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Facts
The assessee, a cooperative milk society, had two PAN numbers. For one PAN (AAAAT1779L), no return was filed, but substantial deposits were made. For the other PAN (AAAAT2139G), a return was filed late, declaring a much smaller income and claiming deductions. The AO reopened assessment for the non-filing PAN and made an ex-parte addition.
Held
The Tribunal noted that the assessee had two PANs, failed to surrender one, and did not respond to notices, leading to an ex-parte assessment. While the CIT(A) upheld the addition, the Tribunal decided to set aside the matter to the AO for fresh assessment, allowing the assessee to furnish additional documents and considering the penalty for multiple PANs.
Key Issues
Whether the ex-parte assessment order and additions made by the AO are sustainable when the assessee claims to have two PAN numbers and furnished returns for one, and whether the CIT(A) erred in not allowing deductions and additional evidence.
Sections Cited
147, 144, 148, 142(1), 46A, 80P, 272B, 69, 115BBE, 80P(1)(b)
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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: DR. BRR KUMAR & Shri T.R. SENTHIL KUMAR
: 1555 & 1556/Ahd/2024 Assessment Years: 2018-19 & 2019-20 The Thavar Dudh ACIT/DCIT Utpadak Sahkari Circle-Gandhinagar, Mandli Limited Vs Gandhinagar-382011 At & PO. Thavar Tal. Dhanera, Dist. Banaskantha- 385535 PAN: AAAAT1779L (Respondent) (Appellant) Assessee Represented: Shri S.N. Divatia, A.R. & Shri Samir Vora, A.R. Revenue Represented: Shri Rignesh Das, Sr.D.R. Date of hearing : 23-01-2025 Date of pronouncement : 20-02-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
These two appeals are filed by the Assessee as against two separate appellate orders both dated 31.07.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment orders passed under section 147 r.w.s. 144 of the &1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 2 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2018-19 and 2019-20.
Brief facts of the case is that the assessee is a Co-operative Society situated at interior part of Banaskantha District of Gujarat engaged in the business of supplying Milk. Since as per the Department records, the assessee has not filed Return of Income with the PAN No: AAAAT1779L, but deposited Rs. 1,64,93,922/- in Dhanera Mercantile Co-operative Bank Ltd. and TDS amount of Rs. 11,869/- from Uttar Gujarat Vij Company Ltd. both totaling Rs. 1,65,05,791/-. Hence the assessment was reopened by issuing a notice u/s. 148 of the Act. The assessee has not responded to the above notice as well as the notices issued u/s. 142(1) by the Faceless Assessing Officer, which has resulted in passing exparte assessment order assessing the total income as Rs.1,65,05,791/- and demanding tax thereon.
Aggrieved against the exparte order, assessee filed an appeal before Ld. CIT(A) wherein it was explained that the assessee is having two Pan Numbers: (i) AAAAT2139G (ii) AAAAT1779G 3.1. Whereas the assessee regularly filing Return of Income in PAN Number 1 wherein income of Rs. 11,53,426/- was declared and claimed deduction u/s. 80P(1)(b) of the Act and claiming Nil income for the Asst. Year 2018-19. Whereas the assessee has shown the Second PAN Number in the bank accounts, whereby the Assessing Officer held that no Return of Income filed by the assessee for the &1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 3 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT very same Asst. Year 2018-19. When the exparte order was received by the assessee by Post, the assessee filed appeal with the delay of 110 days. The assessee also filed various details of deposits in the bank by invoking Rule 46A of the I.T. Rules. The Ld. CIT(A) condoned the delay in filing the appeal, however not entertained application u/s. 46A of the Rules, since the assessee failed to file the same before the Assessing Officer, thereby rejected the claim of the assessee and upheld the addition made by the Assessing Officer by observing as follows: “…..vi. From the submissions of the appellant assessee this Appellate authority has noted that appellant society was having two PAN numbers as per details below: a. First Pan AAAAT1779L which is updated in bank details of the appellant assessee wherein assessee is doing all the transactions. Thus it can be said that appellant assessee society is doing all the business with this PAN, but appellant assessee has not filed any return of income against this PAN. b. The Appellant assessee society has taken another PAN i.e. AAAAT2139G. The assessee has claimed to file its ITR somehow against this PAN. vii. But this fact was not brought to the notice of the AD during the course of Assessment proceedings and the appellant assessee has not produced any ITR and Audit report of any other submissions to the Assessing officer. viii. However, the appellant assessee has provided a copy of ITR audited profit and loss account and balance sheet file against PAN i.e. AAAAT2139G. It is noted that the audited P&L account and Balance sheet are dated 14.06 20218 with signature of the Chartered account, but the appellant assessee have not signed these documents. Further, it is noted that the appellant assessee has filed its ITR on 29.10.2015 which is after the due date of filing the return. As a necessary condition to be fulfilled for claiming deduction u/s 80P of the Act, the ITR should be filed on or before the due date of submissions of ITR.
&1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 4 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT ix. In the light of above facts provided at point no (vi) above, this Appellate authority finds the contention of the appellant assessee baseless as the appellant society is doing business with banking transactions against one PAN and filling the return against another PAN This Appellate authority is in the view that if the appellant assessee has 2 PAN’s registered then the appellant assessee has to follow the provisions of surrendering one of the PAN if the person comp. failed to surrender the PAN then a penalty of Rs 10.000/- is to be imposed under section 272B of the income-tax Act 1961 for having more than one PAN and in the present case the appellant assessee has not surrendered the other PAN till the time of assessment proceedings. x. This Appellate Authority has noted that, the assessment order was passed dated 28.03 2023 and the appellant assessee has filed an appeal against the assessment order on 18.08.2023 and the appellant assessee along with its submissions has also filed an application seeking condonation of delay which have been considered by this Appellate Authority in favor of natural justice. The ground no -4 is accepted. ………………….. xiii. The appellant assessee has also stated that "The appellant has not furnished any reply because the notices were issued under the Pan No. AAAAT 1779L however, the appellant has filed the return under the Pan No. AAAAT2139G. The bank also used the Pan No AAAAT1779L and therefore the reason of late submission arised but there is no mala fide intention of the appellant for not to furnish the details of the Time Deposit and to avoid the lax The above mentioned contention of the appellant assessee is not tenable in the eyes of the Appellate authority because from the ITR filed under PAN AAAAT2139G and the order which was passed under PAN AAAAT1779L, have the same address and it is also pertinent to mention here that the appellant assessee itself has stated in its submissions that both the PAN's belong to the appellant assessee and it is very much clear that the appellant assessee has got the notices delivered to its working address and still the appellant assessee chooses not to respond to any of the notices sent by the Assessing officer, it means that the appellant assesse intentionally did not reply to the notices sent by the Assessing officer. Thus, the contentions of the appellant assessee are hereby rejected &1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 5 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT xiv. The appellant assessee along with its submissions to this Appellate authority has provided documentary additional evidences as the same were not provided during the course of assessment proceedings. But the appellant assessee has not filed any application under Rule 46A of the Income-tax rules for filing of additional documents before this Appellate authority. …………………… In the light of above facts and discussions at point no.-(i) to (xvi), no Application under Rule 46A of the Income-tax rules or such justification or affidavit to prove its bona-fide error and completely negligent behaviour of the appellant assessee during the course of assessment proceedings, this Appellate authority is in the view that, the appeal of the appellant assessee is untenable and liable to be rejected. Thus, the addition made by the Assessing officer amounting to Rs 1,65,05,791/ u/s 69 of the Income-Tax Act 1961 is correct and is thus UPHELD. The ground no.-1 to 3 & 5 are rejected. The ground no.-6 is general and hence not adjudicated upon. In the result, the appeal is PARTLY ALLOWED.”
Aggrieved against the same, the assessee is in appeal before us in raising the following Grounds of Appeal: [1] The Ld. CIT(A), NFAC, Delhi, was grievously erred in upholding the addition u/s.69 of the IT Act amounting to Rs. 1,65,05,791/- being the gross amount of Time Deposit which is quite wrong and illegal. It is submitted that the Appellate Authority has not given the justice to the reply in respect of sources of deposit which is unjustifiable. [2] The Ld. CIT(A), NFAC, Delhi was also grievously erred in not giving the statutory deduction u/s. 80P(1)(b) of the Act which categorically states that for the Milk Society, total income is deductible under this provision. [3] The Ld. CIT(A) was also grievously erred in upholding the addition u/s. 69 of the Act which is illegal. The money is explained and entries are made in the Balance Sheet and deposited in Bank.
