Incorrect claim made by assessee u/s 80G not a basis for invoking sec. 69A: ITAT

Case Details: Batuk Vithalabhai Donga v. Income-tax Officer - [2023] 147 taxmann.com 480 (Rajkot-Trib.)

Judiciary and Counsel Details

• • Waseem Ahmed, Accountant Member & Siddhartha Nautiyal, Judicial Member
  • Divyesh Sodha, A.R. for the Appellant.
  • B.D. Gupta, Sr. D.R. for the Respondent.

Facts of the Case

Assessee, an individual, claimed deduction under section 80G of the Income-tax Act while furnishing the return of income. During the assessment proceedings, assessee was unable to furnish any proof or detail with respect to such deduction. Accordingly, the Assessing Officer (AO) by invoking section 69A, made additions to the income of assessee and computed tax liability at a higher rate under section 115BBE.

Aggrieved by the order, assessee preferred an appeal to the CIT(A). The CIT(A) affirmed the additions made by AO and the matter then reached the Rajkot Tribunal.

ITAT Held

The Tribunal held that Section 69A is attracted only when assessee is found to be the owner of any money, bullion, jewellery or other valuable article which is not recorded in the books of account and the assessee offers no explanation about the nature and source of acquisition of such money, bullion, jewellery or other valuable articles.

In the present case, AO had no specific finding that assessee was in possession of any unexplained money, bullion, jewellery or other valuable article in his possession, provisions of section 69A cannot be invoked. Therefore, the AO had mistaken in both facts and law by invoking the provisions of section 69A in respect of incorrect claim of deduction under section 80G of the Act.

Thus, AO cannot compute tax liability under section 115BBE of the Act with respect to disallowance for incorrect claim under section 80G of the Act.