TINKU WINES,CHANDIGARH vs. INCOME TAX OFFICER, CHANDIGARH

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ITA 226/CHANDI/2025Status: DisposedITAT Chandigarh05 August 2026AY 2017-1811 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the lower authorities had not examined the returns filed under the other PANs where the cash deposits were allegedly disclosed. Therefore, the matter was restored to the Assessing Officer for a comprehensive verification of all three PANs to determine if the deposits were already accounted for.

What were the facts?

The assessee, a partnership firm, deposited a significant amount of cash during demonetization. The Assessing Officer treated these deposits as unexplained income under Section 69A and taxed them under Section 115BBE, as the assessee had multiple PANs and the deposits were made under a different PAN than the one under assessment.

What were the issues?

Whether cash deposits made during demonetization, reflected under different PANs of the same assessee, can be taxed again under a different PAN without verifying prior disclosure and assessment under the other PANs.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI VIJAY VARMA

For Appellant: Shri B.M.Monga, Advocate & Shri Rohit Kaura, Advocate
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr.DR
Hearing: 04.08.2026Pronounced: 05.08.2026

PER LALIET KUMAR, JM

This is an appeal filed by the assessee feeling aggrieved by the order passed by the ld. Commissioner of Income Tax (Appeals) NFAC [in short ‘the CIT (A)’] dated 13.12.2024 passed for assessment year 2017-18.

2.

The facts of the case are that the assessee is a partnership firm engaged in the business of retail liquor. During the demonetization period, information received under "Operation

ITA 226/CHD/2025 A.Y. 2017-18 2 Clean Money" revealed that cash amounting to ₹1,20,61,500/- had been deposited in two bank accounts. Since no return of income had initially been filed for the year under consideration, proceedings under section 147 were initiated. In response to the notice issued under section 148, the assessee filed its return declaring nil income. During the assessment proceedings, the Assessing Officer required the assessee to explain the source of the cash deposits made during the demonetization period. The assessee contended that the cash deposits pertained to another PAN of the same firm, which had been inadvertently furnished to the banks after change in the constitution of the partnership, and that the receipts stood duly recorded in the books maintained under the other PAN. The Assessing Officer, however, rejected the explanation, holding that the assessee had obtained multiple PANs and had failed to satisfactorily establish the source of the cash deposits. Consequently, the entire amount of ₹1,20,61,500/- was treated as unexplained money under section 69A and subjected to tax under section 115BBE. The learned CIT(A) affirmed the action of the Assessing Officer by holding that the assessee had failed to substantiate the availability of the opening cash balance and had also failed to establish the source of the cash deposits with supporting evidence. 3. The learned Authorised Representative invited our attention to pages 506 to 508 of the Paper Book, wherein the details of the

ITA 226/CHD/2025 A.Y. 2017-18 3 three PANs pertaining to the assessee have been placed on record, namely PAN No. AAKFT1380N, PAN No. AALFT0286G, and PAN No. AAIFT2528E. It was submitted that the entire controversy has arisen merely because the cash deposits made during the demonetization period were reflected under different PANs, whereas the present assessment has been framed under PAN No. AALFT0286G.

4.

The learned AR further drew our attention to page 25 of the Paper Book, being the return of income filed for Assessment Year 2017-18 under PAN No. AAKFT1380N, and submitted that the assessee had duly disclosed the cash deposited during the demonetization period in the HDFC Bank account amounting to ₹1,01,00,000/-. It was submitted that the said amount forms part of the very cash deposits which have been brought to tax by the Assessing Officer in the present proceedings.

5.

Our attention was also invited to page 515 of the Paper Book, being the return of income filed under PAN No. AAIFT2528E, wherein the assessee had disclosed cash deposits of ₹19,86,500/- made during the period 09.11.2016 to 30.12.2016 in the Punjab National Bank account. It was thus submitted that the cash deposits made in both the bank accounts stood duly disclosed in the respective returns of income filed under PAN Nos. AAKFT1380N and AAIFT2528E.

