Bank certificate stating fixed deposits not belonged to assessee, discharged him of onus

Bank certificate stating that fixed deposits did not pertain to the assessee, despite PAN of assessee used, the onus casted upon the assessee stood discharged – ITAT

In a recent judgment ITAT Mumbai deleted addition u/s 69A observing that once the bank issued a certificate stating that the fixed deposits did not pertain to the assessee, despite the PAN of the assessee being used, the onus casted upon the assessee stood discharged.

ABCAUS Case Law Citation:
4561 (2025) (05) abcaus.in ITAT

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

The appellant assessee did not file return of income for the relevant Assessment Year. On the basis of information received to the effect that the Assessee held large amount of deposits with a bank, reassessment proceedings were initiated in the case of the Assessee and noticed under Section 148 of the Act was issued.

Since, the Assessee did not responded to the aforesaid notice, and therefore, the Assessing Officer completed the assessment vide Assessment Order under Section 144 read with Section 147 of the Act after making addition of the amount of fixed deposits in the hands of the assessee by invoking provisions contained in Section 69A of the Act.

Being aggrieved, the Assessee has preferred the appeal before the CIT(A) which was dismissed by the CIT(A).

The Tribunal observed that the addition was made on the basis of that the Fixed Deposits allegedly held in the name of the Assessee.

The Tribunal observed that before the CIT(A), the assessee had furnished Banker’s Confirmation Letter issued by the concerned bank stating the Fixed Deposits did not belong to the Assessee or her son. However, the CIT(A) rejected the same observing that it was obligatory on the part of the Assessee for furnish the details and confirmation from the persons who had made fixed deposits using her the Permanent Account Number (PAN).

The Tribunal opined that the approach adopted by the CIT(A) cannot be countenanced. The assessee had clearly stated that the fixed deposits did not belong her. The concerned bank had also issued the confirmation to this effect. The CIT(A) had not doubted the authenticity of the confirmation or the contents of the said confirmation. The CIT(A) declined to grant relief stating that the Assessee should file confirmation from the persons who made deposits using her PAN despite the fact the fact that she had stated in the statement of fact that she was 85 years of age and that did not anyone to take care of tax matters.

The Tribunal observed that the very basis of making additions in the hands of the assessee was the information with the Assessing Officer that the fixed deposits were linked to the PAN of the Assessee. Once the concerned bank had issued a certificate stating that the aforesaid fixed deposits did not pertain to the Assessee, the onus casted upon the Assessee stood discharged.

Therefore, the Tribunal held that additions made in the hands of the assessee under Section 69A of the Act cannot be sustained and was deleted.

It was clarified that the Revenue would be at liberty, as is available under law, to carry out such enquires/investigations/action in relation to the fixed deposits reflected in the PAN of the Assessee but not belonging to the Assessee as per the certificate issued by the bank.

As regards, addition on two fixed deposits belonging to the assessee, the Assessee had explained that the source of the fixed deposits was inheritance received on death of her husband. Since the Assessee had expired, the legal heir of the Assessee was directed to file relevant documents/details in support of the aforesaid contention before the Assessing Officer and the Assessing Officer was directed to examine the issue afresh in respect of said fixed deposits after taking the same into consideration and the addition made by the Assessing Officer under Section 69A of the Act was set aside. All the rights and contentions (including the availability of basic exemption limit to the Assessee) were left open. 

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