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Facts
The assessee filed a return for AY 2012-13. Subsequently, the AO initiated reassessment proceedings under Section 147 based on information about bank deposits without corresponding income. The AO added the deposits and purchases of bank drafts as unexplained investments. The assessee claimed to have two PANs, one of which was surrendered.
Held
The Tribunal held that the CIT(A) was not justified in quashing the reassessment proceedings solely on the ground of the surrendered PAN, without verifying the surrender and its implications. The Tribunal restored the matter to the AO for de novo adjudication.
Key Issues
Whether reassessment proceedings initiated on a surrendered PAN are void ab initio, and whether the CIT(A) erred in quashing the proceedings without proper verification.
Sections Cited
147, 148, 143(3), 144, 292B, 142(1), 272B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
ORDER PER OM PRAKASH KANT, AM
This appeal by the Revenue is directed against order dated 18.06.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’], raising following grounds:
1. The appellant reserves the right to alter, modify, cancel OR raise any grounds of appeal before the Appellate Authority.
2. Whether on the facts and cir Whether on the facts and circumstances of the case& in cumstances of the case& in law, The Ld CIT(A) was not correct in holding that the law, The Ld CIT(A) was not correct in holding that the law, The Ld CIT(A) was not correct in holding that the assessment made on surrendered PAN AFKPJ7706F assessment made on surrendered PAN AFKPJ7706F assessment made on surrendered PAN AFKPJ7706F was invalid and bad was invalid and bad-in law and is liable to be squashed in law and is liable to be squashed 3. Whether on the facts and circumstances of the case and Whether on the facts and circumstances of the case and Whether on the facts and circumstances of the case and in law, The CIT(A in law, The CIT(A) was not correct in holding that the A.0. ) was not correct in holding that the A.0. was very well aware of the fact that the there are two was very well aware of the fact that the there are two was very well aware of the fact that the there are two PANS of the assessee, in spite of the time gap in passing PANS of the assessee, in spite of the time gap in passing PANS of the assessee, in spite of the time gap in passing the orders and fact that the system allowed the A.0.to the orders and fact that the system allowed the A.0.to the orders and fact that the system allowed the A.0.to issue notice u/s 148 of the Act on surrendere issue notice u/s 148 of the Act on surrendered PAN. d PAN.
Whether on the facts and circumstances of the case and Whether on the facts and circumstances of the case and Whether on the facts and circumstances of the case and in law, The Ld CIT(A)was not correct in not holding that in law, The Ld CIT(A)was not correct in not holding that in law, The Ld CIT(A)was not correct in not holding that the grounds raised
by the assessee are to be deleted The the grounds raised by the assessee are to be deleted The the grounds raised by the assessee are to be deleted The Ld CIT(A) should have adjudicated the grounds raised by Ld CIT(A) should have adjudicated the grounds raised by Ld CIT(A) should have adjudicated the grounds raised by the assessee. the assessee.
5. Whether on Whether on the facts and the circumstances of the case the facts and the circumstances of the case and in law, The Id. CIT(A) was not corTect by not taking and in law, The Id. CIT(A) was not corTect by not taking and in law, The Id. CIT(A) was not corTect by not taking into consideration the provisions of Section 292B of the into consideration the provisions of Section 292B of the into consideration the provisions of Section 292B of the Act as the notice issued and the assessment made were Act as the notice issued and the assessment made were Act as the notice issued and the assessment made were in conformity with OR according to the inte in conformity with OR according to the intent & purpose nt & purpose of the Act. of the Act.
6. The order of the A.O should be restored and that of The order of the A.O should be restored and that of The order of the A.O should be restored and that of CIT(A) be set aside. CIT(A) be set aside.
7. Whether on the facts and circumstances of the case & in Whether on the facts and circumstances of the case & in Whether on the facts and circumstances of the case & in law, The Ld CIT(A) was not correct in holding that the law, The Ld CIT(A) was not correct in holding that the law, The Ld CIT(A) was not correct in holding that the order was passed u/s 143(3) considering all the relevant order was passed u/s 143(3) considering all the order was passed u/s 143(3) considering all the submission made by the then AR without confirming that submission made by the then AR without confirming that submission made by the then AR without confirming that the transaction reported on the surrendered PAN was the transaction reported on the surrendered PAN was the transaction reported on the surrendered PAN was available at the time of assessment u/s 143(3) and was available at the time of assessment u/s 143(3) and was available at the time of assessment u/s 143(3) and was verified verified by the then AO.
