Income Tax Appellate Tribunal – Agra
Smt. Uma Agarwal, Gwalior vs Ito-1(3), , Gwalior on 18 June, 2021 In the Income-Tax Appellate Tribunal,
Agra Bench, Agra
Before : Shri Laliet Kumar, Judicial Member And
Dr. Mitha Lal Meena, Accountant Member
ITA No.35/Agr/2021
Assessment Year 2017-18
Smt. Uma Agrawal V.S. I.T.O -1( 3)
Baba Kapur Sunaran Ka Mohalla, Gwalior, M.P.
Rajaji Ka Bada
Gwalior M.P.
PAN: BDPPA6915F
(Appellant) (Respondent)
Appellant by Mr Manuj Sharma Adv and Rajender
Sharma adv
Respondent by Sh. Mazhar Akram, Sr. DR
Date of Hearing 14.06.2021
Date of Pronouncement 18 .06.2021
ORDER
Per Laliet Kumar, J.M.
This appeal filed by the assessee against the Order dated 25/03/2021
by the National Faceless Appeal Centre, the following grounds raised as
under: –
“1. On the facts and in the circumstances of the case the learned
CIT (A) was not justified on facts and in law in not accepting
ITA 35/Agr/2021 2
appellant’s explanation about cash deposit of Rs. 211500/- in bank
during demonetization period and confirming the Assessing officer’s
order treating the cash deposit of Rs. 211500/- as unexplained money
u/s 69A. The addition of 211500/- may kindly be deleted or in the
alternative suitable relief be allowed.
2. The appellant craves leave to add, amend, alter, modify or
substitute any ground at the time or before hearing of appeal.”
Brief Facts
1. The appellant, an individual filed return of income for Assessment
Year 2017-18 on 13/03/2018, declaring total income of Rs.
1,30,810/-.
2. During the period of demonetization, the assessee deposited the
cash of Rupees 211500 /-in our bank account. It was the case of
the assessee that the assessee had collected/ saved the above said
sum from her previous saving, given by her husband, son, relatives
for the purposes of her and family future.
3. The case of the assessee was selected for scrutiny assessment for
the reason that the cash was deposited in the bank after the
demonetization scheme, announced by the revenue.
4. During the course of assessment proceedings, the appellant was
asked to explain the cash deposits of Rs. 2,11,500/- in the Nagrik
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Sahkari Bank, made during the period of demonetization from
09/11/2016 to 30/12/2016.
5. In response to the notice issued by AO the assessee filed the reply
to the notice . It was submitted by the assessee that the assessee
has no business activities in a name and she only on the income
from interest on her saving.
6. The assessee was asked to produce the evidence in support of her
cash deposit in the bank during the demonetisation.
7. The assessing officer has made the addition of Rupees 2, 11, 500/-
to the income of the assessee treating the amount deposited in the
bank as unexplained money under section 69A read with 115BBE
of the income tax Act 1961.
8. Feeling aggrieved by the order passed by the assessing officer the
assessee filed the appeal before the Commissioner appeal (NFAC).
NFAC had dismissed the appeal filed by the assessee, by
mentioning in the order as under:
“The appellant submitted that the Assessing Officer erred in
making addition of Rs. 2,11,500/-, without any basis. The
appellant submitted that the cash deposited in the bank
during the period of demonetization was out of her previous
savings and savings from money given by her husband and
her son for household expenses and savings for future
safeguard of family from the scheme “Streedhan”.
4.2 The appellant submissions were carefully considered. It is
observed from the assessment order that the appellant was
given numerous opportunities to explain the cash deposit. The
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appellant simply submitted that it is out of her savings but did
not submit any evidence in this regard. Even during the
course of appellate proceedings, no evidence was furnished
to prove the deposits were made out of previous savings. It
appears that the appellant did not have any source of income.
For the assessment year 2015-16 and 2016-17, the appellant
declared income of Rs. 94,360/- and Rs. 94,030/-. It could
not be believed that a person having annual income of less
than Rs. 1 lakh was able to accumulate Rs.2 lakh in cash,
which was deposited during demonetization period.
