Man invests Rs 9.6 lakh in Bitcoin, faces Rs 88 lakh tax addition: Why ITAT intervened

A Bitcoin investor from Lucknow challenged an income tax addition of Rs 88.55 lakh after the tax department treated his cryptocurrency purchases as unexplained investment. The Income Tax Appellate Tribunal ruled in his favour after finding that the tax officer had not given him the minimum time required to respond to a notice and had ignored his reply. The case highlights why cryptocurrency investors should maintain proper records of their transactions and the source of funds used to buy digital assets. It also shows why the income tax department must follow the prescribed procedure while reopening an assessment. In its February 13, 2026, order, the Lucknow bench of the Income Tax Appellate Tribunal, or ITAT, quashed the reassessment proceedings against Surya Pratap Singh Chauhan for the assessment year 2018-19.

First reported by The Financial Express. This page is a short excerpt; the full text is theirs.