2. The factual matrix of the case The factual matrix of the case that the assessee, an ind he assessee, an individual and partner in a firm, was engaged in the business of works and partner in a firm, was engaged in the business of works and partner in a firm, was engaged in the business of works contract. The assessee filed a return of income on 30th July 2013, contract. The assessee filed a return of income on 30th July 2013, contract. The assessee filed a return of income on 30th July 2013, declaring total income of Rs.32,52,980/ declaring total income of Rs.32,52,980/-. This return was . This return was subsequently subjected to scrutiny, and an assessment under subsequently subjected to scrutiny, and an assessment under subsequently subjected to scrutiny, and an assessment under section 143(3) of the Income tion 143(3) of the Income-tax Act, 1961 was completed on 14th tax Act, 1961 was completed on 14th November 2014, determining total income at Rs.36,78,440/-. November 2014, determining total income at Rs.36,78,440/ November 2014, determining total income at Rs.36,78,440/ Thereafter, based on information obtained from the Individual Thereafter, based on information obtained from the Individual Thereafter, based on information obtained from the Individual Transaction Statement (ITS) available in the Income Transaction Statement (ITS) available in the Income- -tax Department database, indicating substantial bank deposits by the assessee se, indicating substantial bank deposits by the assessee se, indicating substantial bank deposits by the assessee without corresponding income, the Assessing Officer formed a belief without corresponding income, the Assessing Officer formed a belief without corresponding income, the Assessing Officer formed a belief that income had escaped assessment. Accordingly, a notice under that income had escaped assessment. Accordingly, a notice under that income had escaped assessment. Accordingly, a notice under section 148 of the Act was issued and duly served upon the section 148 of the Act was issued and duly served upon the section 148 of the Act was issued and duly served upon the assessee. Despite receipt of notices under section 142(1) of the Act Despite receipt of notices under section 142(1) of the Act Despite receipt of notices under section 142(1) of the Act calling for an explanation regarding the sources of these calling for an explanation regarding the sources of these calling for an explanation regarding the sources of these investments, the assessee failed to furnish any such explanation. investments, the assessee failed to furnish any such explanation. investments, the assessee failed to furnish any such explanation. The Assessing Officer observed that the assessee had made term The Assessing Officer observed that the assessee had made term The Assessing Officer observed that the assessee had made term deposits aggregating Rs.3,57,14,000/ aggregating Rs.3,57,14,000/-, the source of which was , the source of which was unexplainable, and accordingly, added this amount to the income of unexplainable, and accordingly, added this amount to the income of unexplainable, and accordingly, added this amount to the income of the assessee. Additionally, the Assessing Officer noted the purchase the assessee. Additionally, the Assessing Officer noted the purchase the assessee. Additionally, the Assessing Officer noted the purchase of bank drafts totaling Rs.69,09,560/ of bank drafts totaling Rs.69,09,560/-, with no explanation , with no explanation provided for the source, leading to the addition of this amount as ded for the source, leading to the addition of this amount as ded for the source, leading to the addition of this amount as unexplained investment. Further, interest of Rs.17,972/- earned on unexplained investment. Further, interest of Rs.17,972/ unexplained investment. Further, interest of Rs.17,972/ savings accounts, which was not declared in the original return, savings accounts, which was not declared in the original return, savings accounts, which was not declared in the original return, was also added to the income. was also added to the income. In total, the Assessing Officer In total, the Assessing Officer made significant additions amounting to Rs.4,26,41,620/ significant additions amounting to Rs.4,26,41,620/- -, as reflected in his order u/s 147 read with section 144, dated 23rd December his order u/s 147 read with section 144, dated 23rd December his order u/s 147 read with section 144, dated 23rd December 2019. Regenerate d response B3. On further appeal before the learned Commissioner of Income On further appeal before the learned Commissioner of Income On further appeal before the learned Commissioner of Income Tax (Appeals), the assessee contended that he had been Tax (Appeals), the assessee contended that he had been Tax (Appeals), the assessee contended that he had been inadvertently allotted two Permanent Account Numbers (PANs), inadvertently allotted two Permanent Account Numbers (PANs), inadvertently allotted two Permanent Account Numbers (PANs), namely AACPJ3994F AACPJ3994F and AFKPJ7706F. It was submitted that the . It was submitted that the latter PAN had been duly surrendered on 06.08.2013 06.08.2013, much prior latter PAN had been to the initiation of reassessment proceedings. It was, therefore, to the initiation of reassessment proceedings. It was, therefore, to the initiation of reassessment proceedings. It was, therefore, urged that the reassessment order dated urged that the reassessment order dated 23.12.2019 23.12.2019, passed under section 147 of the Act on the surrendered PAN, was wholly under section 147 of the Act on the surrendered PAN, was wholly under section 147 of the Act on the surrendered PAN, was wholly without jurisdiction and without jurisdiction and consequently void ab initio.
4. The learned CIT(A), upon consideration of the submissions The learned CIT(A), upon consideration of the submissions The learned CIT(A), upon consideration of the submissions advanced and the material available on record, found merit in the advanced and the material available on record, found merit in the advanced and the material available on record, found merit in the plea of the assessee and quashed the reassessment proceedings on plea of the assessee and quashed the reassessment proceedings on plea of the assessee and quashed the reassessment proceedings on the ground of lack of jurisdiction the ground of lack of jurisdiction. The relevant finding of the Ld. The relevant finding of the Ld. CIT(A) is reproduced as under: CIT(A) is reproduced as under:
“5.3 I have carefully considered the facts and evidences on record.It is seen that I have carefully considered the facts and evidences on record.It is seen that I have carefully considered the facts and evidences on record.It is seen that for the impugned Assessment Year (AY), the appellant filed the Original Return for the impugned Assessment Year (AY), the appellant filed the Original Return for the impugned Assessment Year (AY), the appellant filed the Original Return of Income declaring total of Income declaring total income of Rs. 32,52,980 on 30.07.2013. The appellant income of Rs. 32,52,980 on 30.07.2013. The appellant was allotted two PAN i.e AACPJ3994F and AFKPJ7706F. The appellant had was allotted two PAN i.e AACPJ3994F and AFKPJ7706F. The appellant had was allotted two PAN i.e AACPJ3994F and AFKPJ7706F. The appellant had filed PAN surrender letter before the jurisdictional AO for surrendering PAN filed PAN surrender letter before the jurisdictional AO for surrendering PAN filed PAN surrender letter before the jurisdictional AO for surrendering PAN AFKPJ7706F and also updated the department about the sam AFKPJ7706F and also updated the department about the same on 06.08.2013. e on 06.08.2013. Subsequently, assessment proceedings were initiated on the retainedPAN Subsequently, assessment proceedings were initiated on the retainedPAN Subsequently, assessment proceedings were initiated on the retainedPAN AACPJ3994F and notice u/s 142(1) were served upon the appellant against AACPJ3994F and notice u/s 142(1) were served upon the appellant against AACPJ3994F and notice u/s 142(1) were served upon the appellant against which the AR of the appellant had submitted the requisite details along with which the AR of the appellant had submitted the requisite details along with which the AR of the appellant had submitted the requisite details along with complete bank state complete bank statements and consequently order u/s 143(3) was passed ments and consequently order u/s 143(3) was passed dated 14.01.2014 assessing the total income of the appellant to Rs. 36,78,440 dated 14.01.2014 assessing the total income of the appellant to Rs. 36,78,440 dated 14.01.2014 assessing the total income of the appellant to Rs. 36,78,440 after verification of transactions stated in Bank statements and verifying his after verification of transactions stated in Bank statements and verifying his after verification of transactions stated in Bank statements and verifying his balance sheet. Also a penalty order u/s 272B of balance sheet. Also a penalty order u/s 272B of the Act was passed for having the Act was passed for having two PAN. 5.4 Thereafter, on 31.03.2019, the AO issued a notice u/s 148 of the Act on the Thereafter, on 31.03.2019, the AO issued a notice u/s 148 of the Act on the Thereafter, on 31.03.2019, the AO issued a notice u/s 148 of the Act on the surrendered PAN AFKPJ7706F. Thereafter order u/s 144 r.w.s. 147 was surrendered PAN AFKPJ7706F. Thereafter order u/s 144 r.w.s. 147 was surrendered PAN AFKPJ7706F. Thereafter order u/s 144 r.w.s. 147 was passed on 23.12.2019 on the said surrendered PAN that is AFKPJ7706F passed on 23.12.2019 on the said surrendered PAN that is AFKPJ7706F passed on 23.12.2019 on the said surrendered PAN that is AFKPJ7706F raising a demand of Rs. 3,65,96,870on the appellant. The assessment order aising a demand of Rs. 3,65,96,870on the appellant. The assessment order aising a demand of Rs. 3,65,96,870on the appellant. The assessment order appealed against is passed on PAN AFKPJ7706F, which was already appealed against is passed on PAN AFKPJ7706F, which was already appealed against is passed on PAN AFKPJ7706F, which was already surrendered by the appellant vide his letter. Therefore, the assessment order is surrendered by the appellant vide his letter. Therefore, the assessment order is surrendered by the appellant vide his letter. Therefore, the assessment order is defective and invlaid. The appellant w defective and invlaid. The appellant was already assessed on his original PAN as already assessed on his original PAN AACPJ3994J u/s 143(3) and order was also passed considering all the relevant AACPJ3994J u/s 143(3) and order was also passed considering all the relevant AACPJ3994J u/s 143(3) and order was also passed considering all the relevant submissions made by the then AR including financials and Bank statements submissions made by the then AR including financials and Bank statements submissions made by the then AR including financials and Bank statements and after being satisfied vide order dated 14.11.2014. Also a penalty u/s 272B and after being satisfied vide order dated 14.11.2014. Also a pena and after being satisfied vide order dated 14.11.2014. Also a pena was levied on the appellant vide its penalty order dated 14.11.2014 for holding was levied on the appellant vide its penalty order dated 14.11.2014 for holding was levied on the appellant vide its penalty order dated 14.11.2014 for holding two PAN. Thus the AO was very well aware of the other PAN. two PAN. Thus the AO was very well aware of the other PAN. 5.5 The Hon’ble Calcutta High Court in the case of Shakuntala Sales The Hon’ble Calcutta High Court in the case of Shakuntala Sales The Hon’ble Calcutta High Court in the case of Shakuntala Sales IncorporationVs.Assistant Commission IncorporationVs.Assistant Commissioner of Income Tax, Circle - 43/Circle 43/Circle - 44, Kolkata &Ors., W.P.A. 17644 of 2022 dated 16.08.2022 has held as udner:- Kolkata &Ors., W.P.A. 17644 of 2022 dated 16.08.2022 has held as udner: Kolkata &Ors., W.P.A. 17644 of 2022 dated 16.08.2022 has held as udner:
………………..By this writ petition, petitioner has challenged the impugned By this writ petition, petitioner has challenged the impugned By this writ petition, petitioner has challenged the impugned assessment order dated 29th March, 2022 under Section 147 of the Income Tax assessment order dated 29th March, 2022 under Section 147 of the Inco assessment order dated 29th March, 2022 under Section 147 of the Inco Act, 1961, relating to the assessment year 2017 Act, 1961, relating to the assessment year 2017-18. The main ground of 18. The main ground of challenge by the petitioner against the impugned assessment order dated 29th challenge by the petitioner against the impugned assessment order dated 29th challenge by the petitioner against the impugned assessment order dated 29th March, 2022 is that the same has been passed in total violation of principle of March, 2022 is that the same has been passed in total violation of principle of March, 2022 is that the same has been passed in total violation of principle of natural justice since natural justice since before passing the aforesaid impugned assessment order before passing the aforesaid impugned assessment order all the formal notices were issued under the old surrendered PAN being ABGFS all the formal notices were issued under the old surrendered PAN being ABGFS all the formal notices were issued under the old surrendered PAN being ABGFS 1657 Q and the surrendering of such old PAN and the current PAN ABIFS 5263 1657 Q and the surrendering of such old PAN and the current PAN ABIFS 5263 1657 Q and the surrendering of such old PAN and the current PAN ABIFS 5263 L was communicated to the office of the responde L was communicated to the office of the respondent assessing officer long back nt assessing officer long back on 28th July, 2015. On perusal of the relevant record annexed to the writ on 28th July, 2015. On perusal of the relevant record annexed to the writ on 28th July, 2015. On perusal of the relevant record annexed to the writ petition, I find that the return relating to the relevant assessment year 2017-18 petition, I find that the return relating to the relevant assessment year 2017 petition, I find that the return relating to the relevant assessment year 2017 was filed by the petitioner under the aforesaid new PAN which was allotted