4.3 The Assessing Officer observed that the cash the cash
deposits made during the Financial Year 2015-16 and during
the period of 01/04/2016 to 08/11/2016 was ‘Nil’. The only
cash deposits made by the appellant, was during the period
of demonetization. Similarly, there were no cash deposits
made in the appellant’s other banks accounts namely State
Bank of India (a/c no. 33379918764) and Syndicate Bank of
India (a/c no. 77802200001181 ).
4.5 In view of the above, the appellant’s submissions that
the cash deposits were made out of the previous savings
cannot be accepted. The addition made by the Assessing
Officer of Rs. 2,11,500/- is confirmed. This ground of appeal
is dismissed.”
9. Feeling aggrieved by the order passed by the NFAC on 25.03.2021,
the assessee is in appeal before us on the grounds mentioned
hereinabove
10. The Ld.AR for the assessee had made elaborate submissions
on the aspect of the income/notional income of the housewives. He
had submitted that the housewives are doing innumerable
economic activities, if those activities are hired from outside, then
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huge sum would be required to get the same kind of services. He
had explained that women gives birth to the child, take care of the
family, cook food, maintain house, manage finances of kitchen,
contribute in household business/work, work in the field, discharge
duties as nurse, teacher, caretaker etc. Thereafter had submitted
that though house wife are normally not going out of home for
earning but they are financially contributing in the families by
means of above service . He had submitted that for the selfless and
caring nature of House wife , they are not charging any amount
for the services.
11. He further emphasized that it is a matter of common
knowledge that, mother/wife and other ladies are saving money/
funds received by them either from the family or husband or
children, for the rainy days.
12. It was contention of the Ld.AR that considering the above
aspect into mind, the Hon’ble Prime Minister had declared that the
revenue will not probe the accounts of individuals, housewives if
the deposits made in the bank account were below Rs 2,50, 000/-
, during Demonetization Scheme 2016. The Ld.AR had also drawn
our attention to CBDT public notice dated 18th Nov 2016 and
guidelines for Verification of Cash deposit during demonetization to
the AO , vide Instruction No. 03/2017 Dated 21st of February,
2017 and annexure thereof issued under section 119 of Income
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Tax Act . We are reproducing the relevant excerpts of
F.No.225/100/2017/ITA-11 ,Annexure “Source Specific General
Verification Guidelines” it provides as under :
1. Cash out of earlier income or savings
1.1 In case of an individual (other than minors) not having
any business income, no further verification is required to be
made if total cash deposit is up to 2.5 lakh. In case of
taxpayers above 70 years of age, the limit is Rs. 5.0 Iakh per
person. The source of such amount can be either household
savings/ savings from past income or amounts claimed to
have been received from any of the sources mentioned in
Paras 2 to 6 below. Amounts above this cut-off may require
verification to ascertain whether the same is explained or not.
The basis for verification can be income earned during past
years and its source, filing of ROI and income shown therein,
cash withdrawals made from accounts etc .
13. On the basis of the above it was submitted that even as per the
instructions of the Board, which are statutory and binding on the
rervenue, assessing officer has no mandate to tax the cash deposit
made in the bank account by the housewife if the amount is less than
2.5 lakh, during the Demonetization Scheme of 2016.
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14. Mr Manuj Sharma Adv had also relied upon the recent decision of the
Hon’ble Supreme Court in the matter of Kirti vs Oriental Insurance
company Civil Appeal no 19-20 of 2021 decided on 5.1.2021 ( para
24-27 ). On the above basis of the above decision it was submitted
that Sc had acknowledge income/ notional income of House wife and
if Rs 2,21,000/ was deposited by the assessee than it should be
presumed that said amount was deposited out of her saving or other
income hence the addition made by the assessing officer and
confirmed by the National Faceless Appeal Centre are required to be
struck down.
