity and creditworthiness of lenders and creditors or the genuineness of the transactions.
Effect of non-compliance
Taxpayer’s Position
The taxpayer received conditional relief through a remand to the Assessing Officer, subject to planting the trees or paying the specified NGO.
Revenue’s Position
The Tribunal stated that failure to meet the condition within one month would restore the CIT(A)’s order and result in dismissal of the appeal.
Key facts
- Declared taxable income
- Rs 1,79,160 for assessment year 2017-18
- Agricultural income declared
- Rs 3 lakh
- Cash deposits questioned
- Rs 85.93 lakh during the demonetisation period
- Unsecured loans questioned
- Rs 9.26 crore
- Sundry creditors questioned
- Rs 1.07 crore
- Total additions
- Approximately Rs 11.22 crore
- Conditional requirement
- Plant and protect 500 trees or pay the requisite cost to the identified NGO within one month
Quotes
CA (Dr.) Suresh Surana
Chartered Accountant commenting on procedures for submitting additional tax evidence
“Where the CIT(A) does not admit the evidence or the matter has already reached the ITAT, the taxpayer may seek admission of additional evidence under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963.”
financialexpress.com
“The taxpayer must demonstrate a genuine reason for submission of additional evidence and submit the evidence with an application under Rule 46A before the CIT(A) or Rule 29 before the ITAT.”
financialexpress.com
Sources
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