Amounts deposited in the bank account of a Chartered Accountant for payment of clients’ taxes, supported by corresponding tax challans and matching debits, cannot be treated as unexplained money under section 69A in his hands.

33. (2026) 186 taxmann.com 1084 (Chennai Trib)

Bose Saravanan v. DCIT

A.Y.: 2016-17  Date of Order: 11.05.2026

Section: 69A

Amounts deposited in the bank account of a Chartered Accountant for payment of clients’ taxes, supported by corresponding tax challans and matching debits, cannot be treated as unexplained money under section 69A in his hands.

FACTS

The assessee was a Chartered Accountant. He filed his return of income for AY 2016-17 on 14.10.2016 declaring total income of Rs.2,95,197. The A.O received information that the assessee had deposited substantial amount of cash into his bank account. Since the income declared by the assessee in the return of income was not commensurate with the cash deposit, the A.O held that he had a reason to believe that the income of the assessee had escaped assessment and accordingly reopened the assessment by issuing notice under section 148. The assessee submitted before the A.O that the said bank account was opened for the purpose of paying taxes on behalf of the clients and that the entire amount deposited was with respect to the amount received from the clients towards payment of v