15. Per contra DR for the revenue had vehemently relied upon the order
passed by the assessing officer as well as by the CIT (A).
16. We have considered the rival contention of the parties and perused
the material available on record, including the judgments cited at bar
during hearing by both the parties. In Indian culture women have
special place, this had been recognised from the time of Vedas and
Purans. To illustrate it is mentioned in Manusmriti that
यत्र नाययस्तु पूज्यन्ते रमन्ते तत्र दे वतााः ।
यत्रैतास्तु न पूज्यन्ते सवायस्तत्राफलााः क्रियााः ।। मनुस्मृक्रत ३/५६ ।।
Anvaya: यत्र तु नाययः पू ज्यन्ते तत्र दे वताः रमन्ते, यत्र तु एताः न पूज्यन्ते तत्र सवाय ः क्रियाः अफलाः
(भवन्तन्त) ।
ITA 35/Agr/2021 8
जहााँ न्तिय ों की पूजा ह ती है वहााँ दे वता क्रनवास करते हैं और जहााँ न्तिय ों की पू जा नही ह ती है ,
उनका सम्मान नही ह ता है वहााँ क्रकये गये समस्त अच्छे कमय क्रनष्फल ह जाते हैं ।
Where women are worshiped, there lives the Gods. Wherever they are not
worshiped, all actions result in failure.
शोचन्तन्त जामयो यत्र क्रवनश्यत्याशु तत्कुलम् ।
न शोचन्तन्त तु यत्रैता वर्यते तन्ति सवयदा ।। मनुस्मृक्रत ३/५७ ।।
Anvaya: यत्र जामयः श चन्तन्त तत् कुलम् आशु क्रवनश्यक्रत, यत्र तु एताः न श चन्तन्त तत् क्रह सवयदा वर्यते
।
क्रजस कुल में न्तियााँ कष्ट भ गती हैं ,वह कुल शीघ्र ही नष्ट ह जाता है और जहााँ न्तियााँ प्रसन्न रहती है वह
कुल सदै व फलता फूलता और समृद्ध रहता है । (पररवार की पुक्रत्रय ,ों बर्ुओ,ों नवक्रववाक्रहताओों आक्रद जै से
क्रनकट सोंबोंक्रर्क्रनय ों क ‘जाक्रम’ कहा गया है ।)
The family in which women (such as mother, wife, sister, daughter et al.)
are full of sorrow that family meets its destruction very soon; while the
family in which they do not grieve is always prosperous.
17. From the ancient time, women in India are having special place in
family and society. We have many woman as role model in Indian
history to a name a few Mata Zizabai ( Mother of Chaterpati Shivaji
Maharaj ) , Ahaliya Bhai , Laxmi Bai, Phoole , Anne Besant , Captain
Lakshmi Swaminathan (better known as Lakshmi Sahgal), of INA,
though were house wife, but had contributed a lot as and when
occasion so demanded .Further many housewives had even
contributed by way of cash and jewelry during freedom movement.
18. On July 13, 1927, Mahatma Gandhi addressed a gathering at the
Mahila Seva Samaja in Basavanagudi. Gandhi encouraged women to
be change-makers and contribute to the Freedom movement and
ITA 35/Agr/2021 9
Harijan Movement by donating their streedhan and other money.
Similar call was given Former PM Pt Nehru, during 1962 war thereby
calling on the women of India to give their jewelry to the cause. Above
said had been recorded here just to show that women in India were
always saving some money for the family.
19. The Housewife contribution in the family is immeasurable. Hon’ble
Supreme court had recently in the matter of Kirti vs OIC (2021) 2 SCC
166 (supra) had recognized and reiterated the concept of income /
notional income of house wife , through ( Hon’ble J N V Ramana ( in
concurring decision) , had laid down guidelines for arriving at income
/ notional income in the following manner
7. Before discussing this topic further, it is necessary to comment
on its gendered nature. In India, according to the 2011 Census, nearly
159.85 million women stated that “household work” was their main
occupation, as compared to only 5.79 million men.
