RENU AGGARWAL,PUNJAB V. ACIT/DCIT CEN CIR,PTL, PUNJAB

ITA 1306/CHANDI/2025

AI Insights

The case involves two appeals by Smt. Renu Aggarwal against the additions made to her income and the consequent penalties imposed by the lower tax authorities. The primary issue in ITA No.1306/Chandi/2025 was the quantum addition of Rs.11,36,889 to the assessee's income, which was later reduced to Rs.10,94,725 by the CIT(A). The addition was based on unexplained cash deposits and unsubstantiated claims of cash gifts and sale of a car. The Tribunal found the CIT(A)'s rejection of the opening cash-in-hand balance and the claim of car sale unjustified, leading to a further reduction of the addition to Rs.2,00,000. In ITA No.714/Chandi/2025, the penalty imposed was directly linked to the quantum addition, and with the reduction in the addition, the penalty was also deleted.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834091 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 11-10-2025
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987; (2) TMI 61 SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: PARIKSHIT AGGARWAL; HRITHIK SINGLA
• Keywords: Reasonable cause; Gift
• Section: 143(3); 271(1)(c); 153A

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI RAJPAL YADAV, VICE PRESIDENT & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकरअपीलसं. / ITA No.1306/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2013-14) & 2. आयकरअपीलसं. / ITA No.714/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2013-14) Smt. Renu Aggarwal H. No. 23, Shaheed Bhagat Singh Colony Patiala, Punjab- 140401 बनाम/ Vs. ACIT/DCIT (Central Circle) Aaykar Bhawan Patiala - 147001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ACDPA-4341-H (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Parikshit Aggarwal (CA) and Sh. Hrithik Singla (CA) – Ld. ARs ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 28-01-2026 घोषणाकीतारीख /Date of Pronouncement : 02-02-2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. In these two appeals, the assessee challenges confirmation of quantum addition as well as consequential penalty. First, we take up quantum appeal ITA No. 1306/Chandi/2025 which arises out of an order of Ld. Commissioner of Income Tax-5, Ludhiana [CIT(A)] dated 27-01-2022 confirming quantum addition of Rs.11,36,889/- as made by Ld. AO u/s 69A while framing an assessment u/s 143(3) r.w.s. 153A on 26-12-2019. Printed from counselvise.com 2 2. The registry has noted delay of 1290 days in the appeal, the condonation of which has been sought by the assessee on the strength of condonation petition which is accompanied by an affidavit of the assessee. The primary argument is that due to financial distress, the business operations were discontinued and the assessee’s family was rendered financially insolvent and bankrupt. Consequently, proceedings under SARFAESI Act were initiated by the lending institutions. Due to extreme hardship, the assessee was not in a position to pay the professional fees to the counsel and could not engage another counsel to prosecute the appeals. The Ld. Sr. DR has pleaded for dismissal of the appeal. 3. Upon perusal of assessment order, it could be seen that the impugned addition stem from search action by the department on assessee-group on 12-04-2017. Notice u/s 153A was issued to the assessee on 17-01-2018. In response, the assessee filed return of income declaring income of Rs.1,53,590/-. The assessee made cash gifts to various family members and also received similar gifts. However, the same was not accepted by Ld. AO. It also transpired that the assessee deposited cash of Rs.12,68,889/- in her various bank accounts as tabulated on para-5 of the assessment order. To substantiate the sources of the same, the assessee furnished cash flow statement from 28-05-2012 onwards showing opening cash-in- hand for Rs.6,10,164/-. However, the same was not accepted by Ld. AO. The cash flow statement for FY 2011-12 also stood rejected in AY 2012-13. The assessee reflected receipt of Rs.6.50 Lacs from sale of Printed from counselvise.com 3 car for which no documentary evidences were furnished by the assessee. On these facts, Ld. AO made addition of Rs.11,36,889/- after allowing benefit of cash withdrawals for Rs.1.32 Lacs. Upon further appeal, the Ld. CIT(A) reduced the impugned addition to the extent of Rs.10,94,725/- considering revised cash flow statement as furnished by the assessee. The claim of sale of car for Rs.6.50 Lacs was not accepted. Aggrieved, the assessee is in further appeal before us. 4. So far as the delay is concerned, we find merit in condonation petition that the assessee was prevented by sufficient reasonable cause in filing the appeal since the assessee was undergoing financial distress and hardships at the relevant point of time. Therefore, keeping in mind the guiding principles laid down by Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Mst. Katiji&Ors. (1987; (2) TMI 61 SC)on condonation, we condone the delay in the appeal and proceed for adjudication on merits. 5. On merits, we find that Ld. CIT(A) has adjudicated the appeal by considering revised cash flow statement wherein opening cash-in-hand has been taken to be Nil which is quite unjustified. Further, the claim of sale of car has been rejected for want of documentary evidences. The benefit of income accumulation over the years have not been granted to the assessee. Keeping in mind all these factors, we restrict the impugned addition to the extent of Rs.2 Lacs and delete the remaining addition as sustained by Ld. CIT(A). The Ld. AO is directed to re- Printed from counselvise.com 4 compute the income of the assessee. No other ground has been urged in the appeal. The appeal stands partly allowed. 6. In ITA No.714/Chandi/2025, the assessee has challenged confirmation of penalty u/s 271(1)(c) for Rs.3,28,271/-. The same has been levied considering the quantum addition as sustained by Ld. CIT(A). Since we have granted substantial relief in quantum addition and estimated the quantum addition, the penalty thus imposed by lower authorities could not be sustained. The penalty stands deleted. This appeal stand allowed. 7. ITA No.1306/Chandi/2025 stand partly allowed. ITA No.714/Chandi/2025 stand allowed. Order pronounced on 2nd February, 2026. -Sd- -Sd- (RAJPAL YADAV) (MANOJ KUMAR AGGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated:02-02-2026 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "