INCOME TAX OFFICER, PORBANDAR vs. SHRI PORBANDAR CREDIT COOPERATIVE SOCIETY LTD., PORBANDAR

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 137/RJT/2025 [ �नधा�रण वष�/Assessment Year: 2016-2017] Income Tax Officer Shri Porbandar Credit Cooperative Income Tax Office, 2nd Floor, Kuber Society Ltd. Vs. Land Mark Building, SVP Road, 3rd Floor, Meera Shoping Centrel, Porbandar-360575, Gujarat Liberty Cross Lane, Probandar-360575, Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAAAS8104Q (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Vimal Desai, Ld. AR Respondent by : Shri Kiran Unavekar, Ld. CIT(DR) Date of Hearing : 21/07/2026 Date of Pronouncement : 23/07/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the revenue, pertaining to Assessment Year (AY) 2016-17, is directed against the order under section 250 of the Income-tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the National Faceless Appeal Centre [hereinafter referred to as ‘NFAC’], dated 02.01.2025, which in turn arises out of an order passed by assessing officer u/s. 147 of the Act, dated 23.03.2024.

ITA No. 137/RJT/2025 Sh. Porbandar Credit Co. Op. Society sections 147 read with 144 of the Income-tax Act, 1961. In the case of the assessee the Assessing Officer noticed that no return of income had been filed in respect of PAN AAAAS8104Q. Based on information received regarding cash deposits exceeding ₹10,00,000/- in the savings bank account maintained with Porbandar Commercial Co-operative Bank Ltd., Porbandar Branch, proceedings under section 148 of the Act were initiated. During the assessment proceedings, the assessee contended that the notice had been issued with reference to PAN AAAAS8104Q, which was never used for filing its return of income. It was submitted that the assessee had inadvertently been allotted another PAN, namely AAAAS8104Q, whereas it had regularly been filing its returns of income under PAN AAAAS2528L. The assessee further submitted that it is a co-operative society whose accounts are audited under the Gujarat Co-operative Societies Act, as well as under the Income- tax Act, 1961, and that the return of income for the year under consideration had duly been filed under PAN AAAAS2528L along with the audited financial statements and other relevant documents. The assessee also explained that immediately upon coming to know of the existence of the duplicate PAN AAAAS8104Q, it filed an application for cancellation of the said PAN on 05.12.2022, much before the assessment proceedings under section 147 of the Act commenced. It was further submitted that for all assessment years from 2007-08 to 2023-24, the returns of income had consistently been filed only under PAN AAAAS2528L.However, the Assessing Officer observed that cash deposits amounting to ₹8,79,24,353/- had been made in the savings bank account maintained with Porbandar Commercial Co-operative Bank Ltd. Since, according to the Assessing Officer, the assessee failed to satisfactorily explain the source of the deposits, the entire amount of ₹8,79,24,353/- was treated as unexplained and added to the total income while framing the assessment under sections 147 read with 144 of the Act.

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ITA No. 137/RJT/2025 Sh. Porbandar Credit Co. Op. Society 03. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who deleted the addition.

The relevant extracts from Ld.CIT(A)’s findings, as contained in Paragraph-6 to 7 of the Appellate Order, are reproduced hereunder:

“6. The appellant is a credit cooperative Society. In this case, there was no return of income u/s 139. The assessment was re-opened on the basis of information that the appellant deposited cash of Rs. 8,79,24,353 in a SB a/c No.4507 with Porbandar Commercial Co Operative Bank during the previous year. 6.1. The appellant has argued that this amount is part of its normal business and hence duly accounted. According to the appellant it has been issued a later PAN: AAAAS2528L, under which it has filed the return of income for AY 2016-17 where this bank account is also considered. The PAN, AAAAS8104Q is not is use but the account with Porbandar Commercial Co Operative Bank is linked to the same. 6.2. The appellant has furnished statement of Bank account No. 4507 held with Porbandar Commercial Co Operative Bank. This shows total deposits of Rs. 10,29,59,975 and cash deposit of Rs.8,79,24,353 during the year. The balance of this account is reflected in the balance sheet. The appellant has filed return of income for AY 2016-17 under the PAN: AAAAS2528L. The gross income admitted is Rs.9,99,442. The total income is NIL after claiming deduction u/s 80P. 6.3. Since it is evident that the appellant has been issued with a PAN viz. AAAAS2528L and has filed a valid return of income for AY 2016-17 wherein the impugned bank account is considered, the claim of the appellant that the credits in the bank account are part of its normal business and duly accounted is acceptable. Addition made u/s 68 may be deleted. 6.4. Grounds 2 to 5 are allowed. Grounds 1, 6 to 8 are general and consequential. These grounds are not separately adjudicated. 7. In the result, appeal is treated as allowed.”

