Rs 5.2cr cash in bank yet wins case in ITAT Delhi

Mr Kumar, a grain trader, deposited Rs 5.2 crore in his bank account and filed an Income Tax Return (ITR) claiming income of only Rs 7.65 lakh. This triggered red flags in the Income Tax Department. The first flag was the large cash deposit reported by Allahabad Bank through its specified financial transaction (SFT) return. The second flag was the discrepancy between the bank account not mentioned in the ITR, but declared in Form 3CD accompanying the ITR.

The Income Tax Assessing Officer (AO) issued notices demanding clarification on the cash deposit and the ITR. After Kumar's responses didn't satisfy the tax department, an assessment order was issued classifying the money as unexplained under Section 69. Kumar's accountants argued that since the bank account was declared in the balance sheet, the AO's conclusion was based on incorrect facts.

On September 15, 2026, Mr Kumar won his case in the ITAT Delhi. The ITAT Delhi dismissed the tax notice on the ground that the reasons for reopening the case were based on incorrect facts, which invalidated the jurisdiction assumed by the AO.