Gujarat High Court
The Panchsheel Mercantile Co-Op Bank ... vs Assistant Commissioner Of Income Tax ... on 16 October, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11753 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
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THE PANCHSHEEL MERCANTILE CO-OP BANK LIMITED
Versus
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1)
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Appearance:
MR MANISH J SHAH(1320) for the Petitioner(s) No. 1
KARAN G SANGHANI, SR. STANDING COUNSEL for the Respondent(s) No.
1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 16/10/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1 Heard learned advocate Mr.Manish J. Shah for
the petitioner and learned Senior Standing Counsel
Mr.Karan Sanghani for the respondent.
2 Rule returnable forthwith. Learned Senior
Standing Counsel Mr.Karan Sanghani, waives service
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of notice of rule for and on behalf of the respondent.
3 Having regard to the controversy involved in this
petition, with the consent of the learned advocates for
the respective parties, the matter is taken up for final
hearing.
4 By way of the present petition under Articles 226
and 227 of the Constitution of India, the petitioner
has prayed for a direction to quash and set aside the
order passed under Sec.148A(d) dated 31.03.2023 of
the Income Tax Act (hereinafter referred to as 'the
Act' for short) as well as notice issued under Sec.148
dated 31.3.2023 under the provisions of the Act.
5 The brief facts leading to filing of the present
writ petition is that the petitioner is a Mercantile Co-
operative Society and inter alia filed its return of
income under Sec.139(1) of the Act on 22.10.2019
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having PAN No. AADAT9507D inter alia declaring
total income of Rs.1,35,85,340/-.
5.1 It is the case of the petitioner that before filing of
the return, the petitioner had surrendered its earlier
PAN being PAN No. AAACT8950B by way of a
communication dated 14.06.2019. It was the case of
the petitioner that the old PAN which was
surrendered was inadvertently allotted by the Income
Tax Department on the status of 'Company' instead of
'Association of Person'. Therefore, the request was
made for new PAN which was allotted and from the
Assessment Year 2014-15, the petitioner was
regularly filing its return of income under the new
PAN.
5.2 It is the case of the petitioner that scrutiny
assessment in the case of the petitioner was
undertaken for the Assessment Year 2014-15 to 2017-
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18 and accordingly notice under Sec.143(2) of the Act
was issued on new PAN. Thereafter, the Assessment
Order under Sec.143(3) came to be passed on new
PAN.
5.3 It is the case of the petitioner that notice under
Sec.142(1) dated 19.12.2017 was received by the
petitioner, directing the petitioner to file income tax
return for the Assessment Year 2017-18 on the old
PAN i.e. AACT8950B. In response to the said notice,
the petitioner vide communication dated 18.01.2018
informed the respondent qua the allotment of new
PAN i.e. AADAT9507D to the petitioner being a Co-
operative Bank.
5.4 Subsequently, the petitioner addressed another
communication dated 17.06.2019 informing the
respondent that the return of income was filed under
the new PAN, and therefore, the notice under
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provision of Sec.142(1) of the Act was not applicable
qua the old PAN.
5.5 In wake of such submissions, the Assessing
Officer had not passed any Assessment Order under
Sec.143(3) on old PAN.
5.6 It is the case of the petitioner that almost after a
period of three years from the end of the Assessment
Year, the petitioner received notice under
Sec.148A(a) on 04.03.2023 for the Assessment Year
2018-19 on old PAN which was already surrendered
by the petitioner. The respondent had informed that
certain information had been flagged as per the RMS
strategy formulated by CBDT on the insight portal.
5.7 In response to the notice, the petitioner, vide
communication dated 10.03.2023, informed the
respondent about the issuance of new PAN and the
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surrendering of the old PAN. However, without
considering the request made by the petitioner, the
respondent issued notice under Sec.148A(b) on
21.03.2023. The petitioner submitted its response
vide communication dated 10.03.2023 informing the
respondent about surrendering of the old PAN and
issuance of new PAN. However, the respondent
passed the impugned order under Sec.148A(d) on
31.03.2023 as well as notice under Sec.148
suggesting that income to the tune of Rs.5,49,15,258/-
had escaped assessment.
6 It has been submitted by learned advocate
Mr.Manish Shah for the petitioner that order passed
under Sec.148A(d) by the respondent is based on
incorrect facts since the petitioner, on allotment of
new PAN No. i.e. AADAT9507D, had made all the
compliances under the Act on the newly allotted PAN
and had never used the old PAN being PAN No.
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AAACT8950B.
6.1 Learned advocate Mr.Manish Shah for the
petitioner submitted that the allegation of the
respondent to the effect that the petitioner has not
cancelled the old PAN is factually incorrect as the
petitioner, vide communication dated 14.06.2019 and
17.06.2020 had specifically surrendered the old PAN.
He submitted that, in the aforesaid order, it was
wrongly observed that the petitioner continued to use
old PAN and had not cancelled the same.
6.2 Learned advocate Mr.Shah for the petitioner,
with regard to the observations made by the
respondent in its order passed under Sec.148A(d)
that, the information has cropped up under old PAN:
AAACT8950B on account of quoting of old PAN by the
petitioner, submitted that the said observation made
by the respondent is also actually incorrect in view of
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the fact that information as mentioned in the notice
under Sec.148A(a) and 148A(b) as well as in the order
passed under Sec.148A(d) is the information traced
from the Statement of Financial Transactions (SFT) as
provided by banks, which in the impugned case are
Kotak Mahindra Bank Ltd., and HDFC Bank Ltd., and
Yes Bank Ltd., with whom the petitioner bank had
transacted. Thus, in the submission of learned
advocate Mr.Shah, it is not the petitioner bank who
had incorrectly quoted old PAN but it is the above
stated banks who had, by mistake, reported the
transactions made with the petitioner bank on old
PAN: AAACT8950B.
6.3 Learned advocate Mr.Shah for the petitioner
submitted that, in view of the aforesaid facts, the
allegation with regard to quoting of old PAN of the
petitioner is incorrect, and accordingly, submitted
that the allegations of respondent with regard to non-
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cancellation of PAN and usage as well as quoting of
old PAN are baseless and contrary to the material
available on record, and therefore, the said
allegations be rejected.
6.4 Learned advocate Mr.Shah, further submitted
that the order passed under Sec.148A(d) and notice
issued under Sec.148, for the Assessment Year 2019-
20 are based on incorrect facts / allegations and
hence are illegal and bad in law and thus liable to be
quashed and set aside.
7 Per Contra, learned Senior Standing Counsel
Mr.Karan Sanghani for the respondent- Revenue,
admitted to the fact that the notice was issued on the
old PAN which was surrendered. However, it was
submitted that the re-assessment was based on
specific information related to cash deposits,
withdrawals and foreign remittances, amounting to
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Rs.5,49,15,258/-, which the petitioner would not have
indulged into being a Co-operative Bank with the
banking license. These transactions does grant
immunity from scrutiny, especially, if the transactions
suggested potential income escapement. However,
learned Senior Standing Counsel Mr.Karan Sanghani
could not dispute the fact that the notice was issued
on old PAN.
8 Having heard the learned advocates appearing
for the respective parties and having perused the
material on record, it is not in dispute that the formal
notice issued under the old surrendered PAN being
AAACT8950B, which was communicated to the office
of the respondent way back on 14.06.2019. The
return relating to the relevant Assessment Year 2019-
20 was filed by the petitioner under the new PAN
being AADAT9507D which was allotted to the
petitioner. Inspite of this fact, the respondent had
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passed the order under Sec.148A(d) as well as notice
under Sec.148 of the Act under the old PAN.
9 It is a settled position of law that the respondent
authority cannot issue notices on the old PAN which
is already surrendered. In view of such fact, the
impugned order dated 31.03.2023 under
Sec.148A(d) of the Act as well as notice dated
31.03.2023 under Sec.148 of the Act are hereby
quashed and set aside. However, the respondent
would be at liberty to initiate fresh proceedings by
issuing notice on the new PAN in accordance with the
law.
In view of such observations, the petition is
allowed with the aforementioned directions. Rule is
made absolute to the aforesaid extent. No order as to
costs.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
BIMAL
