KRISHNAMOORTHY PUSHPALATHA,CHENNAI V. ITO, NCW-22(6), TAMBARAM

ITA 15/CHNY/2025

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The case involves Krishnamoorthy Pushpalatha, a serving police officer in Tamil Nadu, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Center, Delhi. The appeal was related to the assessment year 2014-15, where an addition of Rs. 50 lakhs was made to her income by the Income Tax Officer under section 69A of the Income Tax Act, 1961. The addition was based on the non-filing of her income tax return and the unexplained cash deposit of Rs. 50 lakhs in her bank account, which was reported to the tax authorities. The assessee claimed that the amount was a gift from her father, who had sold agricultural land, but failed to provide necessary documentation to support her claim.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633431 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Other Referred Cases: MacDowell and Company Limited vs The Commercial Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: DIVYA ABHISHEK; VIRTUAL
• Keywords: Gift; Avoidance of tax
• Section: 69

Judgement Text

"आयकर अपीलीय अधिकरण, ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI श्री यस यस विश्वनेत्र रवि, न्यावयक सदस्य एवं श्री अविताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.15/Chny/2025 Assessment Years: 2014-15 Krishnamoorthy.Pushpalatha, No.8, Rajaji Street, Chelliamman Nagar, Kilabakkam Urapakkam, Chennai-600 048 [PAN: CXHPP0644P] The Income Tax Officer, Non-Corporate Ward-22(6), Chennai (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Ms.Divya Abhishek, FCA(Virtual) प्रत्यर्थी की ओर से /Revenue by : Ms.Anitha, Addl.CIT सुनवाई की तारीख/Date of Hearing : 05.06.2025 घोषणा की तारीख /Date of Pronouncement : 11.06.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 2024-25 / 1067431246(1) dated 08.08.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment year 2014-15. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. ITA No. 15/Chny/2024 Page - 2 - of 7 2.0 The only issues raised by the appellant in this appeal is regarding an addition of Rs.50 lakhs made by the Ld.AO u/s 69 of the Act. At the outset, we deem it necessary to examine the brief factual matrix of the case. The appellant is a serving police officer with Government of Tamil Nadu. The appellant had not filed her return of income for the AY-2014-15. Information was received by the Revenue about the non-filing of return and also indicating that the appellant assessee had deposited cash of Rs.50 lakhs in her bank account with Canara Bank at Vaiyavoor Branch. The appellant was also not filing any return qua her salary received from the Police Department of Tamil Nadu. Proceedings u/s 148A were initiated against the assessee. In response to the Ld.AO’s show cause the assessee had submitted that her father had sold some agricultural land in July-2013 and that father had given the impugned cash amount of Rs.50 lakhs to her as gift which was deposited by the assessee in her bank account. It was also submitted that the father of the appellant assessee had since demised. The assessee however despite opportunities provided by the Ld.AO, could not provide any copy of bank accounts of her father to substantiate the theory. The Ld.AO therefore proceeded to make the impugned addition u/s 69A. Before the Ld.CIT(A), the same hypothesis was reiterated. However, despite opportunities given, copy of bank accounts of her father were again not provided. ITA No. 15/Chny/2024 Page - 3 - of 7 3.0 The Ld. Counsel for the assessee pleaded that because of the time lag and father’s unfortunate demise, the assessee is having difficulties in procuring bank account of her father. The Ld. Counsel again reiterated the arguments taken before the lower authorities. 4.0 Per Contra, the Ld. DR would like to make us believe on the correctness of the order of lower authorities. It was argued that even during the present proceedings, the appellant assessee merely submits inability to provide the impugned bank statement of her father and that the same is merely a ploy to avoid detection. It was argued that the order of lower authorities therefore be confirmed. 5.0 We have heard rival submissions in the light of material available on records. The only issue under consideration is the addition of cash deposit of Rs. 50 lakhs in assessee’s bank account. It is an undisputed fact on records that the assessee had not filed her regular return of income and that the impugned deposit could be considered for taxation only through proceedings u/s 148. The assessee claims that the amount was received by her from her father who had sold some agricultural land. The bank statement of assessee’s father thus ITA No. 15/Chny/2024 Page - 4 - of 7 becomes the most clinching evidence to resolve the issue. The assessee has however in spite of having been given repeated opportunities by the lower authorities has failed to file the same. We do not find any strength in assessee’s argument of being pre-occupied with her official assignments so much so that, the statements could not be procured from the bank. The assessee had not filed her return of income in the first place and has also thus far failed in