RAPID PROCESSORS PRIVATE LIMITED,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-3(1)(2) (OLD WARD- 3(1)(3)), AHMEDABAD

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ITA 1490/AHD/2024Status: DisposedITAT Ahmedabad19 February 2025AY 2017-18Bench: SHRI T.R. SENTHIL KUMAR (Judicial Member), SHRI MAKARAND V. MAHADEOKAR (Accountant Member)1 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) lacked jurisdiction to entertain the appeal because the assessment order was passed under one PAN (AADCR8817L) and the appeal was adjudicated under a different PAN (AACCR7250E). Therefore, the order of the CIT(A) was set aside.

What were the facts?

The Revenue appealed the deletion of an addition of Rs. 2,05,04,000/- made under Section 69A, while the assessee appealed the confirmation of an addition of Rs. 30,00,000/- under the same section. A significant issue arose regarding the assessee holding two different PANs, under which the assessment order and the CIT(A) appeal were processed.

What were the issues?

The primary issue was the CIT(A)'s jurisdiction to adjudicate an appeal when the assessee was found to be holding multiple PANs, and the assessment and appeal proceedings were conducted under different PANs.

Which sections of the Income-tax Act were involved?

Section 69A,Section 133(6),Section 139A(7),Section 272B,Section 143(2),Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI T.R. SENTHIL KUMAR & SHRI MAKARAND V. MAHADEOKAR

For Appellant: Shri Mahesh Chhajed, AR
Hearing: 18/02/2025Pronounced: 19/02/2025

Heard together (2 matters)

ITA No.1483/Ahd/2024
ITA No.1490/Ahd/2024

Read from the judgment's own cause title. This page is filed under one of them.

1.

Income Tax Officer 1. Rapid Processors Private बनाम/ Ward-3(1)(2) Limited v/s. Ahmedabad-380 015 C/o. M.S. Chhajed & Co. (Old) ITO, Wd-3(1)(3), CA, “Kamal Shanti” Ahmedabad Nr. Sardar Patel Statue Ahmedabad – 380 014 2. Rapid Processors Private 2. Income Tax Officer Limited C/o. M.S. Chhajed & Co. Ward-3(1)(2) CA, “Kamal Shanti” Ahmedabad-380 015 Nr. Sardar Patel Statue (Old) ITO, Wd-3(1)(3), Ahmedabad – 380 014 Ahmedabad "थायी लेखा सं./PAN: AACCR 7250 E (अपीलाथ$/ Appellants) (%& यथ$/ Respondents) Assessee by : Shri Mahesh Chhajed, AR Revenue by : Shri Kavan Libasiya, Sr.DR सुनवाई की तारीख/Date of Hearing : 18/02/2025 घोषणा की तारीख /Date of Pronouncement: 19/02/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM:

These cross-appeals filed by the Revenue and the Assessee are directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], (By Revenue) & Asst. Year : 2017-18 dated 20.06.2024, for the Assessment Year (AY) 2017-18. The Revenue has challenged the deletion of an addition of Rs.2,05,04,000/- made under Section 69A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), whereas the assessee has filed a cross appeal against the confirmation of an addition of Rs.30,00,000/- made by the Assessing Officer (hereinafter referred to as “AO”) under Section 69A of the Act.

2.

Following are the grounds of appeal(s) before us:

In Revenue’s appeal - -

(a) The Ld.CIT(A) has erred in law and on facts in deleting the addition on account of credit transaction reflected in bank account amounting to Rs.2,05,04,000/- treating as unexplained money u/s 69A of the Act ?

(b) The appellant craves leave to add, alter and /or to amend all or any the ground before the final hearing of the appeal.

1. The order passed by the Ld. CIT (A) is against law, equity and justice.

2. The CIT (A) has erred in law and on facts in considering the validity of assessment order passed by Ld. AO without issuing notice u/s 143(2) of the Act.

3.

The CIT (A) has erred in law and in considering the facts of invoking section 115BBE of the Act when transactions occurred prior to insertion of provision on statute.

4. The CIT (A) has erred in law and on facts in upholding the validity of order passed by Ld. AO without having jurisdiction and contrary to instruction of CBDT. (By Revenue) & Asst. Year : 2017-18 3 5. The CIT (A) has erred in law and on facts in upholding addition made by the Ld. A.O. u/s 69A of the Act of Rs.30,00,000/-.

6. The appellant Craves liberty to add, amends, alter or modify all or any grounds of appeal before final appeal.

3. During the course of hearing, it was observed that the AO passed the assessment order under PAN AADCR8817L, while the CIT(A) adjudicated the appeal under a different PAN AACCR7250E. Furthermore, the assessee filed Form 35 for the appeal before the CIT(A) under PAN AACCR7250E, which was not the PAN under which the assessment order was framed. This discrepancy raises a jurisdictional issue regarding the maintainability of the appeal before the CIT(A).

4.

The Departmental Representative (DR) agreed that the order passed by CIT(A) has certain jurisdictional issues. It was further pointed out that the assessee was aware of the fact that it holds two PANs, as it is evident from the reply received from the bank in response to notice issued under Section 133(6) of the Act. The bank provided the KYC details and copy of resolution, copy of PAN card (AADCR8817L) and copy of PAN cards of both the directors. The Authorized Representative (AR) of the assessee has admitted to assessee holding two PANs, which is a serious violation under the Act.

5.

As per Section 139A(7) of the Act, a person is prohibited from having more than one PAN, and any violation attracts penalties under Section 272B of the Act, which prescribes a fine of Rs.10,000/-. The existence of multiple PANs raises concerns regarding potential tax evasion, misrepresentation of financial transactions, and improper filing of tax returns. Further it is noted (By Revenue) & Asst. Year : 2017-18 that the assessee has admitted to holding two PANs, this matter requires verification of all related transactions. The AO did not have the opportunity to examine this aspect during the assessment proceedings being ex-parte order on account of non-cooperation by the assessee. Given this situation, it is imperative for the AO to take a consolidated view by verifying the banking transactions linked to both PANs and examining all bank accounts of the assessee to form a proper opinion.

5.1. Given that the assessment order was passed under PAN AADCR8817L, but the appeal was adjudicated under PAN AACCR7250E, the CIT(A) lacked jurisdiction to entertain the appeal. The order passed by the CIT(A) is, therefore, rendered invalid and is liable to be set aside.

5.2. In light of the above, the matter is restored to the file of the JAO for a fresh examination of all banking transactions under both PANs and to determine the implications of the assessee holding multiple PANs. The JAO shall verify all bank accounts linked to both PANs and ensure that a consolidated assessment is carried out in accordance with law.

5.3. The merits of the case are not being considered at this stage, as the jurisdictional issue itself warrants restoration to the JAO. The JAO shall grant the assessee a proper opportunity to present its case and provide necessary explanations.

5.4. In view of the above, the order of the CIT(A) is set aside, and the matter is restored to the JAO for fresh adjudication. (By Revenue) & Asst. Year : 2017-18

6.

In the result, the appeal of the Revenue and the appeal of the assessee both are allowed for statistical purposes.

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