Cash Deposits in Bank Account Opened With Forged KYC Cannot Be Taxed: ITAT Delhi

ByCA Sandeep KanoiIncome TaxFeatured , Judiciary

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Summary: The Income Tax Appellate Tribunal, Delhi Bench “B”, considered the Revenue’s appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, which had deleted an addition of Rs.5,25,47,500/- made under section 69A of the Income-tax Act, 1961 in the hands of Pankaj Batra. The assessee had also filed Cross Objection No. 136/Del/2026. The Tribunal ultimately dismissed both the Revenue’s appeal and the assessee’s cross objection.

The order records that the assessee filed his return of income declaring total income of Rs.4,32,100/-. His case was selected for scrutiny through CASS on the basis of cash deposits during the demonetisation period. Notice under section 143(2) and subsequently notice under section 142(1) with questionnaire were issued. The assessment was completed under section 143(3).

During the assessment proceedings, the assessee stated that he was operating only one bank account with Kotak Mahindra Bank, Sector-63, Noida. He disputed ownership of another account bearing No. 2045201012033 maintained with Canara Bank, Kaithal Branch, Haryana, in which cash of Rs.5,25,47,500/- had been deposited during the demonetisation period. According to the assessee, a forged account had been opened using his documents and KYC, and he had lodged a complaint with the police alleging involvement of the Branch Manager.

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