Addition deleted as banks wrongly associated PAN of assessee with ATM Cash Account

Addition u/s 69A deleted as assessee was an employee authorized for replenishment of cash in ATM machines and bank wrongly associated his PAN

In a recent judgment, ITAT Agra upheld deletion of addition u/s 69A as assessee was an employee authorized for replenishment of cash in ATM machines of the bank which wrongly associated the PAN number of employee with that ATM Cash current Account.

ABCAUS Case Law Citation:
4820 (2025) (10) abcaus.in ITAT

In the instant case, the Revenue had challenged the order passed by the CIT(A), National Faceless Appeal Centre (NFAC) in deleting addition under section 69A of the Income Tax Act, 1961 (the Act).

The assessee had not filed return of income for the year under consideration. The database of Revenue (INSIGHT Portal) revealed that assessee made a withdrawal of cash amounting to more than Rs. 8 crores from bank.

Notice u/s 148 of the Act was issued and served on the assessee but the assessee did not respond to the same. Thereafter, notices were issued u/s 142 and assessee was requested to furnish the details of cash withdrawals made explaining the nature of transactions, documentary evidences thereof and name, PAN and address of parties to whom cash paid after withdrawals along with documentary evidences thereof.

The assessee was also requested to furnish the source of cash withdrawals made showing the name, PAN and address of parties from whom credits received which were used for cash withdrawals together with nature of transactions with said parties and documentary evidences thereof and substantiate that both withdrawals and credits/deposits are from explainable source.

However, no replies/submissions were made by the assessee. Further, vide notice assessee was show caused as to why assessment should not be completed to best of judgment as no compliances done.   Also, notice u/s 133(6) was sent to Bank and the bank submitted its reply in ITBA.

On perusal of reply/bank statement from bank, it was found that the said bank account was credited with nearly Rs. 9 crores. The Assessing Officer observed that assessee during the course of proceedings was not able to explain the nature and source of credits and it was out of the said credits that, cash was withdrawn.

In absence of any replies/submissions, Assessing Officer observed the source of credits and nature thereof completely unexplainable. Accordingly, the credits/deposits in the said bank account were added in total income of assessee u/s 69A r. w.s 115BBE of the Act as unexplained Money.

The CIT(A) observed that the assessee was merely a small employee of the service provider company to the banks for cash. The assessee was an authorized signatory for replenishment of cash in ATM machines of the bank during the relevant Assessment Year.

The CIT(A) further observed that those cash withdrawal and deposit transaction did not pertains to the assessee. Cash withdrawal through bearer cheque by the assessee from current account belonged to Bank through Security Service company.

As a result, the CIT(A) directed the Assessing Officer to delete the addition under section 69A of the Act.

The Tribunal observed that the assessee was an employee of a Security Services company. That company was providing services to various banks for replenishing the Cash into their ATM machines. The Assessee was authorised by his Company to accept the cash from the Banks branches and then replenish it into the ATM machines connected with those branches.

The Tribunal further observed that transactions of cash deposit and withdrawal had been done for and on behalf of the bank branches only which was supported by the certificates issued by the concerned banks.

The Tribunal also observed that those banks had wrongly associated the PAN number of the employee assessee with that ATM Cash current Accounts, therefore, these cash replenishment transactions were reflected in AIS at the PAN number of the assessee due to the mistake committed by the Bank. However, these current accounts were not in the name of the assessee.  

The Tribunal opined that these transactions did not represent any income of the assessee but were part of his employment-related responsibilities.  The assessee was a small salaried employee working under the instructions of his employer and had no personal ownership or benefit in these transactions. Also, certificates/confirmation letters issued by the concerned bank branches confirmed that the transactions were related to ATM cash replenishment only.

Accordingly, the Tribunal held that CIT(A) had passed a speaking order and dismissed the appeal of the Revenue.

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