NANDA FILLING STATION,SIRHIND vs. ITO, WARD, SIRHIND
आयकर अपील
य अ धकरण,चडीगढ़ यायपीठ , चडीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH
BENCH ‘B’ CHANDIGARH
BEFORE: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER
AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER,
आयकर अपील सं./ ITA No. 547/CHD/2022
नधारण वष / Assessment Year : 2017-18
थायी लेखा सं./PAN /TAN No: AAJFN2253R
अपीलाथ/Appellant
यथ/Respondent
नधारती क ओर से/Assessee by : Shri Manjit Singh Sarao, Advocate
राज व क ओर से/ Revenue by : Shri Shakti Singh, JCIT, Sr.DR
तार ख/Date of Hearing : 21.01.2025
उदघोषणा क तार ख/Date of Pronouncement : 06.02.2025
HYBRID HEARING
आदेश/ORDER
PER PARESH M. JOSHI, JM
This is an appeal filed by the assessee under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as the Act for sake of convenience and ease) before this Tribunal. The assessee is aggrieved by the order bearing
No.
ITBA/NFAC/S/250/2022-23/1042942025(1) dated
04.05.2022 passed by ld. CIT(A) under Section 250 of the Act. The relevant assessment year is 2017-18 and the ITA 547/CHD/2022
A.Y. 2017-18
2
corresponding previous year period is from 01.04.2016
to 31.03.2017. 2. Factual Matrix
2.1
On perusal of the record, it is noticed that there is a delay of 8 days in filing the appeal before the Tribunal. The assessee has filed an application praying for condonation of delay of 8 days in filing the application. Shri Satish Kumar Nanda, son of the deceased has filed an affidavit in support of the application. After considering the application and the affidavit, the delay of 8 days in filing the application before this Tribunal is condoned as there is sufficient cause. Appeal taken up for hearing.
2.2 The return of income for the assessment year
2017-18 was not filed by the assessee as one of the partners out of two of the firm called M/s Nanda Filling
Station having PAN No. AAJFN2253R namely late Shri
Krishan Chand Nanda had expired. Shri Satish Kumar
Nanda son of late Shri Krishan Chand Nanda was ITA 547/CHD/2022
A.Y. 2017-18
3
surviving partner. The assessee was a partnership firm with father and son being two partners. That upon the death of the partner, the status of the firm was converted into Sole Proprietorship firm. However, this fact was brought to the notice of the Bankers of the firm – State
Bank of Patiala/SBI by the surviving partner/ son Satish
Kumar Nanda. The Account No. 65151910059 in the SBOP/SBI remained the same even after the death of father/partner.
2.3 That on basis of information about deposit of Rs.1,24,20,000/- in this account, the ld. AO completed the assessment proceedings under Section 144(1)(b) of the Act and has made addition of Rs.1,24,20,000/- to the income of the firm.
2.4 No notice(s) as mentioned in the assessment order dated 01.12.2019 was/were ever delivered to the firm or to the surviving partner.
The Assessing
Officer completed the assessment proceedings ex-parte under Section 144(1)(b) of the Act.
ITA 547/CHD/2022
A.Y. 2017-18
4
5 That the assessee being aggrieved by the assessment order dated 01.12.2019 preferred first appeal before ld. CIT(A) under Section 246A of the Act and by impugned order, the ld. CIT(A) has dismissed the appeal. 2.6 That the assessee being aggrieved by the impugned order has filed the present appeal and has raised following grounds of appeal before us which are as under : 1. That the impugned order of the Ld. CIT (Appeals) in Appeal No. CIT(A) Patiala 10004/200-21 and order of ITO Ward-Sirhind is bad in law and against the facts of the case and have been passed without application of judicious mind and without appreciating the material on record. 2. That the Ld. CIT(A) erred in upholding the order of A.O. making addition of Rs. 1,24,20,000/- on account of alleged unexplained cash deposits in bank account No. 65151910059 with State Bank of India allegedly linked with PAN AAJFN2253R of the Partnership Firm which was dissolved upon the death of one of the two partners on 05.11.2013 and has failed to see that no return of income was filed against PAN AAJFN2253R of the Firm after AY 2013-14. 3. That the ld. CIT(A) and AO failed to verify that the bank account No.65151910059 with State Bank of India is actually linked with PAN AHZPK8303 of sole surviving business income from Nanda Filling Station. 4. That-Ld. AO and CIT(Appeals) failed to appreciate the law that assessment cannot be linked for the same cash deposits to two different PANs. 5. That the impugned order of the Ld. CIT (Appeals) and order of ITO Ward- Sirhind is liable to be set aside on consideration of the Grounds of Appeal. 3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 21.01.2025 when the ld. AR and ld. DR were ITA 547/CHD/2022 A.Y. 2017-18 5
heard at length in respect of their respective submissions. The ld. AR in sum and substance has contended that after the death of one of the two partners on 05.11.2013 the partnership firm stood dissolved and since then the bank account No. 65151910059 in SBOP/SBI is not linked with PAN No. AAJFN2253R which was PAN of erstwhile partnership firm and is linked with PAN
No.
AHZPK8303L linked to Bank
Account
No.65151910059. All cash transactions during the period of demonetization from 09.11.2016 to 31.12.2016
have been recorded in this bank account and all transactions with M/s Indian Oil Corporation (IOC)
Sangrur for purchase of petroleum products etc. and payment to IOC were routed through this bank account.