to was filed by the petitioner under the aforesaid new PAN which was all was filed by the petitioner under the aforesaid new PAN which was all the petitioner and in spite of that, the assessing officer concerned has passed the petitioner and in spite of that, the assessing officer concerned has passed the petitioner and in spite of that, the assessing officer concerned has passed the impugned assessment order under the old PAN as appears at page 65 of the the impugned assessment order under the old PAN as appears at page 65 of the the impugned assessment order under the old PAN as appears at page 65 of the writ petition. On a similar grievance relating to the assessment year 2015-16, writ petition. On a similar grievance relating to the assessment year 2015 writ petition. On a similar grievance relating to the assessment year 2015 the assessment against the petitioner was dropped by the order dated 29th ent against the petitioner was dropped by the order dated 29th ent against the petitioner was dropped by the order dated 29th July, 2022. Considering the submission of the parties, and facts and circumstances as Considering the submission of the parties, and facts and circumstances as Considering the submission of the parties, and facts and circumstances as appears from record the impugned order dated 29th March, 2022 being appears from record the impugned order dated 29th March, 2022 being appears from record the impugned order dated 29th March, 2022 being Annexure P-10 to the writ petition is q 10 to the writ petition is quashed. However, quashing of the uashed. However, quashing of the impugned assessment order will not prevent the respondent assessing officer to impugned assessment order will not prevent the respondent assessing officer to impugned assessment order will not prevent the respondent assessing officer to initiate any fresh proceeding and pass an order under Section 147 of the Act in initiate any fresh proceeding and pass an order under Section 147 of the Act in initiate any fresh proceeding and pass an order under Section 147 of the Act in accordance with law. accordance with law." 5.6 In view of the above facts and discuss In view of the above facts and discussion, as the appellant had filed PAN ion, as the appellant had filed PAN surrender letter before the jurisdictional AO for surrendering PAN AFKPJ7706F surrender letter before the jurisdictional AO for surrendering PAN AFKPJ7706F surrender letter before the jurisdictional AO for surrendering PAN AFKPJ7706F and also updated the department about the same on 06.08.2013 and as and also updated the department about the same on 06.08.2013 and as and also updated the department about the same on 06.08.2013 and as assessment proceedings were initiated on the retainedPAN AACPJ3994F and assessment proceedings were initiated on the retainedPAN AACPJ3994F and assessment proceedings were initiated on the retainedPAN AACPJ3994F and consequently order u/s 143(3) was passed dated 14.01.2014 assessing the nsequently order u/s 143(3) was passed dated 14.01.2014 assessing the nsequently order u/s 143(3) was passed dated 14.01.2014 assessing the total income of the appellant to Rs. 36,78,440 and also a penalty order u/s total income of the appellant to Rs. 36,78,440 and also a penalty order u/s total income of the appellant to Rs. 36,78,440 and also a penalty order u/s 272B of the Act was passed for having two PAN, I am of the considered view 272B of the Act was passed for having two PAN, I am of the considered view 272B of the Act was passed for having two PAN, I am of the considered view thatthe AO was very well informed o thatthe AO was very well informed of the facts and thus the assessment order f the facts and thus the assessment order dated 23.12.2019 passed u/s 144 r.w.s 147 of the Act against a surrendered dated 23.12.2019 passed u/s 144 r.w.s 147 of the Act against a surrendered dated 23.12.2019 passed u/s 144 r.w.s 147 of the Act against a surrendered PAN, is invalid and is liable to be quashed and the additions made are directed PAN, is invalid and is liable to be quashed and the additions made are directed PAN, is invalid and is liable to be quashed and the additions made are directed to be deleted. The appeal on Ground Nos 1 to 7 are thus tre to be deleted. The appeal on Ground Nos 1 to 7 are thus treated as allowed. ated as allowed.”