8. In fact, the recently released Report of the National Statistical
Office of the Ministry of Statistics & Programme Implementation,
Government of India called “Time Use in India2019”, which is the first
Time Use Survey in the country and collates information from 1,38,799
households for the period January, 2019 to December, 2019, reflects
the same gender disparity. The key findings of the survey suggest that,
on an average, women spend nearly 299 minutes a day on unpaid
ITA 35/Agr/2021 10
domestic services for household members versus 97 minutes spent by
men on average. Similarly, in a day, women on average spend 134
minutes on unpaid caregiving services for household members as
compared to the 76 minutes spent by men on average.3 The total time
spent on these activities per day makes the picture in India even more
clear women on average spent 16.9 and 2.6 percent of their day on
unpaid domestic services and unpaid caregiving services for household
members respectively, while men spent 1.7 and 0.8 percent.4
9. It is curious to note that this is not just a phenomenon unique
to India, but is prevalent all over the world. A 2009 Report by a
Commission set up by the French Government, analyzing data from six
countries, viz. Germany, Italy, United Kingdom, France, Finland and the
United States of America, highlighted similar findings:
“117. Gender differences in time use are significant. In each of
the countries under consideration, men spend more time in
paid work than women and the converse is true for unpaid
work. Men also spend more time on leisure than women. The
implication is that women provide household services
but other members of the household benefit…”5
(emphasis supplied)
10. The sheer amount of time and effort that is dedicated to
household work by individuals, who are more likely to be women than
men, is not surprising when one considers the plethora of activities a
housemaker undertakes. A housemaker often prepares food for the
entire family, manages the procurement of groceries and other
ITA 35/Agr/2021 11
household shopping needs, cleans and manages the house and its
surroundings, undertakes decoration, repairs and maintenance work,
looks after the needs of the children and any aged member of the
household, manages budgets and so much more. In rural households,
they often also assist in the sowing, harvesting and transplanting
activities in the field, apart from tending cattle [See Arun Kumar
Agrawal (supra); National Insurance Co. Ltd. v. Minor Deepika
rep. by her guardian and next friend, Ranganathan, 2009 SCC
OnLine Mad 828]. However, despite all the above, the conception that
housemakers do not “work” or that they do not add economic value to
the household is a problematic idea that has persisted for many years
and must be overcome.
11. The concurring opinion in the Arun Kumar Agrawal
judgment (supra), has highlighted this bias:
“44. This bias is shockingly prevalent in the work of
census. In the Census of 2001 it appears that those who are
doing household duties like cooking, cleaning of utensils,
looking after children, fetching water, collecting firewood have
been categorised as nonworkers and equated with beggars,
prostitutes and prisoners who, according to the census, are not
engaged in economically productive work. As a result of such
categorisation about 36 crores (367 million) women in India
have been classified in the Census of India, 2001 as non-
workers and placed in the category of beggars, prostitutes and
prisoners. This entire exercise of census operations is done
under an Act of Parliament.”
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12. In fact, this unfortunate silence when it comes to the value of
housework has been a problem which was identified as far back as in
1920, when the economist Pigou noted the oddity and contradictions
when it came to the calculation of the contribution of women in the
national income, by stating that:
1. ” ¼the services rendered by women enter into
the dividend when they are rendered in exchange for wages,
whether in the factory or in the home, but do not enter into it
when they are rendered by mothers and wives gratuitously to
their own families. Thus, if a man marries his housekeeper or
his cook, the national dividend is diminished”. 6
2. This issue was further focused on by those in the field of
feminism economics in the 1970s and 1980s, who criticized the
traditional labour statistics which did not consider unpaid domestic
work and therefore undervalued women’s role in the economy.7
13. On considering the growing awareness around this issue, the
United Nations Committee on the Elimination of Discrimination against
Women adopted General Recommendation No. 17 on the “Measurement
and quantification of the unremunerated domestic activities of women
and their recognition in the gross national product” in 1991. The General
Recommendation affirmed that “the measurement and quantification of
the unremunerated domestic activities of women, which contribute to
development in each country, will help to reveal the de facto economic
role of women”.
