ITO - 12(3)(3), MUMBAI vs. M/S. MALAD INDUSTRIAL UNITS CO-OP. LTD., MUMBAI

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ITA 6361/MUM/2019Status: DisposedITAT Mumbai27 July 2021AY 2011-126 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) directed the AO to verify the assessee's books of accounts and make adjustments considering the entity as a society, not a company. The ITAT affirmed this decision, finding it judicious and correct.

What were the facts?

The assessee, a cooperative society, initially obtained a PAN as a company due to a consultant's error. The assessment was made under this incorrect PAN. The assessee later obtained a correct PAN as an AOP and filed an appeal under the new PAN.

What were the issues?

Whether the CIT(A) erred in setting aside the assessment order for verification and admitting additional evidence without giving the AO an opportunity. The core issue was the incorrect PAN used for assessment and the subsequent appellate proceedings.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 94A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: HON’BLE SHRI AMARJEET SINGH, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Respondent: Ms. Smita Verma, Ld. DR

Amarjit Singh (Judicial Member)

1.

The revenue has filed the present appeal against the order of Ld. CIT(A)-21, Mumbai, dated 28.06.2019 for the Assessment Year 2011-12. 2. The revenue has rasied the following grounds of appeal:-

1.

On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in setting aside the assessment order with directions to make verification which is not permissible by law.

2.

On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in admitting additional evidences filed by the assessee without giving a reasonable opportunity to the AO and accordingly is in contravention of Rule 46A of the Income Tax Act 1961. 3. The appellant prays that the order of the Ld. CIT(A) on the grounds be set aside and that of the Assessing Officer be restored.

4.

The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.

3.

At the outset, it is noticed that none has appeared on behalf of assessee in spite of calls. On the other hand, Ld. DR is present and is ready with arguments. Therefore, we have decided to proceed with the hearing of the case ex-parte with the assistance of the Ld. DR and the material placed on record.

4.

The brief facts of the case are that assessee is a corporate entity registered under the Companies Act, 1956. The assessee was under obligation to file the return of income u/s 139(1) of the Act, but assessee did not file the return of income. On perusal of AIR/NMS data, assessee received the interest to the tune of Rs. 9,98,988/- on which TDS u/s 94A was deposited. The notice was given and after reply of the assessee, the said interest income was added to the income of the assessee and the income of the assessee was assessed to the tune of Rs. 9,98,988/-.

5.

Feeling aggrieved, assessee filed the appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of the assessee partly allowed the claim of the assessee. Aggrieved, by the said order, the revenue has filed the present appeal before us on the aforementioned grounds.

6.

Ground No. 1 to 3 are inter-related and inter-connected, therefore we adjudicate these grounds altogether. Ld. DR appearing on behalf of the revenue objected to the findings of Ld. CIT(A). Before going through the appeal of the revenue, we deem it fit to peruse the findings of Ld. CIT(A), which are as under:-

Ground No 1 and 2 The appellant raised two grounds of appeal and both the grounds pertain to the assessment order passed u/s 144 of the Act and assessed income determined by the AO, Since both grounds of appeal are related to each other, the grounds are adjudicated together as under. During the course of appellate proceedings, the appellant submitted that despite being a Registered Co-operative Society under Co-operative Society Act, it was initially allotted PAN-AADCM9473B (which was picked up for scrutiny under consideration) since the Consultant wrongly mentioned the nature of entity as "Company" while applying for PAN. The appellant further stated that on realizing the mistake, it re-applied for a fresh PAN during FY 2014-15 as an AOP and PAN-AADAM3119Q was allotted. It is seen that the present appeal is filed under the new PAN- AADAM3119Q and the appellant requested to accept the appeal under said PAN on the ground that while filing appeal under PAN-AADCM9473B online, the portal asked for CIN, name of Director and DIN mandatorily and the appellant being a Co-operative society does not have such details. I have carefully considered the facts of the case and submissions filed by the appellant. Though the reason cited by the appellant looks genuine, since appeal is related to a particular PAN which has been picked up for scrutiny and the AO has made the additions under the said PAN, the current appeal filed under new PAN has become non- est and cannot be admitted. Without prejudice to the above, the appeal filed under new PAN cannot be admitted for the reason that the appellant holds the new PAN w.e.f F.Y. 2014-15 and the disputed income was assessed for F.Y. 2010-11 and the income assessed under a pan cannot be shifted to another PAN as per the provisions of the Act. In the light of the problems faced by the appellant, the present appeal is considered to have been filed against the old PAN- AADCM9473B which was picked up for scrutiny and the AO has assessed. During the year under consideration, the appellant was holding one PAN which was selected for scrutiny and since the appellant was not entitled to hold the said PAN due to its nature of business, the appellant was supposed to have surrendered the said PAN and applied for a new one/^When the appellant used the PAN for various transactions during the year and opened the bank account by submitting the said PAN, it is liability of the appellant to file return of income as per the provisions of the Act and pay due taxes on the return income, if any. However, since the appellant held a PAN entitled for a Company, in the interest of natural justice, the assessment needs to be done considering the nature of business of the entity. It is apparent from records that the appellant was a Co- operative society registered under Co-operative Society Act. On the request made by the appellant society, the AO is directed to verify the books of accounts of the appellant company and make requisite adjustment in the assessed income considering the appellant as a Society as per the provisions of the Act. The grounds of appeal are accordingly allowed subject to verification.

7.

On perusal of the above, we find that initially the assessment was reopened under PAN-AADCM9473B. The name of the company

was wrongly mentioned, therefore assessee re-applied for fresh PAN during FY 2014-15 and PAN No. PAN-AADAM3119Q was allotted. The assessee filed the appeal before Ld. CIT(A) under the new PAN-AADAM3119Q. The case of the assessee was reopened under old PAN No. AADCM9473B. The assessee is in fact a Co- operative Society and the matter of controversy has remanded to the AO to verify the books of account and make requisite adjustment in the assessed income considering the assessee as a Society as per the provisions of the Act. The ambiguity in connection with PAN Number has been cleared. We find nothing wrong in the findings of Ld. CIT(A) in question. We are of the view that Ld. CIT(A) has decided the matter judiciously and correctly which is not liable to interfere with at this appellate stage, therefore these issues are in favour of the assessee which is not wrong. Accordingly, we affirm the finding of the CIT(A) on all the issues.

8.

In the net result, the appeal filed by the revenue stands dismissed.

Order pronounced on 27th July 2021 (Manoj Kumar Aggarwal) (Amarjit Singh) लेखा दस्य / Accountant Member न्यासयक दस्य / Judicial Member मुिंबई Mumbai; सदनािंक Dated : 27/07/2021 Sr.PS, Dhananjay

आदेशकीप्रधिधलधपअग्रेधर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT– concerned 5. सवभागीयप्रसतसनसध, आयकरअपीलीयअसधकरण, मुिंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File

आदेशाि सार/ BY ORDER,

उप/सहायक पुंजीकार (Dy./Asstt.

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