Bangalore ITAT Grants Fresh Adjudication Opportunity to Physically Disabled Agriculturist Over ₹14.07 Lakh in Bank Deposits and Fixed Investments

Background and Overview

A significant ruling has emerged from the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, in the matter of Savitramma Vs ITO (ITAT Bangalore), wherein the Tribunal extended relief to a woman assessee suffering from over 75% permanent locomotor disability. The case revolved around additions totalling approximately ₹14.47 lakh made by the Assessing Officer (Section 69A, Section 69) on account of unexplained cash deposits and unsubstantiated investments in time deposits during Assessment Year 2020-21. The ITAT, taking into account the assessee's disability, her agricultural background, and the documents placed before it, decided to restore the matter for fresh examination at the level of the jurisdictional Assessing Officer.

Facts of the Case

The assessee, Savitramma, is an individual engaged in agricultural activities. She did not file her return of income for Assessment Year 2020-21. Acting on inputs received through the Risk Management Strategy formulated by the CBDT, the revenue authorities observed that she had deposited cash in her bank account during the relevant financial year.

Consequently, a notice under Section 148 of the Income Tax Act, 1961 was issued on 28/03/2024. The assessee, however, remained unresponsive — both to the notice under Section 148 and to subsequent statutory notices issued under Section 142(1) of the Act.

In response to a notice issued under Section 133(6) of the Act, Karnataka Gramin Bank submitted the assessee's bank account statement along with an interest certificate covering the period from 01/04/2019 to 31/03/2020. A perusal of the bank statement revealed:

• Cash deposits of ₹4,50,000 in the savings bank account
• Savings bank interest of ₹3,232
• Fixed deposit interest of ₹37,027
• Investments in time deposits aggregating ₹9,57,138

The assessee was issued a show-cause notice asking why the cash deposit of ₹4,50,000 should not be classified as unexplained money under Section 69A of the Act, why total interest income of ₹40,269 should not be taxed under the head "Income from Other Sources", and why the investment in time deposits of ₹9,57,138 should not be treated as unexplained investment under Section 69 of the Act.

In her response to the show-cause notice, the assessee submitted that she maintained only a single savings bank account with Karnataka Gramin Bank and that the cash deposit of ₹4,50,000 represented agricultural income derived from her husband's landholding. She further stated that all major transactions in the account were attributable to agricultural operations. In support of her response, she provided a copy of her marriage certificate, Aadhaar card, and the RTC (Record of Rights, Tenancy and Crops) document pertaining to her husband's land. However, she failed to furnish any documentary explanation regarding the investment of ₹9,57,138 in time deposits, even after being granted an additional opportunity.

Assessment Order and Additions Made

Since complete and satisfactory documentary evidence was not placed before the Assessing Officer, he proceeded to finalise the assessment on a best judgment basis under Section 147 read with Section 144 of the Income Tax Act, 1961, vide order dated 10/03/2025. The following additions were made: