The Income Tax Department sent a tax notice to Mrs Devi (age 83 years old) from Vidhyadhar Nagar, Jaipur as she made an Fixed Deposit (FD), deposited some cash in bank and yet did not file any income tax return (ITR).
On May 14, 2007, Devi had invested Rs 2 lakh in a FD of Bank of Rajasthan for a two year term. This FD matured on May 29, 2009 and the bank deposited Rs 2.41 lakh in her account. She had also deposited Rs 1.06 lakh cash which represented her her savings from the family pension. Her mistake was she did not file an income tax return (ITR). So the Income Tax Assessing Officer (AO) sent her a Section 148 tax notice on March 29, 2017.
However, for reasons unknown, Devi did not respond to the tax notice. Therefore, the AO completed the assessment under Section 144 and determined her total income at Rs 5.15 lakh, which was unexplained.
The AO determined her income as:
| 1. | Estimated regular income | Rs 1.5 lakh |
| 2. | Cash deposit in bank account | Rs 1.06 lakh |
| 3. | Deposit through transfer (FD) | Rs 2.42 lakh |
| 4. | Interest income | Rs 16,940 |
| Total | Rs 5.15 lakh | |
Feeling wronged, she had filed an appeal before the JCIT (A) but did not submit any reply or written submission in response to the hearing notices issued to her. So the JCIT(A) asked for a remand report from AO and after that, the JCIT (A) upheld the Rs 5.15 lakh additions and dismissed Devi’s appeals.
Nine years had passed between the time she filed an appeal in JCIT (A) and the final order came. Thus after a long delay she filed an appeal in ITAT Jaipur. Advocate Ashish Sharma represented her before ITAT Jaipur who heard the case on August 6, 2026 and passed the judgement on August 21, 2026.
The ITAT Jaipur SMC bench which heard her case comprised of T.R. Senthil Kumar, Judicial Member and Prakash, Accountant Member. On August 21, 2026, she won the case in ITAT Jaipur.
How did she win the case in ITAT Jaipur?
Vipin Upadhyay, Partner at King Stubb and Kasiva, said to ET Wealth Online that Mrs Devi won the case in ITAT Jaipur because the income additions were made only because she was an elderly, non-responsive assessed who hadn’t filed an ITR, not because there was any actual evidence of undisclosed income. Once she produced her passbook and FD receipt (even at the appellate stage), the entire edifice of assumption collapsed.
Upadhyay says that his consistent advice to senior citizens is to file an ITR even where they believe their income falls below the taxable threshold. Under new tax regime, senior citizens do not need to pay any income tax if their total income is up to Rs 12 lakh thanks to enhanced Section 87A tax rebate. But for claiming the tax rebate, you need to file an ITR.
However, if a senior citizen’s income is up to Rs 3 lakh under old tax regime or Rs 4 lakh under new tax regime, filing an ITR is not mandatory. Super senior citizen get Rs 5 lakh basic exemption limit under old tax regime. There is also a limited ITR filing exemption for those above 75 years whose income is confined to pension and interest from a single specified bank, subject to a prescribed declaration.
According to Upadhyay, these thresholds, however, offer protection only so long as the Income Tax Department’s own data aligns with the taxpayer’s understanding of their position, and banks routinely report fixed deposit investments, interest credits and high-value cash transactions as a matter of course.
Devi’s case arose precisely because one such fixed deposit came to the Assessing Officer’s notice. In the absence of any ITR, computation or disclosure on record, the assessing officer had little choice but to complete a best-judgment assessment and treat the FD maturity, the cash deposits and an arbitrary ‘regular income’ estimate as taxable.
Even though Devi was eventually vindicated, but only after a reassessment notice issued nearly seven years after the relevant financial year, an unsuccessful first appeal, and a further appeal to ITAT Jaipur, a process spanning close to a decade.
Thus Upadhyay says that a timely ITR, even a nil or low-income one, creates the contemporaneous documentary trail that pre-empts this entire cycle. He says: “That is a particularly important safeguard for senior citizens, who are often the least equipped, years later, to locate old passbooks and fixed deposit receipts to defend transactions that a simple filing would have disclosed at the outset.”
Summary of ITAT Jaipur judgement
Fixed Deposit (FD) stood explained
The ITAT Jaipur noted that the maturity proceeds from the Rs 2 lakh FD Devi made in 2007 had triggered the assessment proceedings. The bank passbook entries from 2007 and 2009 supported this observation.
Thus, the ITAT Jaipur ruled that there is a direct link between the Rs 2.42 lakh maturity proceeds of the fixed deposit and the Rs 2 lakh deposit in 2007, and the amount so credited represents Devi’s own funds and not her income for the year under consideration.
ITAT Jaipur also observed that the income addition for this FD was made by the AO solely because Devi is an aged widow and had neither filed her ITR nor responded to the notices, and not on account of any material to show that the deposit was from an undisclosed source.
Thus ITAT Jaipur deleted this Rs 2.42 lakh addition.
Cash deposit also explained
ITAT Jaipur observed that Devi’s bank account passbook shows cash withdrawals aggregating Rs 2.45 lakh which is more than twice the amount of the cash deposits of Rs 1.06 lakh made by her in the year under consideration.
In the absence of any material to show that the amounts so withdrawn were spent or otherwise utilised, ITAT Jaipur said that it is reasonable to hold that the cash deposits were made out of those earlier withdrawals, more so in the case of an aged widow subsisting on family pension whose requirements and savings would ordinarily be modest.
So when Devi explained her source of cash deposit, the onus on proving it otherwise shifted to the AO, who seems to have come up with no evidence to suggest anything contrary.
The Rs 1.5 lakh estimated income addition was also deleted since the AO did not give any contrary evidence of that too. ITAT Jaipur said that additions or disallowances based on mere conjectures and surmises are not permissible in law, as has been laid down by the Supreme Court time and again.
This is how Devi won the case.
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