ITA 35/Agr/2021 13
14. It is worth noting that the above General Recommendation is
passed in furtherance of Article 11 of the Convention on the Elimination
of All Forms of Discrimination against Women which relates to ending
discrimination against women in the field of employment, a Convention
that India has ratified.
15. The issue of fixing notional income for a homemaker, therefore,
serves extremely important functions. It is a recognition of the
multitude of women who are engaged in this activity, whether by choice
or as a result of social/cultural norms. It signals to society at large that
the law and the Courts of the land believe in the value of the labour,
services and sacrifices of homemakers. It is an acceptance of the idea
that these activities contribute in a very real way to the economic
condition of the family, and the economy of the nation, regardless of
the fact that it may have been traditionally excluded from economic
analyses. It is a reflection of changing attitudes and mindsets and of
our international law obligations. And, most importantly, it is a step
towards
16. It is worth noting that the above General Recommendation is
passed in furtherance of Article 11 of the Convention on the Elimination
of All Forms of Discrimination against Women which relates to ending
discrimination against women in the field of employment, a Convention
that India has ratified.
17. The issue of fixing notional income for a homemaker,
therefore, serves extremely important functions. It is a recognition of
the multitude of women who are engaged in this activity, whether by
choice or as a result of social/cultural norms. It signals to society at
ITA 35/Agr/2021 14
large that the law and the Courts of the land believe in the value of
the labour, services and sacrifices of homemakers. It is an acceptance
of the idea that these activities contribute in a very real way to the
economic condition of the family, and the economy of the nation,
regardless of the fact that it may have been traditionally excluded
from economic analyses. It is a reflection of changing attitudes and
mindsets and of our international law obligations. And, most
importantly, it is a step towards the constitutional vision of social
equality and ensuring dignity of life to all individuals.
18. Returning to the question of how such notional income of a
homemaker is to be calculated, there can be no fixed approach. It is
to be understood that in such cases the attempt by the Court is to fix
an approximate economic value for all the work that a homemaker
does, impossible though that task may be. Courts must keep in mind
the idea of awarding just compensation in such cases, looking to the
facts and circumstances [See R.K. Malik v. Kiran Pal, (2009) 14 SCC
1].”
20. Further as per a UNDP (United Nations Development Programme)
study, 80% of women in India don’t have bank accounts, as of 2014-
15. Women (across socioeconomic groups) are often accompanied by
male relatives who deal with banking officials to open a new bank
account, make deposits, etc. on behalf of their female relatives.
Documents carrying the name/signature of a father or a husband are
often a requirement. Opening and operating accounts on mobile
wallets requires mobile phones (preferably smartphones equipped
ITA 35/Agr/2021 15
with access to the internet) to begin with, which several women may
not even own. Therefore, in essence, women require the consent of
male relatives to access formal financial channels, whereas cash offers
them a certain amount of independence.
21. Only after Hon’ble PM initiative of Jandhan Yojana , impetus was given
to open the bank account with more focus on rural areas and women.
Prior thereto generally women were not maintaining any Bank account
and were largely keeping the cash in house at odd places, for the
emergency use.
22. Women all over the country , had been accumulating cash that they
had saved for themselves from household budgets , by haggling with
vegetable sellers, tailors, grocers and assorted traders, years of
stashing in whatever little cash gifts they received from relatives
during festival times and years of tucking away the change they found
in the pants that they washed every day, however suddenly they were
left with no option but to deposit the amount in the denomination of Rs
500 and Rs 1000 notes in the banks on account of Demonetisation
scheme 2016 , these notes were no more legal tenders. Lot of concerned
were raised by political and social organisation bring on fore the plight
of women folks, on account of scheme of 2016.
23. Hon’ble PM and thereafter CBDT , considering the above said aspects in
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mind and showing their concern to Women ( house wife etc) had issued
instruction under section 119 to AO, had assured that the individual
assessee and house wife having no business income , would not be
questioned if the bank deposits during the demonetisation were found
to be less than Rs 2, 50, 000/ ( exemption limit of Income tax) . Further
revenue had issued following press release for the benefit of public on
18/11/2016, immediately after the announcement of the Scheme .
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 18th November, 2016.
PRESS RELEASE
Sub: Demonetisation of Old High Denomination Currency & Cash
Deposits in Bank Accounts
It was announced by the Government earlier that small deposits made
in the banks by artisans, workers, housewives, etc. would not be
questioned by the Income Tax Department in view of the fact that
present exemption limit for Income Tax is Rs.2.5 lakh.
Reports are being received of instances where people are using other
ITA 35/Agr/2021 17
persons’ bank accounts to convert their black money into new
denomination notes for which reward is also being given to the account
holders who agree to allow their accounts to be used. This activity has
been reported in case of Jan-Dhan Accounts also.
It is hereby clarified that such tax evasion activities can be made subject
to Income Tax and penalty if it is established that the amount
deposited in the account was not of the account holder but of
somebody else. Also the person who allows his or her account to be
misused for this purpose can be prosecuted for abetment under Income
Tax Act.
However, genuine persons depositing their own household savings in
cash into their bank accounts would not be questioned.
The people are requested not to get lured by black money converters
and be a partner in this crime of converting black money into white
through this method. Unless all citizens of the country help the
Government in curbing black money, this mission of black money will not
succeed. Also the people who are against the black money should give
information of such illegal activities going on to the Income Tax
department so that immediate action can be taken and such illegal
transfer of cash can be stopped and seized.
Black money is a crime against humanity. We urge every conscientious
citizen to help join the Government in eradicating it.
(Meenakshi J. Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
Official Spokesperson, CBDT.
24. The assessee during the assessment proceedings and before
first appellate authority, had raised her plea of issuing the binding
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instructions , however despite that the additions were made on
account of the deposit made in the bank for an amount of Rs. 2, 21,
000/-. In our view the addition made by the lower authority cannot
be sustained on account of the statement given by the Prime Minister,
press statement and the standard operating procedure issued by the
board, as instructions under section 119 to the Assessing officer , as
the instructions issued by the Board are statutory and binding on the
revenue . In the matter of Dinakar Ullal 2010] 323 ITR 452
(Karnataka)[24-02-2010] it was held as under :
“10. A plain reading of the aforestated statutory provision, it is beyond cavil of doubt
that, the Board is empowered from time to time to issue orders/
directions/instructions to income-tax authorities, as it may deem fit for proper
administration of the Act, and more particularly under clause (b) of sub-section (2)
of section 119, for avoiding genuine hardship in any case, authorising any income-
tax authority to admit an application or claim for any exemption, deduction, refund
or any other relief under the Act after the expiry of the period specified by or under
the Act for making such application or claim and deal with the same on the merits,
in accordance with law. The statute does not indicate vesting a jurisdiction in the
Board to issue instructions in excess of what is stated in section 119(2)(b). It is well-
settled that instructions/circulars/guidelines are binding to the extent they are not
inconsistent with the provisions of the Act.
11. It is elsewhere said that the power of the Board is enlarged where the provisions
of the Act bar the income-tax authorities from entertaining any application for claim
of any exemption, deduction, refund or any other reliefs due under the Act for the
reason that the time limit specified for the making of such application or claim has
expired. Thus, the Board is empowered to authorise the Commissioner of Income-
tax Officer to admit such application or claim even after the time limit and to deal
with it, in accordance with law.
