Sanjib Bardhan

23/08/2026

Can withdrawing cash from your own bank account make it “unexplained income”?

Tax Department said yes.
ITAT Chennai said no.

₹3.67 crore came into the account.
₹3.44 crore was withdrawn in cash.

AO taxed the withdrawals under Section 115BBE at 60%.

Taxpayer’s defence:
He was only a sub-agent. The money belonged to clients. His real income was just the commission (already in Form 26AS with TDS).

ITAT deleted the entire addition.

Key takeaway:
Money moving through your account ≠ your income.

Ownership + purpose + records decide it.

ITO v. Jaisingh Shankar
ITA No. 2931/CHNY/2025 | ITAT Chennai | 10 July 2026

19/08/2026

Rs. 3.74 LAKH TAX PENALTY ON Rs. 30 LAKH SALARY — ITAT SAYS “NO!

A salaried taxpayer earned ₹30.22 lakh during AY 2019-20 but did not file his ITR within the prescribed time.

The Income Tax Department later reopened the case and the taxpayer filed his return, declaring the entire ₹30.22 lakh income.

The AO accepted the income without making any addition.

Yet, a penalty of ₹3.74 lakh under Section 270A was imposed for alleged under-reporting of income.

ITAT DELETED THE PENALTY

The Tribunal noted that:

✔ Entire income was ultimately disclosed
✔ TDS was already reflected in Form 26AS
✔ No additional income was found during reassessment
✔ The returned income was accepted without addition
✔ The taxpayer's explanation was found to be bona fide

KEY TAKEAWAY

Non-filing of an ITR does not automatically mean under-reporting of income.

Section 270A deals with under-reporting of income. In this case, the Tribunal found that the taxpayer had not actually understated his income.

However, this does not mean taxpayers can simply ignore their ITR filing obligation.

₹3.74 LAKH PENALTY DELETED.

Case: Pravesh Aggarwal v. CIT(A), NFAC
AY 2019-20 | ITAT Delhi

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