ITAT Deletes Section 69A Addition for Lack of Charging Provision

Case Details: Pradeep Tyagi HUF vs. Income-tax Officer - [2026] 186 taxmann.com 388 (Delhi-Trib.)

Judiciary and Counsel Details

• Ms Madhumita Roy, Judicial Member & Khettra Mohan Roy, Accountant Member
• Dr Rakesh Gupta & Somil Agarwal, Advs. for the Appellant.
• Ms Harpreet Kaur Hansra, Sr. DR for the Respondent.

Facts of the Case

The assessee challenged an addition of Rs. 1 crore for the AY 2017-18 arising from a single cash deposit in its Kotak Mahindra Bank account. The Assessing Officer (AO) held that the assessee did not carry out any business activities during part of the year. The precise source of the single-day cash deposit of Rs. 1 crore in the bank remained unexplained.

He added Rs. 1 crore to the taxable income over and above the returned income of about Rs. 6.60 lakhs (treated by the AO as income from other sources). AO applied section 115BBE to the addition. On appeal, the CIT(A)/NFAC confirmed the addition, essentially reiterating the AO’s order. The aggrieved assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that, before the application of section 115BBE, the income must fall within the parameters specified in the sections. However, in the instant case, the AO had failed to pinpoint any such charging section under which the proposed addition was made. Section 155BBE falls within Chapter XII of the Income-tax Act, 1961, and is concerned with the determination of tax in special cases. The AO had fallen into a palpable error by jumping to section 115BBE without first fixing the addition under any of the charging provisions.

The legal infirmity in the assessment order was pointed out to the Sr. DR, but she could not elucidate the proper charging provision for bringing to income the sum of Rs. 1 crore. The order of the CIT(A) mainly reiterated the order of the AO, and he glossed over the fact that the absence of a charging provision is fatal to the finality of the assessment order. Accordingly, the entire addition of Rs. 1 crore was directed to be deleted.