&1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 6 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT
[4] The appellant therefore requests your goodself to kindly delete the above mentioned addition made by the Ld. A.O. of Rs. 1,65,05,791/-by upholding the same by Ld. CIT (A), looking to the merits of the case. [6] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
5. Ld. Counsel Shri S.N. Divetia appearing for the assessee submitted that the assessee being a small cooperative milk society are not the aware of the technicalities, e-filing compliance, the Manager and Members of the society because of their illiteracy and non-English language. However during appellate proceedings, the assessee furnished detailed reply of the source of deposit which was not entertained by the Ld. CIT(A) and nor called for any Remand Report from the Assessing Officer. Therefore in the interest of Principal of Natural Justice, the matter may be set aside to the file of Jurisdictional Assessing Officer for fresh assessment.
Per contra Ld. Sr. D.R. Shri Rignesh Das appearing for the Revenue submitted that the assessee was maintaining two PAN Numbers and filed the Return with the first PAN Number. But in the second PAN Number was given to the bank, where no return has been filed by the assessee. Since assessee had two different PAN Numbers with same address, heavy cost may be imposed to set aside the assessment to the file of Jurisdictional Assessing Officer.
We have given our thoughtful consideration and perused the materials available on record. It is undisputed fact that the assessee was having two PAN Numbers with first PAN Number &1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 7 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT wherein regular Return of Income was filed on 29-10-2018, after the due date and claimed deduction u/s. 80P of the Act. As against the second PAN Number, no Return of Income was filed but PAN was given to the bank authorities. Since the assessee has not filed any return of income in the second PAN Number, the assessing officer reopened the assessment being a non-filer of Return of Income and also for escaped income. However the assessee claims that it has offered to tax the above deposits made in the bank account in the Return of Income filed with the first PAN Number AAAAT2139G.
7.1. Further when the assessee has two different PAN Numbers, there is a self-contained mechanism available u/s. 272B of the Act and if the assessee failed to surrender the second PAN, the A.O. is empowered to levy penalty of Rs. 10,000/- for the default. Though Ld. CIT(A) condoned the delay of 110 days in filing the above appeal but refused to admit the documents produced invoking Rule 46A of the I.T. Rules only on the ground that the same were not filed before the Assessing Officer.
7.2. Therefore in the above circumstances and in the interest of Principle of Natural Justice, we deem it fit to set aside the matter back to the file of Jurisdictional Assessing Officer to verify the additional documents filed by the Assessee and pass fresh order in accordance with law and also impose penalty u/s. 272B of the Act for having two PAN Numbers by the assessee in manner known to law and by giving proper opportunity of hearing to the assessee.
&1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 8 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT
Needless to say, the assessee should co-operate by filing all the additional documents filed under Rule 46A before the Jurisdictional Assessing Officer for passing fresh reassessment order on merits of the case.
In the result, the appeal filed by the assessee in is allowed for statistical purpose.
The Grounds of Appeal raised by the Assessee in A.Y. 2019-20 reads as under: [1] The Ld. CIT(A), NFAC, Delhi, was grievously erred in upholding the addition u/s.69A r.w.s. 115BBE of the IT Act amounting to Rs. 54,35,351/- being the gross amount of Time Deposit which is quite wrong and illegal. It is submitted that the Appellate Authority has not given the justice to the reply in respect of sources of deposit which is unjustifiable. [2] The Ld. CIT(A), NFAC, Delhi was also grievously erred in not giving the statutory deduction u/s. 80P(1)(b) of the Act which categorically states that for the Milk Society, total income is deductible under this provision. [3] The Ld. CIT(A) was also grievously erred in upholding the addition u/s. 69 of the Act which is illegal. The money is explained and entries are made in the Balance Sheet and deposited in Bank. [4] The appellant therefore requests your goodself to kindly delete the above mentioned addition made by the Ld. A.O. of Rs. 54,35,351/- by upholding the same by Ld. CIT (A), looking to the merits of the case. [6] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal
at the time of or before the hearing of the appeal.
11. Here also the facts are identical with that of Asst. Year 2018-19 in ITA No. 1555/Ahd/2024. Therefore the present reassessment &1556/Ahd/2024 A.Ys. 2018-19 & 2019-20 Page No 9 The Thavar Dudh Utpadak Sahkari Mandli Ltd. vs. ACIT/DCIT order is also set aside to the file of Jurisdictional Assessing Officer to pass fresh order in the manner known to law by giving opportunity of hearing to the assessee.
Order pronounced in the open court on 20 -02-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 20/02/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद