THE KALNA TOWN CREDIT COOPERATIVE BANK LIMITED AND ANR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE N BURDWAN

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WPA/10969/2022HC CalcuttaWBCHCA023493202229 June 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN2 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal quashed the impugned notice under Section 148 of the Income Tax Act, 1961, dated March 25, 2021, and the subsequent assessment order dated March 29, 2022. The reasoning was based on the admitted fact that these actions were taken using a PAN that had been surrendered long ago and was no longer in existence. The Tribunal noted that the assessing officer had wrongly recorded that returns for earlier assessment years were filed under the old PAN, indicating a total non-application of mind. The quashing of the notice and order does not preclude the assessing officer from initiating fresh proceedings in accordance with the law in the future. The writ petition was disposed of with this observation and direction.

What were the facts?

The petitioners, The Kalna Town Co-operative Bank Limited & Anr., challenged an assessment order dated March 29, 2022, passed under Section 147 read with Section 144 of the Income Tax Act, 1961, for assessment year 2017-18, and a notice dated March 25, 2021, under Section 148 of the Act. The challenge was based on the grounds that these actions were taken using a surrendered PAN (No. AACCT1533G) dated May 22, 2009. The petitioners asserted that all subsequent returns and assessments, from assessment year 2012-13 onwards, were processed under a new PAN (No. AABATT6875E). Copies of returns and assessment orders for subsequent years were submitted as evidence. The respondent Income Tax authority did not deny these facts.

What were the issues?

1. Whether the notice dated March 25, 2021, under Section 148 of the Income Tax Act, 1961, and the subsequent assessment order dated March 29, 2022, are legally valid when passed in relation to a surrendered PAN (No. AACCT1533G) for assessment year 2017-18. Assessee's contention: The notice and assessment order are bad in law because they were issued using a PAN that was surrendered on May 22, 2009. All subsequent filings and assessments have been conducted under a new PAN (No. AABATT6875E), and evidence of this was provided. The assessing officer failed to apply their mind by issuing these notices under an invalid PAN. Revenue's contention: The respondent Income Tax authority, through their learned advocate, was not in a position to deny the allegation and contradict the admitted facts that the impugned notice and assessment order were passed in a wrong PAN number which is not in existence. They also conceded that the assessing officer wrongly recorded that returns for assessment years 2013-14 and 2014-15 were filed under the old, surrendered PAN.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148

AI-generated summary — verify with the full judgment below

29.06.

2022. p.b. Sl. No.

7.

W.P.A. 10969 of 2022 The Kalna Town Co-operative Bank Limited & Anr. Vs. Assistant Commissioner, Income Tax, Circle – 1, & Ors. Mr. Rajeev Kumar Agarwal, Mr. R. Chatterjee. ……..for the petitioners. Mr. S. Roy Chowdhury, Mr. Soumen Bhattacharya. ……..for the respondents. Heard learned advocates appearing for the parties. By this writ petition, petitioner has challenged the impugned assessment order dated 29th March, 2022 under Section 147 read with Section 144 of the Income Tax Act, 1961 relating to the assessment year 2017-18 and also the notice dated 25th March, 2021 under Section 148 of the Act, on the ground that the same are bad in law for the reason that the aforesaid impugned notice and assessment order have been passed in a PAN being No.AACCT1533G which has been surrendered long back on 22nd May, 2009 and thereafter all the returns were filed and assessments were made under new PAN being No.AABATT6875E and petitioner files the copies of the returns and assessment orders relating to several assessment years from 2012-13 onwards which may be kept with the record.

2 Mr. Roy Chowdhury, learned advocate appearing for the respondent Income Tax authority is not in a position to deny the allegation and contradict the admitted facts as appears from record that the impugned notice under Section 148 and assessment order under Section 147 of the act have been passed in a wrong PAN number which is not in existence and not only that the assessing officer in the impugned assessment order has wrongly recorded that Income Tax Return for the assessment years 2013-14, 2014-15 has been filed the old PAN number which is not in existence and has been surrendered long back and it shows total non-application of mind by the assessing officer. Considering the submission of the parties, the impugned notice under Section 148 of the Income Tax Act, 1961 dated 25th March, 2021 and the subsequent assessment order dated 29th March, 2022 are quashed. However, quashing of the aforesaid notice and the assessment order will not prevent the assessing officer to initiate any fresh proceeding in future in accordance with law. With this observation and direction, this writ petition being WPA No.10969 of 2022 stands disposed of. (Md. Nizamuddin, J.)

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