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Facts
The assessee, an HUF, faced an addition by the AO for 20% of cash deposits in a bank account during demonetization, which was sustained by the CIT(A). The assessee argues that the bank account, despite a PAN error at the time of opening, actually belongs to Anil Kumar in his individual capacity and not the HUF.
Held
The Tribunal found an inherent error in the assessment proceedings as the addition was based on a wrong fact about the real identity of the bank accountholder. It restored the matter to the AO for fresh adjudication on merits, providing the assessee an opportunity of hearing.
Key Issues
Whether the bank account, subject to addition, belongs to the assessee HUF or Anil Kumar in his individual capacity due to a PAN card error at account opening.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, DELHI BENCHES : A : NEW DELHI
Before: SHRI G.S. PANNU, HON’BLE & SHRI ANUBHAV SHARMA
ORDER
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the Assessee against the order dated 06.06.2023 of the Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No.CIT(A), Delhi-17/10218/2018-19 arising out of the appeal before it against the order dated 20.12.2018, passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ITO, Ward-49(1), Delhi (hereinafter referred to as the Ld. AO).
Heard and perused the record. The assessee, as HUF, has filed return of income declaring an income of Rs.2,45,000/- and the case of the assessee was selected for scrutiny under CASS for the reason of cash deposit during demonetization period and the ld. AO, on the basis of notices issued and replies filed, had made an addition to the extent of 20% out of total credit entries of Rs.2,42,63,815/- in bank account No.912020020658201 in the name of M/s Ravi Devi Enterprises. The ld.CIT(A) has also sustained the addition.
As, before us, the ld. AR canvassed that in fact, this account is not the account of the assessee, Anil Kumar, HUF, but, this bank account is held by Anil Kumar in his individual capacity. It was submitted that inadvertently, at the time of opening of the bank account, PAN Card No.AAFHA2224P was mentioned which is of Anil Kumar, HUF. The ld. AR has placed on record a copy of PAN card of Anil Kumar, individual bearing No.AGGBK2735C. It is also submitted that Anil Kumar, in his individual capacity, has also filed return where this account was disclosed. The ld. DR, however, submitted that before the ld. tax authorities below, these facts were not asserted and there is no specific ground before us also in that regard.
After taking into consideration the grounds as raised, we are of the considered view that there is an inherent error in the assessment proceedings which have been initiated against the present appellant, Shri Anil Kumar, HUF, in regard to an account which is in the name of M/s Ravi Devi Enterprises and 2 the proprietor of the same is Anil Kumar, individual. Whatever error has crept into the bank account leading to scrutiny assessment and the addition are based on a wrong fact about the real identity of the bank accountholder.
In the light of the aforesaid, we consider it an appropriate case to restore the issue on merits to the ld. AO. The ld. AO shall give an opportunity of hearing to the assessee and pass a fresh order on merits. Consequently, the appeal is allowed for statistical purposes.