@ Dilip Kumar Shah v. Principal Chief Commissioner Of Income Tax, Income Tax Departmentpatna, Bihar, 1St Floor, Central Revenue Building, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.2292 of 2023 ====================================================== Bright Educational And Welfare Society through its Secretary, Dilip Kumar @ Dilip Kumar Shah. ... ... Petitioner/s Versus 1.Principal Chief Commissioner of Income Tax, Income Tax DepartmentPatna, Bihar, 1st Floor, Central Revenue Building, Patna- 800001.Patna, Bihar, 1st Floor, Central Revenue Building, Patna- 800001. 2.Principal Commissioner Income Tax- 01, Central Revenue Building, Patna-800001.800001. 3.Commissioner of Income Tax, Exemption, Central Revenue Building, Patna-800001.800001. 4.Income Tax Officer, Exemption Ward- 01, Patna, Central Revenue Building,Patna- 800001.Patna- 800001. 5.Assistant Director, System, Income Tax Office, Central Revenue Building,Patna- 800001.Patna- 800001. 6.Assistant Commissioner Income Tax/Deputy Commissioner Income Tax,Circle- 01, Patna, under Principal Commissioner, Patna Loknayak Bhawan,Dak Bungalow Road, Patna- 800001.Circle- 01, Patna, under Principal Commissioner, Patna Loknayak Bhawan,Dak Bungalow Road, Patna- 800001. ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s: Mr. Ravi Shankar, Advocate Mr. Praveer Kumar, Advocate For the Respondent/s: Mrs. Archana Sinha, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 04-05-2023 The petitioner in the above writ petition is aggrievedwith the assessment made against the petitioner and therevisional order passed. The learned counsel for the petitionerargues that the petitioner is a registered society having been soregistered on 10.09.2004 and applied for a Permanent AccountNumber (hereinafter referred to as “PAN”) with the Income TaxDepartment, as a charitable educational institution. The IncomeTax Department allotted PAN No. , on which thepetitioner had been filing returns regularly. Later, when thedepartment commenced online mode of filing returns, thepetitioner could not upload the returns online as an Associationof Persons (hereinafter referred to as “AOP”). On inquiry it wasfound that the petitioner was issued with a wrong PAN No. as afirm and not as an AOP. It is also submitted that the departmentrealizing the mistake asked the petitioner to file a de novoapplication for PAN upon which the petitioner was issued withPAN No. as an AOP in the Assessment Year(hereinafter referred to as “AY”), 2017-2018. The petitionerclaims that two different Assessing Officers made assessmentagainst him which are dated 28.03.2019, 04.10.2019 and28.03.2023. One of the assessments was made as an AOP but on the ground that the bank account maintained was disclosed as anaccount of the firm relatable to the earlier PAN number issued,an assessment was made under that earlier PAN number, whichis challenged in the present proceedings. The learned Senior Counsel for the Income TaxDepartment, however, points out that the assessee had earlierregistered as a firm and the said firm had subsequentlyregistered as an AOP with a Certification of Exemption obtainedunder Section 12 AA of the Income Tax Act, 1961. The attemptin change of the registration was only to get the benefit of acharitable institution. the ground that the bank account maintained was disclosed as anaccount of the firm relatable to the earlier PAN number issued,an assessment was made under that earlier PAN number, whichis challenged in the present proceedings. The learned Senior Counsel for the Income TaxDepartment, however, points out that the assessee had earlierregistered as a firm and the said firm had subsequentlyregistered as an AOP with a Certification of Exemption obtainedunder Section 12 AA of the Income Tax Act, 1961. The attemptin change of the registration was only to get the benefit of acharitable institution. We have gone through the records of the case. Theassessee in the writ petition specifically states that they hadapplied for initial registration under the Income Tax Act, 1961as an AOP and the PAN Card was issued bearing No. . It is also stated in Paragraph 7 that the bankaccount was opened in the name of the AOP and the assesse hadbeen filing the income tax return as an AOP with audit report inForm No.10B prescribed for the purpose of accounting ofcharitable organization. The assessee also has producedAnnexure-3 series which as per the memorandum is a returnfiled in the Financial Year 2013-2014 relatable to the AY 2014- 2015. A mere glance at Annexure-3 would indicate that it is areturn filed on 08.09.2022 in the name of the petitioner withPAN No. , the new PAN Number obtained as anAOP. The assessee filed a new application at Annexure-5allegedly on the instruction of the Assessing Officer, but,however, admittedly without surrendering the earlier PANissued. We are unable to countenance the contention raised thatthe Assessing Officer realizing the mistake of the departmentrequested the assessee to file a fresh application for registrationand issued a new PAN. It