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Facts
Akhil Mittal & Co. filed an ITR for AY 2016-17, declaring income of Rs. 4 lakhs, which resulted in a demand under Section 143(1) of the Act. Subsequently, A NS K and Associates, who took over Akhil Mittal & Co.'s professional work, challenged this demand, asserting they neither existed nor filed an ITR for that period, despite their PAN being used in the ITR filing. Their application under Section 154 and subsequent appeal to the CIT(A) were rejected, leading to the present appeal before the Tribunal.
Held
The Tribunal identified a 'technical error' where the appellant's PAN (ABFFA0879F) was utilized to file the ITR of Akhil Mittal & Co., leading to a mismatch between the taxpayer name and the PAN. The Tribunal held that the CPC-ITR cannot process an ITR without a valid filing and, refraining from commenting on the merits of taxability, restored the matter to the Assessing Officer for fresh adjudication. The AO is directed to pass a fresh order after granting the appellant a reasonable opportunity of being heard and collecting necessary details from the CPC-ITR.
Key Issues
Whether an income tax demand raised under Section 143(1) and sustained under Section 154 is valid against an assessee whose PAN was used for filing an ITR by another entity, due to a technical mismatch between the PAN and the taxpayer name, especially when the assessee claims not to have filed the ITR or been in existence during the relevant period.
Sections Cited
Section 143(1) of the Income Tax Act, 1961, Section 154 of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘A : NEW DELHI
Before: MS. MADHUMITA ROY & SHRI AVDHESH KUMAR MISHRA
Appellant by Sh. Tanpreet Kohli, CA Respondent by Sh. Kanv Bali, Sr. DR Date of Hearing 21/05/2024 Date of Pronouncement 31/05/2024 ORDER
PER AVDHESH KUMAR MISHRA, AM:
This appeal preferred by A N S K and Associates, PAN: ABFFA0879F, a Chartered Accountant Firm, is for the Assessment Year [In short, the ‘AY’] 2016-17. Vide this appeal, A N S K and Associates has challenged the order dated 19.05.2023, of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, New Delhi [In short, the ‘CIT(A)’].
The sole issue we are tasked to decide here is that whether the assessed income of Akhil Mittal & Co., PAN: ABFFA0879F, as per the Income Tax Return (ITR) filed on 30.03.2018, under section 143(1) of the Income Tax Act, 1961 [In short, the ‘Act’] and sustained in rectification order passed under section 154 of the Act belonged to A N S K and Associates when the appellant/assessee had not filed any ITR as it was not existing during the relevant year.
The relevant facts giving rise to this appeal, in brief, are that Akhil Mittal & Co., a Chartered Accountant Firm, filed its ITR, on 30.03.2018, on the Income Tax Portal, declaring income of Rs.4,00,000/- (Rs.2,50,000/- under the head income from house property and Rs.1,50,000/- under the head business & profession). However, Akhil Mittal & Co. had not paid any tax and or interest on its income declared in its ITR. The said ITR was processed under section 143(1) of the Act raising demand of Rs.1,78,969/- on Akhil Mittal & Co. Later, another Chartered Accountant Firm; namely, A N S K and Associates took over the professional work of the erstwhile Chartered Accountant Firm; namely, Akhil Mittal & Co. Aggrieved, with the processing of the ITR of Akhil Mittal & Co., the appellant/assessee; namely, A N S K and Associates filed an application under section 154 of the Act, which was rejected. Thereafter, an appeal against the order passed under section under section 154 of the Act was filed before the CIT(A), who dismissed the appeal, which, vide this appeal, was further challenged before the Tribunal.
The Ld. AR contended that the appellant/assessee had never filed any ITR for the relevant year as it was neither inexistence nor earned any taxable income during the relevant year. Hence, raising of demand in the case of the appellant/assessee; PAN: ABFFA0879F, in absence of any ITR filed by it was claimed unjustified and prayed for the deletion of the demand.
At the outset, the Ld. Sr. DR submitted that CPC would not process any ITR under section 143(1) of the Act unless the same was not filed. It was further submitted that the ITR declaring income of Rs.4,00,000/- was filed on 30.03.2018 on the Income Tax Portal by Akhil Mittal & Co., PAN: ABFFA0879F. Mr. Akhil Mittal, CA was the key person/ proprietor/partner of Akhil Mittal & Co. and A N S K and Associates. Without logging on the Income Tax Portal with User ID and Password, the filing of the ITR could not be done as the login on the portal is always linked with the PAN. In case the PAN of the appellant/assessee was used to file the ITR of Akhil Mittal & Co. (Mr. Akhil Mittal, CA was the key person/ proprietor/partner of Akhil Mittal & Co. and A N S K and 3 Associates), it did not invalidate the ITR of Akhil Mittal & Co. The Ld. Sr. DR contended that the order passed under section 143(1) of the Act was not challenged in appeal before the CIT(A). Hence, it attained the finality. Later, the order passed under section 154 of the Act, which was not against the appellant/assessee was challenged in appeal though the appellant/assessee had no locus standi to file this appeal before any Appellate Authority. Hence, he prayed for dismissal of appeal. He further contended that the ITR would have also been verified by the authorized person. The Ld. Sr. DR also contended that the appellant/assessee had not claimed that Akhil Mittal & Co. might have mentioned the wrong PAN while filing the ITR of the relevant year.
We have heard both the parties at length and perused the material available on the record. We are surprised to see such case; where the PAN: ABFFA0879F belonging to the appellant/assessee along with its User ID and Password were used for filing the ITR of Akhil Mittal & Co. We are of the considered view that the CPC-ITR cannot process/pass order under section 143(1) of the Act in any case unless there is no valid ITR. Mentioning of the PAN: ABFFA0879F belonging to the appellant/assessee in the order passed under section 143(1) of the Act in the case of Akhil Mittal & Co., a technical error does not entitle the appellant/assessee to file appeal for deletion of the demand in the case of Akhil Mittal & Co. at most, it may be a grievance of the appellant/assessee for deletion of its PAN from the order passed under section 143(1) of the Act in the case of Akhil Mittal & Co. Therefore, we are refraining to give any finding on the issue of taxability of Rs.4,00,000/- income in the case of Akhil Mittal & Co. on the simple reasoning that the order passed under section 143(1) of the Act is in the case of Akhil Mittal & Co. wherein PAN of the appellant/assessee got wrongly mentioned in absence of the facts revealed from the audit trail of filing of the ITR (IP address of the computer/laptop used for filing ITR and its verification of the ITR through Aadhar OTP or digital signature) brought on record.
There seems some technical error and that is why there is mismatch in name of tax payer and PAN. The ITR of other person cannot be filed on the Income Tax Portal/CPC-ITR by logging through the PAN of some other person. It might be there that the said PAN was earlier owned Akhil Mittal & Co. and later by the appellant/assessee.
In view of the above observations and in the interest of justice, we are of the considered view that the appellant/assessee deserves reasonable opportunity of being heard. In view thereof, 5 without offering any comment on merit of the case we deem it fit to restore the matter back to the file of the AO for passing the order afresh after providing reasonable opportunities of being heard to the appellant/assessee and gathering basic details from the CPC-ITR before deciding the case on merit.
In the result, appeal of the assessee is partly allowed as above. Order pronounced in open Court on 31st May, 2024.