Before us, despite due service of notice, none appeared on Before us, despite due service of notice, none appeared on Before us, despite due service of notice, none appeared on behalf behalf behalf of of of the assessee, the the assessee, assessee, nor nor nor was any application was any was any application application seeking seeking seeking adjournment filed. We, therefore, formed the considered view that adjournment filed. We, therefore, formed the considered view that adjournment filed. We, therefore, formed the considered view that the assessee was not interested in pursuing the appeal. the assessee was not interested in pursuing the appeal the assessee was not interested in pursuing the appeal Accordingly, the matter was taken up for hearing ex parte qua the ex parte qua the Accordingly, the matter was taken up for hearing assessee, after duly hearing the submissions advanced by the , after duly hearing the submissions advanced by the , after duly hearing the submissions advanced by the learned Departmental Representative (Ld. DR). learned Departmental Representative (Ld. DR).
We have carefully considered the orders of the authorities We have carefully considered the orders of the authorities We have carefully considered the orders of the authorities below and perused the material placed on record. From the records, below and perused the material placed on record. From the records, below and perused the material placed on record. From the records, it emerges that the addition in question has been made by the it emerges that the addition in question has been made by the it emerges that the addition in question has been made by the learned Assessing Officer on account of certain investments which learned Assessing Officer on account of certain investments which learned Assessing Officer on account of certain investments which were found linked with the Permanent Account Number (PAN) that re found linked with the Permanent Account Number (PAN) that re found linked with the Permanent Account Number (PAN) that the assessee claims to have surrendered. It is also observed that the assessee claims to have surrendered. It is also observed that the assessee claims to have surrendered. It is also observed that during the course of reassessment proceedings, the assessee did during the course of reassessment proceedings, the assessee did during the course of reassessment proceedings, the assessee did not respond to the statutory notices issued by the Assessing Officer, not respond to the statutory notices issued by the Assessing Offi not respond to the statutory notices issued by the Assessing Offi whereupon the assessment came to be completed ex parte under whereupon the assessment came to be completed whereupon the assessment came to be completed section 144 read with section 147 of the Act. section 144 read with section 147 of the Act.
6.1 It is a matter of record that the transactions giving rise to the It is a matter of record that the transactions giving rise to the It is a matter of record that the transactions giving rise to the impugned additions emanate from term deposits and investments impugned additions emanate from term deposits and investments impugned additions emanate from term deposits and investments wherein the surrendered PAN appears to have been quoted. The surrendered PAN appears to have been quoted. The surrendered PAN appears to have been quoted. The assessee, being the beneficiary of such transactions, bore the assessee, being the beneficiary of such transactions, bore the assessee, being the beneficiary of such transactions, bore the primary onus to explain the nature and source thereof before the primary onus to explain the nature and source thereof before the primary onus to explain the nature and source thereof before the Assessing Officer. The mere plea that the said PAN had been Assessing Officer. The mere plea that the said PAN had been Assessing Officer. The mere plea that the said PAN had been surrendered, without substantiating the same contemporaneously t substantiating the same contemporaneously t substantiating the same contemporaneously before the Assessing Officer, cannot absolve the assessee from before the Assessing Officer, cannot absolve the assessee from before the Assessing Officer, cannot absolve the assessee from discharging the statutory burden cast upon him under the scheme discharging the statutory burden cast upon him under the scheme discharging the statutory burden cast upon him under the scheme of the Act.
6.2 It is further not borne out from the records that the Assessing It is further not borne out from the records that the Assessing It is further not borne out from the records that the Assessing Officer, who initiated the reassessment proceedings, had been duly er, who initiated the reassessment proceedings, had been duly er, who initiated the reassessment proceedings, had been duly informed or made aware of the alleged surrender of the said PAN. In informed or made aware of the alleged surrender of the said PAN. In informed or made aware of the alleged surrender of the said PAN. In such circumstances, the learned CIT(A) was not justified in treating such circumstances, the learned CIT(A) was not justified in treating such circumstances, the learned CIT(A) was not justified in treating the assessment as void the assessment as void ab initio on the ground of want of on the ground of want of jurisdiction. It must be appreciated that the jurisdiction. It must be appreciated that the PAN is but an PAN is but an instrument of identification instrument of identification, devised for efficient administration , devised for efficient administration and correlation of records, and cannot by itself be equated with the and correlation of records, and cannot by itself be equated with the and correlation of records, and cannot by itself be equated with the juridical personality of the asses juridical personality of the assessee. An error in quoting or adopting see. An error in quoting or adopting an incorrect PAN, by itself, would not render the proceedings void, an incorrect PAN, by itself, would not render the proceedings void, an incorrect PAN, by itself, would not render the proceedings void, but at best constitute an but at best constitute an irregularity of a curable nature irregularity of a curable nature, subject to verification of factual compliance. to verification of factual compliance.
