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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Sanjay Arora & Shri Aby T.Varkey
O R D E R Per: Sanjay Arora, AM This is an Appeal by the Assessee directed against the Order by the National Faceless Appeal Centre, Delhi (‘CIT(A)’ for short) dated 16.3.2022, dismissing the assessee’s appeal contesting it’s assessment under section 143(3) read with sec. 144B of the Income Tax Act, 1961 (‘the Act’ hereinafter) dated 13.4.2021 for Assessment Year (AY) 2018-19.
The assessee, a society by the name Pushpagiri Medical Society, is running a 800 bedded hospital (by the name Pushpagiri Hospital) and 5 medical institutions. It is registered both under section 10(23C) and sec. 12A of the Act. For the year under reference it returned nil income, and was assessed thereat, even as the return was selected for complete scrutiny on three parameters, including the claim of refund for Rs. 169.34lacs. The computation sheet forming part of the 1 Pushpagiri Medical Soceity v. Asst. CIT assessment order, to which reference is made at para 4 thereof, however, determined a demand of Rs. 87.99 cr. on an ‘assessed’ income of Rs.179.30 cr. This was clearly anomalous in view of the assessment being at nil income. The assessee moved a rectification application on 20.4.2021, seeking rectification in respect of the assessed income and, consequently, tax liability. The same was rectified vide order u/s. 154 of the Act dated 18.11.2021, even as credit for tax deducted at source (TDS) and, consequently, the refund thereof, was allowed only at rs. 19.95 lakhs. The assessee had in the meanwhile (on 13.5.2021) also preferred an appeal before the ld. CIT(A), i.e., against it’s assessment dated 13/4/2021, seeking, apart from deletion of the disallowance of revenue expenditure (rs. 178.49 cr.) and addition under the head of income from other sources (rs. 80.64 lacs), aggregating to Rs.179.30 cr., inadvertently made in the computation-sheet afore- referred, credit for TDS and tax collected at source (TCS) at Rs. 167.89 lacs and Rs.1.45 lacs respectively. The non-credit of TDS and TCS, as it transpires, was due to the same having been deducted and, as the case may be, collected under a different PAN, i.e., AACAP 7197G (obtained under the name Pushpagiri Medical Society on 25.11.2013), while the return filed and the income assessed was under PAN: AAATP2418H in the name of Pushpagiri Hospital. It is the latter PAN for which the assessee had registration u/ss.10(23C) and 12A of the Act, and not the former, so that no refund of the balance, arising under a different PAN, could be allowed. Aggrieved, assessee is in second appeal.
We have considered the rival contentions and perused the material of record. 3.1 The only issue that survives the rectification order dated 18.11.2021 computing the assessee’s total income for the relevant year at nil, is whether the assessee, i.e., Pushpagiri Medical Society (PMS), assessed to tax under PAN: AAATP2418H, is entitled to refund of TDS and TCS reflected under PAN: AACAP7197G (in the name of Pushpagiri Hospital (PH)), even as the corresponding income stands returned and assessed under the former PAN, which Page 2 Pushpagiri Medical Soceity v. Asst. CIT is registered both u/s. 10(23C) and u/s. 12A of the Act. We see no reason why it should be regarded as not so. True, the identity of an assessee under the Act is as per PAN (Pr. CIT v. I-Ven Interactive Ltd. [2019] 418 ITR662 (SC)) and an assessee having two PANs is itself a contradiction in terms. As explained by Shri Abraham K. Thomas, the ld. counsel for the assessee, even as there is nothing on record to bear that out, the assessee’s applicaton for name correction in the said PAN (AAATP2418H), i.e., from PH to PMS, was rejected, and which led to it applying for a new PAN in it’s correct name, i.e., PMS. The same is definitely without any basis in law, and the assessee ought to have pursued the matter of name correctionwith the Revenue further. If the assessee is for that reason liable for penalty u/s. 272B, i.e., for applying for two PANs, as the ld. CIT(A) states, so be it, even as penalty matters are governed pincipally by the existence or otherwise of bona fides. That, however, is no reason to perpetuate an error, and would not detain us. Why, as we see it, Revenue itself is in wrong in issuing PAN in an incorrect name (i.e., PH), even as assessee’s name as per its constituting document would only be it’s correct name, i.e., PMS. It cannot be otherwise, also apparent from the fact of the issue of PAN subsequently in that name.
3.2 The only aspect(s) therefore that needs to be verified in the matter is: (a) whether, as contended, the two PANs represent the same person; and (b) whether the income in respect of which TDS and TCS stands deposited with the Central Government, stands duly accounted for and returned by the assessee.
The assessee has toward this been in fact issued a certificate dated 23/12/2022 by the assessing authority, to which reference was drawn during hearing, clarifying this beyond any doubt, as also of the surrender of additional PAN (AAACAP 7197G) being under process. As explained by Shri Thomas, the said PAN stands since surrendered as well as the name corrected, substituting it’s correct name in that PAN (AAATP2418H). This in fact is precisely what was needed to be done in the first place. The issue arising in the instant case is thus much ado about nothing. Page 3 Pushpagiri Medical Soceity v. Asst. CIT This, rather, is precisely what one expects the Revenue to do (refer Board Circular14 XL-35, dated 11/4/955), rather than compounding the assessee’s error, if not capitalizing thereon by rejecting it’s application for name correction. And, rather, ought to have been insisted upon by both, the assessee as well as the Revenue, at the first appellate stage, i.e., surrender of one PAN and effecting name correction in the other, bringing the matter in conformity with law, as also in keeping with the spirit with which the Act is to be administered, besides being the clear mandate of section 237 of the Act. One is also reminded of the observations by the Apex Court in Pannalal Binjraj vs. Union of India AIR 1957 SC 397, holding as: ‘A humane and considerate administration of the relevant provisions of the Income Tax Act would go a long way in allaying the apprehensions of the assesses, and if that is done in the true spirit, no assessee will be in a position to charge the Revenue with administering the provisions of the Act with “an evil eye and unequal hand”.’ We are conscious, we may add, that it could well be argued that no appeal lies against refusal of refund u/s.237 of the Act. However, as would be seen, the same follows the order u/s. 143(3) of the Act read with the computation sheet. The said sheet is an integral part of the assessment order (Kalyankumar Ray v. CIT [1991] 191 ITR 634 (SC)), so that the appeal is in effect in respect of the assessment u/s. 143(3) of the Act, an appealable order u/s. 246A of the Act. The exercise of reconciliation of the two sets of figures, i.e., under the two PANs, with the assessee’s return, has been undertaken through the proceedings under section 148A dated 31/3/2022 (copy on record). This obviates the necessity to restore the matter to the Assessing Officer (AO) to ascertain the same inasmuch as it is only on the income subject to tax deduction or collection at source being duly returned, that refund in its respect could follow.
The assessee is accordingly entitled to refund of TDS and TCS under the second PAN (i.e., AACAP 7197G). Though the assessed return refers to these Page 4 Pushpagiri Medical Soceity v. Asst. CIT figures at Rs. 167.89 lacs and Rs. 1.45 lacs respectively for TDS & TCS, we do not consider it proper to specify the amounts in the absence of any definite finding by any authority in the matter, and the same would be as per record. The assessee would be entitled to this refund as per law, which it be allowed forthwith. Further, though we observe assessee to have been granted a refund of TDS (under PAN AAATP2418H) at rs. 19,95,300 as against the claimed sum of rs. 19,97,455, the said issue was raised by the assessee neither before the first appellate authority nor before us. We, therefore, do not consider it proper to issue any finding or direcion in its respect. We direct accordingly.
In the result, the assessee’s appeal is allowed. Order pronounced on June 16, 2023 under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963