Court admits appeal on cash deposits vs. payments, directs funds retention pending appeal outcome. The Court allowed the condonation of delay application by Mr. Siddhartha Chatterjee. The appeal was admitted based on substantial questions of law ...
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Court admits appeal on cash deposits vs. payments, directs funds retention pending appeal outcome.
The Court allowed the condonation of delay application by Mr. Siddhartha Chatterjee. The appeal was admitted based on substantial questions of law regarding the treatment of cash deposits as cash payments and the application of Section 40A(3) of the Income Tax Act, 1961. The Court directed the department to keep the attached amount separately pending the appeal's outcome. As no affidavit-in-opposition was filed by the respondent, the allegations were not admitted. All parties were instructed to act on a signed photocopy of the order, with the appellant given four weeks to file the necessary paper books.
Issues involved: Condonation of delay, substantial questions of law related to Income Tax Appellate Tribunal's decision on cash deposits and Section 40A(3) of the Income Tax Act, 1961.
Condonation of Delay: Mr. Siddhartha Chatterjee did not oppose the application for condonation of delay, and the Court, being satisfied with the explanation, allowed the application, thereby condoning the delay.
Substantial Questions of Law: The Court admitted the appeal based on two substantial questions of law. Firstly, whether the Income Tax Appellate Tribunal erred in considering cash deposits into the payee's bank account as cash payment instead of issuing account payee cheques or bank drafts. Secondly, whether the Tribunal erred in upholding the Appellate Order invoking Section 40A(3) of the Income Tax Act, 1961, treating the cash deposit as direct cash payment and failing to consider the purpose of the said section.
Direction to Department: The Court directed the department to keep the attached amount separately, taken from the bank, pending the appeal's result. The stay application was disposed of accordingly.
Affidavit-in-Opposition: Since no affidavit-in-opposition was filed by the respondent, the allegations contained therein were not admitted by them.
Operative Order: All parties were instructed to act on a signed photocopy of the order, and the appellant was given four weeks to file the requisite number of paper books. Liberty to mention was granted for any further issues.
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