It was contended that a written submission before CIT(A),
Death Certificate of father/partner evidencing death on 05.11.2013, bank certificate dated
22.03.2022
evidencing that M/s Nanda Filling Station A/c No.
65151910059 is now being operated by Satish Kumar
Nanda in capacity as Sole Proprietor (Proprietorship) dated 26.12.2017 as per bank’s record, a letter dated
ITA 547/CHD/2022
A.Y. 2017-18
6
12.2017 to juri ictional AO evidencing surrender of PAN No. AAJFN2253R of the firm (a partnership) was w.e.f. Nov.,2013; copy of ITR for assessment year 2014- 15 in name of Satish Kumar were filed. It was contended that after the death of one of the partners on 05.11.2013 the partnership firm stood dissolved and since then, Bank Account No. 65151910059 in SBOP/SBI is not linked with PAN No. AAJFN2253 (PAN of erstwhile Partnership Firm) and is linked with PAN No. AHZPK8303L (PAN of surviving partner). No ITR of the firm has been filed since assessment year 2014-15 onwards and that Satish Kumar, surviving partner/son has been filing ITRs since assessment year 2014-15 in his individual capacity as sole proprietor of Nanda Filling Station under his own PAN No. AHZPK8303L which is linked to Bank Account No. 65151910059. That all cash transactions during the period of demonetization from 09.11.2016 to 31.12.2016 have been recorded in this bank account and that all the transactions with M/s Indian Oil Corporation, Sangrur for purchases of petroleum products etc. and payments to IOC were ITA 547/CHD/2022 A.Y. 2017-18 7
routed through this bank account. That in order to substantiate these submissions, the assessee prays to place on record of Tribunal following documents as and by way of “additional documents/evidence” :
1. ITR for AY 2014-15 with PAN AHZPK8303L linked to Bank Account No. 6515
1910 059. 2. ITR for AY 2015-16 with PAN AHZPK8303L linked to Bank Account No. 6515
1910 059. 3. ITR for AY 2016-17 with PAN AHZPK8303L linked to Bank Account No. 6515
1910 059. 4. Statement of Account of SBI No. 6515 1910 059
Sirhind Mandi from 08.11.2016 to 31.12.2016. 5. Statement of Account of M/S IOC Ltd., Sangrur from 08.11.2016 to 31.12.2016. The assessee has made application for filing of additional evidence dated 21.08.2024 in this regard.
3.2 The ld. DR has gone by the impugned order of CIT(A) and has interalia stated that in view of the fact that partnership firm originally was consisting of two partners [ father and son duo] and after death of one of the partner [father] on 05.11.2013, the said firm became
Sole Proprietorship firm of surviving partner [son]
liability if any of taxes is now the responsibility of surviving partner who incidentally happens to be son.
ITA 547/CHD/2022
A.Y. 2017-18
8
Hence, in so far as revenue is considered, it would not make any difference.
3.3 In rejoinder, the ld. AR submitted that these fresh material were crucial to determine the tax liability, if any of the assessee as transactions of M/s Nanda Filling
Stations are recorded in bank statement of SBI which bears PA N number of assessee [son] since 2014-15 and necessary material in support thereof are now placed on record. Assessment cannot be linked to for same cash transactions to two different PANs. Further the surviving partner has not concealed the transactions of deposit of Rs.1,24,20,000/- and has shown the same in his books of account and filed return of income for relevant year and in respect thereof no findings are given by CIT(A).
The firm is not in existence since 05.11.2013 and hence the firm filed no return of income after dissolution of partnership firm. That no notice under Section 142(1) of the Act was received by the firm or surviving partner.
The Department of Income Tax failed to verify that firm’s
PAN No. AAJFN2253R after the death of partner [father]
ITA 547/CHD/2022
A.Y. 2017-18
9
was not linked with any bank account. They did not verify that bank statement of SBI is linked to son
[surviving partner]
PAN
No.
AHZPK8303L of sole proprietor Satish Kumar.
4. Observations,Findings &
Conclusions
1 We now have to decide the legality, validity and proprietary of the impugned order basis records of the case. 4.2 We observe that the original assessment order dated 01.12.2019 is an ex-parte order and that the same is under Section 144 of the Act. In first appeal, this original assessment order dated 01.12.2019 was challenged primarily on ground of violation of the principles of natural justice. In addition, it was contended that by a letter dated 26.12.2017 addressed to Department, that partnership firm and its PAN number does not survive as one of the partner is no more since 05.11.2013 and hence the firm has not filed the return of income. The ld. CIT(A) in the impugned order has ITA 547/CHD/2022 A.Y. 2017-18 10
observed that there are huge cash deposits to the extent of Rs.14,17,64,000/- during pre and post demonetization period during the Financial Year 2016-17 [A.Y. 2017-18].
It is also found that during the demonetization period between 09.11.2016 to 31.12.2016 a huge sum of Rs.1,24,20,000/- had been deposited in assessee's bank account. The information was received by the ld. AO and accordingly notices were issued by the ld. AO to PAN in which aforesaid cash deposits have been made. The assessee has not brought on record that due procedure has been followed with the Assistant.