The Mayyanad Regional ... vs Income Tax Officer
2023 Latest Caselaw 22 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                               PRESENT
                THE HONOURABLE MR. JUSTICE GOPINATH P.
        FRIDAY, THE 6TH DAY OF JANUARY 2023 / 16TH POUSHA, 1944
                       WP(C) NO. 24358 OF 2021
PETITIONER:

            THE MAYYANAD REGIONAL
            CO-OPERATIVE BANK LTD.NO.94,
            MAYYANAD, KOLLAM-691303, REPRESENTED BY
            K.B.VENUGOPALAN ACHARI, CHIEF EXECUTIVE.

            BY ADVS.
                    HARISANKAR V. MENON
                    MEERA V.MENON



RESPONDENTS:

    1       INCOME TAX OFFICER
            WARD 2, KOLLAM-691 301.

    2       THE ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF
            INCOME TAX/INCOME TAX OFFICER,
            NATIONAL FACELESS ASSESSMENT CENTRE,
            DELHI-100 001.

    3       THE INCOME TAX OFFICER,
            WARD 4, KOLLAM-691 301.

            BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT




     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
06.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 W.P.(C)No.24358/2021                    2



                               JUDGMENT

Petitioner is a Co-operative Society. It was originally

allowed a Permanent Account Number by the Income Tax

Department showing its status as that of a firm. The

petitioner had also submitted the said PAN number in respect

of its banking transactions. On realising the fact that the PAN

number should have been allotted showing the status of the

petitioner as that of an association of persons, the petitioner

applied for and obtained a new PAN number and started

filing returns under the new PAN number from the

assessment year 2013-2014 onwards.

2. On the basis of the information received by the

Income Tax Department that there were certain unexplained

cash deposits in the Bank accounts of the petitioner for the

assessment year 2017-2018, proceedings were initiated

against the petitioner and the assessment was completed

against the petitioner by the National Faceless Assessment

Centre with reference to the PAN number given by the

petitioner to the Bank. This PAN number was the old PAN

number showing the status of the petitioner as a firm.

3. The statement filed on behalf of the respondents

would show that the assessment was completed with

reference to the old PAN number only on account of the

mistake committed by the petitioner by not having the old

PAN number cancelled and by not providing the new PAN

number in respect of its banking transactions. The learned

counsel appearing for the respondent department fairly

submits that since the assessment of the petitioner for the

assessment year 2017-2018 had already been completed by

another assessment order under the new PAN number, a

fresh assessment order for the same year under the old PAN

number in respect of the petitioner may not be sustainable.

He however submits with reference to paragraphs 5 and 6

of the statement, that the department may be permitted to

initiate fresh proceedings for the assessment year 2017-2018,

by issuing notice under Section 148 of the Income Tax Act

under the new PAN number, treating the issues which led to

the impugned order of assessment (Ext.P7) as a ground for

reopening of assessment for the assessment year 2017-2018.

Paragraphs 5 and 6 of the statement filed in this case by the

respondent department reads as follows:

"5. After careful analysis of the circumstances under which two separate assessments of the same assessee under two separate PANs have been made, it is found that the sole reason for such happening is that the assessee had not surrendered or deactivated the first PAN though the assessee has been filing returns in the new PAN from the assessment year 2013-14 onwards. The assessee has also failed to intimate the banks in time about the new PAN which resulted in the uploading of bank transactions continuously in the old PAN. The huge amount of cash deposits made by the assessee during the demonetization period and uploading of the same by banks in the old PAN resulted in the selection of the case for scrutiny for the second time. On verification of the records, it is found that the fault in this regard lies with the assessee only and not with the department.

6. However, two assessments for the same assessee for the same assessment year under different PANs for different reasons do not appear to be correct. Therefore, the impugned Ext.P7 assessment may have to be set aside. However, this may be done with a direction to consider the inclusion of the cash deposits found uploaded in the old PAN as income, if called for, by reopening the assessment already completed by Ext.P4 order. This prayer is made in order to protect the interests of the Revenue as the normal time limit for reopening the assessment for 2017-18 is already over. It may be kindly noted that the non-consideration of the

cash deposits found uploaded in the old PAN for inclusion as income while completing the original assessment was on account of the fact that the details of these cash deposits were uploaded in the old PAN only and the reason for this is the failure of the petitioner to deactivate the old PAN. If the Hon'ble High Court is pleased to give a direction as prayed for as above, the time limit for reopening the assessment get obliterated in terms of Section 150(1) of the Income Tax Act".

4. The learned counsel appearing for the petitioner

would submit that the petitioner could not get the old PAN

number cancelled only on account of the fact that the

petitioner could not retrieve its password to enable access the

portal. It is submitted that though Exts.P3 to P3(b) requests

were filed in this regard there were no response from the

Income Tax Department.

5. The contention of the petitioner is that the

petitioner could not have the old PAN number cancelled etc.

since the petitioner did not have access to the password and

hence the portal, is only to be rejected as this is a case where

the petitioner had quoted and had given the details of its old

PAN number while carrying out Banking transactions with

Banks where it had maintained accounts. This was done even

in the assessment year 2017-2018, even after the petitioner

was clearly aware that it had been issued with a new PAN

number from the assessment year 2013-2014 onwards and

that the assessments of the petitioner were being completed

under that PAN number. Therefore, for the mistake of the

petitioner, the department cannot be found fault with.

6. Therefore, I am of the view that Ext.P7 assessment

order can be set aside with a right reserved to the respondent

department to initiate reassessment proceedings in respect of

the assessment year 2017-2018, by issuing a notice under

Section 148 of the Income Tax Act. In the peculiar facts and

circumstances of this case I hold that it will not be open to the

petitioner to contend that the notices issued under Section

148 of the Income Tax Act for the assessment year 2017-2018

is barred by limitation. I am constrained to direct so, only on

account of the fact that according to the department, the

unexplained cash transactions relate to the period of

demonetisation and also on account of the fact that it was the

petitioner's own mistake in providing its old PAN number that

led to initiation of proceedings and its completion by Ext.P7

order of assessment under the old PAN number. Ext.P7 order

of assessment is quashed permitting the Income Tax

Department to initiate fresh proceedings by issuance of notice

under Section 148 of the Income Tax Act for the assessment

year 2017-2018. The petitioner is precluded from contending

that the proceedings are barred by limitation. The

proceedings for reassessment shall be initiated as above

under the new PAN number of the petitioner.

The writ petition is disposed of as above.

Sd/-

GOPINATH P.

JUDGE ats

APPENDIX OF WP(C) 24358/2021

PETITIONER EXHIBITS

Exhibit P1 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT

Exhibit P2 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT

Exhibit P3 COPY OF E-MAIL LETTER SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT

Exhibit P3(A) COPY OF E-MAIL LETTER SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT

Exhibit P3(B) COPY OF E-MAIL SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT

Exhibit P4 COPY OF ASSESSMENT ORDER ISSUEDBY THE 3RD RESPONDENT

Exhibit P5 COPY OF DRAFT ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT

Exhibit P6 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.

Exhibit P6(A) COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT

Exhibit P7 COPY OF ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2017-18

Exhibit P8 COPY OF JUDGMENT IN W.P.(C)NO.35333/17 OF THIS HON'BLE COURT

Exhibit P8(A) COPY OF JUDGMENT IN W.P.(C)NO.17323/2019 OF THIS HON'BLE COURT.