Mr Ram Singh, a senior citizen, received an income tax notice for an alleged unexplained cash deposit of Rs 65.27 lakh in his savings account at Punjab National Bank (PNB)’s Tapukara branch. The Income Tax Assessing Officer from Alwar treated the amount as unexplained, as he did not know that Ram Singh got a pension and some interest income from his fixed deposits (FDs).
Moreover, Ram Singh, for his part, just submitted his bank passbook to the tax officer and told him about his pension and FDs. So, the AO did not believe him.
When Ram Singh’s case reached the Commissioner of Appeals (CIT A), the CIT (A) categorically observed that no cash was deposited in Ram Singh’s bank account but held that Ram Singh had not properly explained the source of credits in his bank account.
The CIT (A) said that Ram Singh is only making a story to cover up the unexplained cash deposit made in his bank account during the year. Thus, on February 9, 2024, the CIT (A) upheld the AO’s action of making Ram Singh liable to pay tax on the Rs 65.27 lakh unexplained cash deposit.
However, the bank statement furnished on record before the CIT(A) clearly contained narration of the source of credits in his bank account.
Unfortunately, before an appeal could have been made before the ITAT Jaipur, Ram Singh passed away. So, his son continued the battle with the help of chartered accountant P.C. Parwal.
CA P.C. Parwal argued before the ITAT Jaipur that the bank statement from PNB itself carried the narration explaining that the credit entries in the bank account were primarily related to interest income received by Ram Singh and/or pension received by the assessee during the year.
On September 24, 2026, Ram Singh (through his son) won the case in the ITAT Jaipur, as the tax tribunal cancelled the unexplained cash deposit tax notice. This case was heard by Annapurna Gupta, accountant member and T.R. Senthil Kumar, judicial member of the ITAT Jaipur.
Why did Ram Singh win the case?
Advocate Shourya Garg, Founder of Garg & Garg Tax Associates said to ET Wealth Online that the main reason Ram Singh succeeded was that the bank records did not support the addition’s foundation. The Income Tax Department classified Rs 65.27 lakh as unexplained cash deposits under Section 69A. Yet the CIT(A) noted in reviewing the bank statement that no cash deposit of that amount appeared in the account.
Even so, the addition stood on the assumption that the cash source remained unclear. The Tribunal regarded this contradiction as decisive. It also observed that the bank statement included notes indicating the credits were mainly from pension and FD interest. Once no actual cash deposit existed and the credit nature was clear from the records, there was no ground to uphold the addition under Section 69A.
What should senior citizens do if depositing large cash amounts in bank?
Garg says that the key lesson from this ITAT Jaipur judgement for senior citizens is to keep the financial records well organized, especially for pension, FD interest, investment proceeds, and other large bank credits. A bank statement alone may not suffice; taxpayers should be able to clarify the nature and source of major entries with documents such as pension records, FD certificates, and interest statements.
Garg says that if a tax arrives, the reply should address the specific transactions along with proper documentation, cited by the Department rather than offering a general denial. It is equally vital to verify whether the notice’s claim matches the entries in the bank account.
Ram Singh’s case illustrates that a factual mismatch can matter. If the taxpayer is deceased, the legal heir should maintain the records and respond within the deadline.
ITAT Jaipur discussion
The ITAT Jaipur observed that CA P.C. Parwal rightly pointed out that the basis on which CIT (A) confirmed the unexplained cash deposit in Ram Singh’s hands is not correct.
The ITAT Jaipur said: “The counsel (CA P.C. Parwal) for the assessee (Ram Singh), however, has fairly demonstrated before us (the ITAT Jaipur) that the bank statement itself carried narration of the nature of credit entries being primarily in the nature of pension and FD interest credited therein.”
Therefore, the ITAT Jaipur said that the grounds on which the CIT(A) claimed that Ram Singh had not explained the source of the credit entries in the bank account are found to be factually incorrect based on the records themselves.
The ITAT Jaipur also observed that the CIT (A), despite categorically recording the fact that no cash had been deposited in Ram Singh’s bank account, went on to confirm the actions of AO after reviewing the evidence and documents.
The ITAT Jaipur, thus, said that they agree with CA P.C. Parwal, since the CIT(A) had himself found that no cash was deposited in Ram Singh’s bank account. So, there was no basis for treating any amount as unexplained cash deposits.
The ITAT Jaipur said it is well established in the present case that the entire amount deposited in Ram Singh’s bank account, amounting to Rs 65,27,171, was not in cash and was by way of credit entries, a fact also accepted by the CIT(A). The bank statement clearly mentioned the source of these credits as pension payments and interest income from FDs received by the assessee.
Thus, the ITAT Jaipur, based on the above discussion, deleted the Section 69A unexplained cash deposit tax notice and gave Ram Singh (through his son) relief.