6.3 We also find that We also find that though the ld CIT(A) refereed to the decision efereed to the decision he Hon’ble Calcutta High Court in the case of Shakuntala Sales Shakuntala Sales of the Hon’ble Calcutta High Court in the case of IncorporationVs.Assistant Commissioner of Income Tax,(supra) IncorporationVs.Assistant Commissioner of Income Tax,(supra IncorporationVs.Assistant Commissioner of Income Tax,(supra but he accepted the assessee’s assertion of surrender of PAN at its accepted the assessee’s assertion of surrender of PAN at its accepted the assessee’s assertion of surrender of PAN at its face value, without any independent face value, without any independent verification from the Assessing verification from the Assessing Officer or from the Directorate of Systems, Income Officer or from the Directorate of Systems, Income-tax Department, tax Department, as to whether such surrender was actually made and duly as to whether such surrender was actually made and duly as to whether such surrender was actually made and duly acknowledged. The absence of such verification, in our considered acknowledged. The absence of such verification, in our considered acknowledged. The absence of such verification, in our considered view, vitiates the appellate findin view, vitiates the appellate finding.
6.4 In the totality of the facts and circumstances, and in the In the totality of the facts and circumstances, and in the In the totality of the facts and circumstances, and in the interest of substantial justice, we deem it just and proper to set interest of substantial justice, we deem it just and proper to set interest of substantial justice, we deem it just and proper to set aside the impugned order of the learned CIT(A) and restore the aside the impugned order of the learned CIT(A) and restore the aside the impugned order of the learned CIT(A) and restore the matter to the file of the learned Assessing Officer for a de novo matter to the file of the learned Assessing Officer for a matter to the file of the learned Assessing Officer for a adjudication. The Assessing Officer shall ascertain: adjudication. The Assessing Officer shall ascertain:
Whether the assessee had, in fact, informed the Department or Whether the assessee had, in fact, informed the Department or Whether the assessee had, in fact, informed the Department or the Assessing Officer concerned regarding the surrender of the the Assessing Officer concerned regarding the surrender of the the Assessing Officer concerned regarding the surrender of the PAN in question prior to completion of the reassessment; and PAN in question prior to completion of the reassessment; and PAN in question prior to completion of the reassessment; and 2. Whether, in connection with the impugned term deposits or connection with the impugned term deposits or connection with the impugned term deposits or investments, the surrendered PAN was in fact quoted or investments, the surrendered PAN was in fact quoted or investments, the surrendered PAN was in fact quoted or reported by the assessee. reported by the assessee.
6.5 The learned Assessing Officer shall be at liberty to conduct The learned Assessing Officer shall be at liberty to conduct The learned Assessing Officer shall be at liberty to conduct such further enquiries as may be considered necessary and such further enquiries as may be considered necessary and such further enquiries as may be considered necessary and thereafter pass a speaking order in accordance with law. It is after pass a speaking order in accordance with law. It is after pass a speaking order in accordance with law. It is needless to add that the assessee shall be afforded due and needless to add that the assessee shall be afforded due and needless to add that the assessee shall be afforded due and adequate opportunity of being heard before any final decision is adequate opportunity of being heard before any final decision is adequate opportunity of being heard before any final decision is taken.
6.6 Accordingly, the grounds raised by the Revenue are Accordingly, the grounds raised by the Revenue are Accordingly, the grounds raised by the Revenue are allowed for statistical purposes statistical purposes.
In the result, the appeal of the Revenue is allowed for In the result, the appeal of the Revenue is allowed for In the result, the appeal of the Revenue is allowed for statistical purposes. statistical purposes.