is an admitted fact that from the yearin which the new registration was obtained the petitioner filedIncome Tax Return under the new PAN and for the AY 2017-2018, Rs. 14,00,000/- (Fourteen Lakhs) was returned on whichno tax was payable since it was a charitable institution. TheAssessing Officer who had jurisdiction over the firm noticingthe deposit, issued the notice for the year 2017-2018 for non-filing of returns and escapement of turnover. Annexure-6 is theassessment order issued for the year 2017-2018 as against theAOP which had the new PAN No. . We cannot,but notice that the entire assessment order has not beenproduced along with the memorandum. The Assessment Order relatable to the firm is found atAnnexure - 6A which indicates the PAN No. .Therein, the Assessing Officer clearly found that assessee hasfailed to furnish a return of income for the A.Y 2017-2018. Theassesse was found to be a society registered under the SocietiesRegistration Act, 1860 engaged in running an educationalinstitution. The assessment was reopened under the provisionsof Section 147 on detection of a deposit of Rs.14,00,000/-(Fourteen Lakhs) in the bank account of the assessee during thedemonetization period between 09.11.2016 to 30.11.2016.Notice under Section 148 of the Income Tax Act,1961 was sentto the assessee and the response to the same is extracted in theorder produced as Annexure-6A. In fact, the assessee admitscategorically that certificate under Section 12AA of the IncomeTax Act, 1961 was obtained for PAN No. (wrongly noted as ‘N’ in the extract). It is also admitted that thesociety had been allotted a PAN No. , in the year2004. There is a statement that there was a correction of PANapplied which runs contrary to the statement that the AssessingOfficer asked the petitioner to apply for a new PAN Number. On the assessee’s contention that the amounts werealready assessed at the hands of the AOP relatable to the new On the assessee’s contention that the amounts werealready assessed at the hands of the AOP relatable to the new PAN No.; the Assessing Officer sent a communication to ITO(exemption) Ward 01, Patna, the response to which was that theearlier PAN number was not disclosed to the said AssessingOfficer. A fresh show cause notice was issued to the assesseespecifically pointing out the proposal to include Rs.14,00,000/-(Fourteen Lakhs) as escaped assessment. The assessee did notrespond to the notice issued under Section 142(1) of the Act. Itwas found that the assesse had not filed its return of income forthe AY 2017-2018 and did not respond to the notice underSection 142(1) issued on various dates. The contentions raisedearlier were found to be factually incorrect. There wasabsolutely no explanation for the deposit of Rs.14,00,000/-(Fourteen Lakhs) into bank accounts between 09.11.2016 to31.12.2016. There was no explanation of the source of suchmoney or that the same was offered for taxation. It was hence,the Rs. 14,00,000/- deposited in the bank account during thedemonetization period was deemed as unexplained money underSection 69A of the Income Tax Act, 1961, adding it to the totalincome of the assessee which is taxed under Section 150BBE(1) of the Act @ 60%. A revision was filed by the assesse which wasdismissed as per Annexure-9. The revisional authority in fact found that though the challenge was related to the assessmentcarried out against the assessee, a firm, who was issued withPAN No. but the requisite fee was filed againstthe new PAN account. The application of the assesse hence wasdismissed as not maintainable. We are not convinced that there is any valid argumentagainst the assessment of the assessee as a firm with PAN No. for the year AY 2017-2018. The assessee admitsthat an application was filed as an AOP but the registration wasissued as a firm; which is hard to believe, especially since theassessee claims that from the time of its registration in 2004, theassessee had been regularly filing returns, an authenticated copyof which has not been produced here. The earlier returns filedrelatable to the first PAN number issued was as a firm, and notas an AOP. Obviously, in the AY 2015-2016, the assessee filed afresh application for registering the very same institution as acharitable institution under Section 12AA of the Act, withoutsurrendering the earlier PAN issued in the very same name. Thiswas to avail the benefit of Section 12AA. We are of the opinionthat the assessee from the above facts is guilty ofmisrepresentation and even fraud; prima facie, from the abovedisclosed facts. We do not say anything about the measure employed for obtaining the registration under Section 12AA,but however, leave it to the Income Tax Officer to takeappropriate proceedings. As to the challenge against the assessment made, weare convinced that there is absolutely no reason to interfere withthe original order or the revisional order. The writ petition would stand dismissed. Anushka/-AFR/NAFRCAV DATEUploading Date12.05.2023Transmission Date (K. Vinod Chandran, CJ) (Madhuresh Prasad, J)