12. In State of M.P. v. G.S. Dall and Flour Mills, AIR 1991 SC 772 ; [1991] 187 ITR
478, the apex court held that executive instructions can supplement a statute or
cover areas to which the statute does not extend but they cannot run contrary to the
statutory provisions or whittle down their effect. In Kerala Financial
Corporation v. CIT [1994] 210 ITR 129 (SC); AIR 1994 SC 2416, following the
opinion of Mukharji J. at paragraph 42 in State Bank of Travancore v. CIT [1986] 158
ITA 35/Agr/2021 19
ITR 102 (SC); AIR 1986 SC 757, that circulars “cannot detract from the Act”, the
apex court held that a circular of the Board under section 119 cannot override or
detract from the Act inasmuch as, what section 119 has empowered is to issue orders,
instructions or directions for the proper administration of the Act or for such other
purpose specified in sub-section (2) of that section and that such an order, instruction
or direction cannot override the provisions of the Act which would be destructive of
all the known principles of law as the same would really amount to giving powers to
a delegated authority to even amend the provisions of the law enacted by Parliament.
13. Thus viewed, section 119 authorises the Board to issue orders, instructions and
directions to the income-tax authorities “for proper administration of the Act”. A
circular is admittedly executive in character and has to be issued in aid of functioning
of the Act and with the objective that, the provisions of the Act are properly
administered. The Board may, in issuing a circular, clarify a point of ambiguity in any
provision of law. Such clarification is not binding upon the courts. It cannot also run
counter to the legislative provisions and create rights or obligations which are
contrary to the statute. Instructions really supplant the law and not supplement the
law. It is settled law that circulars cannot impose any burden on the taxpayer but
can deviate from the provisions of the Act if it is beneficial to the assessee and has
mitigated or relaxed the rigour of the law.”
25. In view of the law laid down by the High Court and also by the Supreme
Court with respect to binding nature of the instruction issued by the
board Instruction No. 03/2017 Dated 21st of February, 2017, we are of
the opinion that the assessing officer was prohibited from making the
addition in the hands of the housewife if the amount deposited in the
bank was found to be less than 2.5 lakhs. The instructions were issued
by the board , for the benefit of the person mentioned in the instructions,
including the housewife and with a view to mitigate their grievances and
also save them from the rigorous provisions of Income Tax Act.
26. Further we may refer Section 69A of the Act , which provies as under :
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69A. Where in any financial year the assessee is found to be the
owner of any money, bullion, jewellery or other valuable article and
such money, bullion, jewellery or valuable article is not recorded in
the books of account, if any, maintained by him for any source of
income64, and the assessee offers no explanation about the nature
and source of acquisition of the money, bullion, jewellery or other
valuable article, or the explanation offered by him is not, in the
opinion of the 61a[Assessing] Officer, satisfactory, the money and
the value of the bullion, jewellery or other valuable article may be
deemed to be the income of the assessee for such financial year.]
27. From the reading of the above said provision makes it abundantly clear
that the requirement of the section is that money or other asset must be
“found “and the assessee is found to be owner of article specified in the
section. Further this provision provides that if the assessee offers no
explanation about the nature and source of acquisition of money etc or
the explanation offered by the assessee, in the opinion of the AO is not
satisfactory then the assessing officer “may” deem such money etc as
income of the assessee for such financial year.
28. In the present case the assessee had given the explanation to the AO
during the assessment proceedings and had submitted that the amount
deposited in the bank, were her money saved by her in last many year’s
and were kept by her , for herself and for the family in case of emergency
need. However, this explanation was rejected by the AO on the pretext
the assessee was not having income from any business. However
assessing officer has not brought on record any document, evidence etc
ITA 35/Agr/2021 21
to show that the assessee was having any income from any other source
other than saving from various activities mentioned elsewhere. Further
no evidence had been brought on record , AO, in terms of press
statement dated 18/11/2016 and SOP to established that the amount
deposited in the account was not of the account holder/ assessee but of
somebody else. In the light of the above when the AO had brought on
record the evidence of proving that the money belongs to other person
and not of the assessee, the amount deposited shall not added as
income of the assessee.