ITA 226/CHD/2025 A.Y. 2017-18 4 6. On the strength of the aforesaid documentary evidence, the learned AR contended that the cash deposited in the HDFC Bank account amounting to ₹1,01,00,000/- had already been disclosed under PAN No. AAKFT1380N, whereas the cash deposited in the Punjab National Bank account amounting to ₹19,86,500/- had been disclosed under PAN No. AAIFT2528E. Therefore, according to the learned AR, the impugned cash deposits were never liable to be assessed once again in the hands of the assessee under PAN No. AALFT0286G, as doing so would amount to taxing the same receipts twice merely because the transactions stood reflected under different PANs.

7.

Without prejudice to the aforesaid submissions, the learned AR fairly submitted that the assessee has no objection if the matter is restored to the file of the Assessing Officer for a comprehensive verification. It was prayed that the Assessing Officer may be directed to call for the assessment records, returns of income, books of account, cash books and bank statements pertaining to all the three PANs, namely AAKFT1380N, AALFT0286G and AAIFT2528E, and verify whether the impugned cash deposits had already been disclosed, accounted for and subjected to examination under the respective PANs. The learned AR further submitted that the assessee shall fully cooperate in the proceedings and produce all the necessary documentary evidence

ITA 226/CHD/2025 A.Y. 2017-18 5 to establish that the cash deposits constituted disclosed business receipts and stood explained in accordance with law.

8.

In support of the prayer for restoration of the matter to the file of the Assessing Officer for proper verification, the learned AR placed reliance upon the following decisions of the Coordinate Benches of the Tribunal: I. Samreen Shafi Chattabal Vs. ITO, ITAT Amritsar, ITA No. 67/Asr/2023, order dated 18.05.2023. II. Kailash Brick Traders Vs. ITO, ITAT Chandigarh, ITA No. 1020/Chd/2024, order dated 24.02.2025. III. Maneken Keshvalla Patel Vs. National Faceless Appeal Centre, ITAT Mumbai, ITA No. 1107/Mum/2022, order dated 31.05.2023. IV. Sandhya Das Vs. ITO, ITAT Kolkata, ITA No. 2472/Kol/2025, order dated 13.01.2026. 9. Relying upon the aforesaid decisions, it was submitted that where the relevant material requires factual verification and the documentary evidence has not been examined by the lower authorities, the appropriate course is to restore the matter to the file of the Assessing Officer for a fresh adjudication after due verification and after affording adequate opportunity of hearing to the assessee.

10.

Per contra, the learned Departmental Representative strongly supported the orders of the lower authorities. It was submitted that under the provisions of the Income-tax Act, an assessee cannot legally possess multiple PANs, and therefore, the

ITA 226/CHD/2025 A.Y. 2017-18 6 explanation furnished by the assessee itself demonstrates a clear violation of law. It was further submitted that the assessment under consideration pertains to Assessment Year 2017-18, and at this distant point of time, it may not be possible for the Assessing Officer to independently verify whether the very same cash deposits had actually been examined in the assessment records pertaining to the other PANs.

11.

Nevertheless, it was submitted by the ld. DR that if the Tribunal is inclined to restore the matter, appropriate directions may be issued to ensure complete verification of all the PANs before granting any relief to the assessee.

12.

We have heard the rival submissions, perused the orders of the authorities below and carefully examined the material placed on record. The controversy involved in the present appeal is a peculiar one and revolves around the taxability of the cash deposits made during the demonetization period in the backdrop of the assessee having been allotted more than one Permanent Account Number (PAN).

13.

During the course of hearing, the learned Authorised Representative drew our attention to pages 506 to 508 of the Paper Book, wherein the details of the three PANs, namely AAKFT1380N, AALFT0286G and AAIFT2528E, have been placed on record. It was contended that the addition has been sustained merely because

ITA 226/CHD/2025 A.Y. 2017-18 7 the assessment under consideration has been framed under PAN No. AALFT0286G, whereas the impugned cash deposits had already been disclosed under the other PANs held by the assessee.

14.

The learned AR further invited our attention to page 25 of the Paper Book, being the return of income filed for Assessment Year 2017-18 under PAN No. AAKFT1380N, to demonstrate that the assessee had disclosed cash deposits of ₹1,01,00,000/- in the HDFC Bank account during the demonetization period. Likewise, our attention was invited to page 515 of the Paper Book, being the return of income filed under PAN No. AAIFT2528E, wherein cash deposits of ₹19,86,500/- made in the Punjab National Bank account during the period from 09.11.2016 to 30.12.2016 were disclosed. According to the learned AR, these documents prima facie demonstrate that the cash deposits sought to be taxed in the present assessment were already reflected in the returns filed under the aforesaid PANs and, therefore, the same receipts cannot again be subjected to tax under PAN No. AALFT0286G.

15.

At the same time, we find that neither the Assessing Officer nor the learned CIT(A) had the occasion to examine the aforesaid returns of income and the documentary evidence now relied upon by the assessee to ascertain whether the impugned cash deposits had actually been disclosed, examined and accepted in the assessments relating to the other PANs. The record before us also

ITA 226/CHD/2025 A.Y. 2017-18 8 does not contain any categorical finding on this crucial aspect. In the absence of such factual verification, it would neither be appropriate to sustain the addition merely because the assessment has been framed under a different PAN, nor would it be proper to delete the addition solely on the basis of the assessee's assertion without proper verification.

16.

The learned Authorised Representative has, in fact, fairly submitted that the assessee has no objection if the matter is restored to the file of the Assessing Officer for a comprehensive verification and has also agreed to produce all the returns of income, books of account, cash books, bank statements and other supporting documents relating to all the three PANs, namely AAKFT1380N, AALFT0286G and AAIFT2528E. We find the said request to be fair and reasonable. Accordingly, in the interest of substantial justice, we set aside the impugned orders on this issue and restore the matter to the file of the Assessing Officer with the following directions:

(i) The Assessing Officer shall call for and examine the complete assessment records relating to PAN Nos. AAKFT1380N, AALFT0286G and AAIFT2528E.

(ii) The Assessing Officer shall specifically verify whether the cash deposits of ₹1,01,00,000/- made in the HDFC Bank account and ₹19,86,500/- deposited in

ITA 226/CHD/2025 A.Y. 2017-18 9 the Punjab National Bank account during the demonetization period had already been disclosed in the returns of income filed under PAN Nos. AAKFT1380N and AAIFT2528E, respectively, and whether the said deposits had formed the subject matter of assessment or verification by the jurisdictional Assessing Officers while framing the assessments under those PANs.

(iii) In the event it is found that the aforesaid cash deposits had already been duly examined on merits and stood accepted after proper verification in the assessments relating to the respective PANs, no addition on account of the same cash deposits shall survive in the present assessment framed under PAN No. AALFT0286G, since the same income cannot be brought to tax twice.

(iv) However, if the Assessing Officer finds that although the cash deposits were disclosed in the returns filed under PAN Nos. AAKFT1380N and AAIFT2528E, the source, nature, identity, genuineness and creditworthiness of such deposits were never examined or adjudicated upon by the jurisdictional Assessing Officers. In that eventuality, the Assessing Officer shall undertake a comprehensive examination of the issue

ITA 226/CHD/2025 A.Y. 2017-18 10 after calling for the records relating to all three PANs. The Assessing Officer shall thereafter record a clear and categorical finding as to whether the impugned cash deposits stand satisfactorily explained within the four corners of the provisions of the Income-tax Act, 1961.

(v) Needless to observe, before passing the fresh order, the Assessing Officer shall afford adequate opportunity of hearing to the assessee, permit the assessee to place on record all relevant documentary evidence, including the books of account, cash books, bank statements and returns of income relating to all the three PANs, and thereafter pass a reasoned and speaking order strictly in accordance with law and in compliance with the principles of natural justice.

17.

Since the assessee has itself requested for restoration of the matter and has expressly undertaken to cooperate in the verification proceedings, it shall extend full cooperation before the Assessing Officer and the plea of limitation shall not be raised by the assessee in respect of the assessment for any of the PAN numbers. The Assessing Officer shall decide the issue uninfluenced by any observation made either in the assessment

ITA 226/CHD/2025 A.Y. 2017-18 11 order, the order of the learned CIT(A), or in the present order, except to the extent of the directions issued hereinabove.

18.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced on 05th August,2026.

Sd/- Sd/-

(VIJAY VARMA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam”

आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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