Valid disclosure under the Pradhan Mantri Garib Kalyan Yojana defeats unexplained-money treatment and related revisionary orders.

Cash deposits disclosed under the Pradhan Mantri Garib Kalyan Yojana, 2016 were treated as validly declared where the assessee had made the declaration within time, paid the required tax and deposit, and had already advanced tax before the scheme notification. Administrative issues in challan coding or software matching did not defeat substantive compliance. On that basis, the amount could not be assessed as unexplained money under section 69A of the Income-tax Act, 1961, and the consequential rectification and revision orders under sections 154 and 263 were also unsustainable.

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Issues: (i) Whether the cash deposits covered by the declaration under the Pradhan Mantri Garib Kalyan Yojana, 2016 were entitled to be treated as validly declared income with credit for taxes already paid, and (ii) whether the addition made under section 69A of the Income-tax Act, 1961, along with the consequential orders under sections 154 and 263, could be sustained.

Issue (i): Whether the cash deposits covered by the declaration under the Pradhan Mantri Garib Kalyan Yojana, 2016 were entitled to be treated as validly declared income with credit for taxes already paid.

Analysis: The factual record showed that the assessee had disclosed the cash deposits, paid advance tax before the scheme notification, later paid the balance tax and made the requisite deposit under the scheme, and filed the declaration within the prescribed time. The scheme contemplated immunity where a valid declaration was made along with payment of the required tax and deposit. The later administrative difficulty regarding challan coding or software matching did not alter the substantive compliance found on record.

Conclusion: The declaration was treated as valid and the assessee was held entitled to the benefit of the scheme.

Issue (ii): Whether the addition made under section 69A of the Income-tax Act, 1961, along with the consequential orders under sections 154 and 263, could be sustained.

Analysis: Section 69A applies only where unexplained money is found and no satisfactory explanation is offered. Here, the assessee had offered a consistent explanation, the deposits were linked to declared income under the scheme, and the statutory consequence under the scheme was that the declared amount would not be included in total income. Once the addition under section 69A failed on merits, the rectification and revisionary orders based on that addition also could not stand.

Conclusion: The addition under section 69A was deleted and the consequential orders under sections 154 and 263 were held unsustainable.

Final Conclusion: The appeals were allowed in full, with the declared cash deposits treated as covered by the scheme and the tax additions and connected consequential orders set aside.

Ratio Decidendi: Where the assessee has substantively complied with the conditions of a valid disclosure scheme and the declared amount is supported by a satisfactory explanation and required payments, it cannot be assessed as unexplained money under section 69A of the Income-tax Act, 1961.

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