29. In our opinion assessee had duly explained the source of deposit i.e
previous years saving and we have no hesitation to accept the same ,
as it would been presumed that this small amount of Rs 2,21, 000/
would have been accumulated or saved by her from various activities
undertaken by her for and on behalf of family in last many years .
Further as mentioned herein above, in the decision of Kirti ( supra),
women per say cannot be said to be not having income from any
activities , as they are presumed to always been doing economic
activities in the family for many years, hence in our view the assessee
had duly explained the source of her investment. Therefore no additions
can be made by lower authority. Further even if we ignore the
explanation, for the sake of argument, then also it is for the assessing
officer to bring on record some cogent evidence to prove that the amount
deposited in the bank was undisclosed income arising from the business
or from any other activities. No evidence has been brought on record by
ITA 35/Agr/2021 22
the lower authorities. Hon’ble Supreme Court in the matter of Smt. P.K.
Noorjahan*[1999] 103 Taxman 382 (SC) it was held as
“3. Shri Ranbir Chandra, the learned counsel appearing for the
revenue, has urged that the Tribunal as well as the High Court were
in error in their interpretation of section 69. The submission is that
once the explanation offered by the assessee for the sources of the
investments found to be non-acceptable the only course open to the
ITO was to treat the value of the investments to be the income of the
assessee. The submission is that the word ‘may’ in section 69 should
be read as ‘shall’. We are unable to agree. As pointed out by the
Tribunal, in the corresponding clause in the Bill which was introduced
in the Parliament, the word ‘shall’ had been used but during the
course of consideration of the Bill and on the recommendation of the
Select Committee, the said word was substituted by the word ‘may’.
This clearly indicates that the intention of the Parliament in enacting
section 69 was to confer a discretion on the ITO in the matter of
treating the source of investment which has not been satisfactorily
explained by the assessee as the income of the assessee and the ITO
is not obliged to treat such source of investment as income in every
case where the explanation offered by the assessee is found to be not
satisfactory. The question whether the source of the investment
should be treated as income or not under section 69 has to be
considered in the light of the facts of each case. In other words, a
discretion has been conferred on the ITO under section 69 to treat
the source of investment as the income of the assessee if the
explanation offered by the assessee is not found satisfactory and the
ITA 35/Agr/2021 23
said discretion has to be exercised keeping in view the facts and
circumstances of the particular case.
4. In the instant case, the Tribunal has held that the discretion had
not been properly exercised by the ITO and the AAC in taking into
account the circumstances in which the assessee was placed and the
Tribunal has found that the sources of investments could not be
treated as income of the assessee. The High Court has agreed with
the said view of the Tribunal. We also do not find any error in the said
finding recorded by the Tribunal. There is, thus, no merit in these
appeals and the same are, accordingly, dismissed. No order as to
costs.”
30. The word ” may” had been used by the statute under section 69A , as
had been used by the statute under section 69 of the Income Tax Act
1961, therefore applying the same analogy as laid down by SC in the
case of Smt. P.K. Noorjahan(supra) , we are of the opinion that the
amount deposited by the assessee during the demonetisation. Cannot
be treated as income of the assessee. Hence the appeal of the assessee
is allowed .
31. We may clarify that this decision may be treated as precedent in respect
to proceedings arising out of the cash deposit made by the housewives
during the demonetisation scheme 2016, only up to the limit of Rs 2.5
lakhs only .
ITA 35/Agr/2021 24
32. Lastly We record our appreciation for contribution made by Sh Manuj
Sharma Adv in adjudication of this appeal .
33. In the result the appeal of the assessee is allowed . Announced in open
court on 18th June 2021.
SD/- SD/-
(Dr. Mitha Lal Meena) (Laliet Kumar)
Accountant Member Judicial member
Copy of order forwarded to:
(1) The appellant (2) The respondent
(3) Commissioner (4) CIT(A)
(5) Departmental Representative (6) Guard File
By order
Sr. Private Secretary
Income Tax Appellate Tribunal
Agra Bench, Agra
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