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ITA No. 137/RJT/2025 Sh. Porbandar Credit Co. Op. Society the notice was issued with reference to PAN AAAAS8104Q, which was never used by the assessee for filing its returns. In fact, the assessee had regularly filed its returns under PAN AAAAS2528L, and all transactions, including the savings bank account bearing No. 4507 with Porbandar Commercial Co-operative Bank Ltd., were duly reflected in the books of account and the return of income for the year under consideration. The Ld. AR drew our attention to page 74 of the paper book, wherein the balance in the said bank account as on 31.03.2016 was reflected at ₹30,52,086.70. He also referred to Schedule 5 of the audited balance sheet, wherein the same bank balance was disclosed. It was therefore submitted that the bank account in question had duly been disclosed in the books of account as well as in the return of income filed under PAN AAAAS2528L. The confusion arose only because two PANs had been allotted to the same assessee, and the duplicate PAN had inadvertently become linked with the bank account.

We have heard the rival submissions and perused the material available on 07. record. We find that the assessee has placed on record a copy of the audited balance sheet, including Schedule-5, wherein the cash and bank balances have been disclosed. The balance in the savings bank account maintained with Porbandar Commercial Co-operative Bank Ltd., Porbandar Branch, stands reflected at ₹30,52,086.70/- as on 31.03.2016. The said bank account was duly disclosed in the audited financial statements as well as in the return of income filed under PAN AAAAS2528L.In these facts and circumstances, it cannot be said that the assessee had concealed the existence of the bank account or failed to disclose the transactions carried out therein. The entire controversy has arisen only because two PANs had

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ITA No. 137/RJT/2025 Sh. Porbandar Credit Co. Op. Society been allotted to the same assessee. The assessee had consistently been filing the return of income under the regular i.e., PAN AAAAS2528L, and had also applied for cancellation of the duplicate PAN even before the initiation of the reassessment proceedings. We further find that in the assessment framed under PAN AAAAS8104Q, the bank account in question was linked, whereas in the return of income filed under PAN AAAAS2528L, the bank details and the corresponding bank balance were duly reflected. In these circumstances, we deem it appropriate to restore the matter to the file of the Assessing Officer with the directions that the Assessing Officer shall verify all the details relating to the account maintained with Porbandar Commercial Co-operative Bank Ltd., Account No. 4507, and examine whether the transactions appearing therein have already been disclosed in the return of income filed under PAN AAAAS2528L, if it is found that the transactions have already been reflected in the return of income filed under the regular PAN, the Assessing Officer shall also obtain and verify the names, addresses, and PAN details of the persons connected with the deposits made in the said bank account, if such verification is considered necessary. Further, the Assessing Officer shall verify the return of income filed by the assessee under the correct PAN and ascertain the status of the application for cancellation of the duplicate PAN. The Assessing Officer shall further examine whether any independent transactions were carried out under PAN AAAAS8104Q during the relevant previous year. If any such transactions are found and the same have not been reflected in the return of income filed under the regular PAN AAAAS2528L, the Assessing Officer shall take appropriate action in accordance with law to safeguard the interests of the Revenue. The Assessing Officer shall thereafter decide the issue afresh in accordance with law after providing the assessee with a reasonable opportunity of being heard. Accordingly, the appeal of the Revenue is allowed for statistical purposes. The order of the Commissioner of

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ITA No. 137/RJT/2025 Sh. Porbandar Credit Co. Op. Society Income-tax (Appeals) is set aside, and the matter is restored to the file of the Assessing Officer in terms of the directions contained hereinabove.

Order pronounced in the open court on this 23rd day of July, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 23/07/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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