providing the impugned bank statements. The assessee has therefore not approached lower authorities with clean hands. It is further seen that it is trite law that while applying income tax statute, benevolence is to be always kept, as far as possible, the statute is to be interpreted benevolently so that a tax payer is not unnecessarily aggrieved. It would however be seen the act of benevolence would be available only to an honest tax payer who approaches the court with clean hands. The benevolence would not be available to a tax payer whose affairs are clouded in mystery and / or are not clear, correct and complete. On this matter we place reliance upon the decision of Hon’ble Supreme Court in the case of MacDowell and Company Limited vs The Commercial Tax Officer 1986 AIR 649 wherein the Hon’ble Apex held that it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. ITA No. 15/Chny/2024 Page - 5 - of 7 We deem it necessary to extract the views of Hon’ble Apex Court on the matter “……..We think that time has come for us to depart from the Westminister principle as emphatically as the British Courts have done and to dissociate ourselves from the observations of Shah, J. and similar observations made elsewhere. The evil consequences of tax avoidance are manifold. First there is substantial loss of much needed public revenue, particularly in a welfare state like ours. Next there is the serious disturbance caused to the economy of the country by the piling up of mountains of blackmoney, directly causing inflation. Then there is “the large hidden loss” to the community (as pointed out by Master Sheatcraft in 18 Modern Law Review 209) by some of the best brains in the country being involved in the perpetual war waged between the tax-avoider and his expert team of advisers, lawyers and accountants on one side and the tax-gatherer and his perhaps not so skilful, advisers on the other side. Then again there is the ‘sense of injustice and inequality which tax avoidance arouses in the breasts of those who are unwilling or unable to profit by it’. Last but not the least is the ethics (to be precise, the lack of it) of transferring the burden of tax liability to the shoulders of the guideless good citizens from those of the ‘artful dodgers’. It may, indeed, be difficult for lesser mortals to attain the state of mind of Mr. Justice Holmes, who said, “Taxes are what we pay for civilized society. I like to pay taxes. With them I buy civilization.” But, surely, it is high time for tho judiciary in India too to part its ways from the principle of Westminister and the alluring logic of tax avoidance. We now live In a welfare state whose financial needs, if backed by the law, have to be respected and met. We must recognise that there is behind taxation laws as much moral sanction as behind any other welfare legislation and it is a pretence to say that avoidance of taxation is not unethical and that It stands on no less moral plane than honest payment of taxation. In our view, the proper way to construe a taking statute, while considering a device to avoid tax, is not to ask whether the provisions should be construed literally, or liberally, nor whether the transaction is not unreal and not prohibited by the statute, but whether the transaction is a device to avoid tax, and whether the transaction is such that the judicial process may accord its approval to it. A hint of this approach is to be found in the judgment of Desai, J. in Wood Polymer Ltd. v. Bengal Hotels Limited(1) where the learned judge refused to accord sanction to the amalgamation of companies as it would lead to avoidance of tax. ITA No. 15/Chny/2024 Page - 6 - of 7 It is neither fair nor desirable to expect the legislature to intervene and take care of every device and scheme to avoid taxation. It is upto the Court to take stock to determine the nature of the new and sophisticated legal devices to avoid tax and consider whether the situation created by the devices could be related to the existing legislation with the aid of ‘emerging’ techniques of interpretation as was done in Ramsay, Burma Oil and Dawson, to expose the devices for what they really are and to refuse to give judicial benediction….”. 6.0 The primary responsibility is upon the assessee to establish truthfulness and genuineness of her transaction. The act of non-filing of her return of income and thereafter to avoid production of fathers bank statement alludes towards an attempt to avoid detection of true facts as well as incidence of taxation . We are therefore of the considered view that no case is made out in assessee’s favour to justify non-production of impugned bank statement of her father even after a gap of such a long time. Accordingly, we confirm the action of the Ld.AO in making the impugned addition and of Ld.CIT(A) in confirming it. All the grounds of appeal raised by the assessee on this grounds are therefore dismissed. ITA No. 15/Chny/2024 Page - 7 - of 7 7.0 In the result, the appeal of the assessee is dismissed. Order pronounced on 11th , June-2025 at Chennai. Sd/- (यस यस धवश्वनेत्र रधव) (SS VISWANETHRA RAVI) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 11th , June-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "