Cwjc/7018/2024 Of Bihar Industrial Area Development Authority v. The Deputy Commissioner/ Assistant Commissioner, Exemption Circle, Income Tax Deptt., Patna

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.7018 of 2024 ====================================================== Bihar Industrial Area Development Authority, a statutory authority registeredunder the Bihar Industrial Area Development Act, 1974, having its registeredoffice at BIADA Udyog Bhawan, Gandhi Maidan, Bankipur, Patna- 800001through its Manager Finance, Mr. Prakash Singh, son of Late Shri Ramjeesingh, aged 46 years, Male, resident of C/o Sharan Niwas, Behind RahualMasala Mills, Budha Colony, P.S.- Budha colony, P.O.- Shri Krishna Nagar,Kidwaipuri, Patna- 800001. ... ... Petitioner/s Versus The Deputy Commissioner/ Assistant Commissioner, Exemption Circle,Income Tax Deptt., Patna. ... ... Respondent/s ======================================================Appearance :For the Petitioner/s: Mr. Ajay Kumar Rastogi, Sr. Advocate Ms. Smriti Singh, Advocate Mrs. Kalpana Rastogi, AdvocateFor the Respondent/s: Mrs. Archana Sinha, Sr. SC. I.T. Dept.====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHYCAV JUDGMENT(Per: HONOURABLE THE CHIEF JUSTICE) Date : 30-10-2024 The petitioner, a creature of statute is aggrievedwith the assessment carried out for the assessment year 2019-20, in its old PAN with the status of ‘Firm’ while the statuswas changed to an ‘Artificial Judicial Person’ (for brevity,AJP) in which renewed status there was already anassessment carried out; of the same assessment year. 2. The petitioner was issued with a notice on20.03.2023 for the assessment year 2019-20, as per Annexure-P/4 in its earlier PAN No.- ; underSection 147 read with Section 148 of the Income Tax Act, (forbrevity, the Act). Simultaneously, another notice dated31.03.2023 (Annexure-P/5) was issued in its present PAN No- by the ITO, Ward 1(1) Patna, the JurisdictionalAssessing Officer, for the very same assessment year. Thenotice under the old PAN was issued by the DeputyCommissioner/Assistant Commissioner, Exemption CirclePatna. The subsequent notice issued resulted in an assessmentorder, passed as per Annexure-P/6, against which an appealwas filed before the Commissioner of Income Tax Appeals,National Faceless Appeals; the acknowledgment of which isproduced as Annexure-P/7. Despite the earlier assessmentpassed at Annexure-P/6 and the appeal filed, having beenintimated in the reply to the notice issued at Annexure-P/4;un-deterred, the assessment was completed in the non-existentPAN by Annexure-P/1. 3. Shri. Ajay Kumar Rastogi, learned SeniorCounsel appearing for the petitioner argued that there cannotbe two assessment orders for the same assessment year. TwoPAN cannot be existing simultaneously for the very sameentity, especially considering the express bar under Section 139(A)(7) of the Act. Reliance is also placed on Section 124of the Act. It is pointed out that for the very same assessmentyear, two different Assessing Officers have exercisedjurisdiction over the petitioner, which is also not legallypermissible. Reliance is placed on Kai Balkrishna R.Gawade Mandi Vyapari Premises Sahakari SansthaMaryadit v. Income-Tax Officer and Ors;(2023) 457 ITR41 (Bom) and Shree Ramkrishna Sishu Tirtha & Anr. v.Income Tax Officer and Ors;(2023) 457 ITR 729 (Cal). 3. Shri. Ajay Kumar Rastogi, learned SeniorCounsel appearing for the petitioner argued that there cannotbe two assessment orders for the same assessment year. TwoPAN cannot be existing simultaneously for the very sameentity, especially considering the express bar under Section 139(A)(7) of the Act. Reliance is also placed on Section 124of the Act. It is pointed out that for the very same assessmentyear, two different Assessing Officers have exercisedjurisdiction over the petitioner, which is also not legallypermissible. Reliance is placed on Kai Balkrishna R.Gawade Mandi Vyapari Premises Sahakari SansthaMaryadit v. Income-Tax Officer and Ors;(2023) 457 ITR41 (Bom) and Shree Ramkrishna Sishu Tirtha & Anr. v.Income Tax Officer and Ors;(2023) 457 ITR 729 (Cal). 4. The contention in the counter affidavit of theDepartment is that the petitioner had failed to correct thePAN, in its bank accounts which resulted in the abovesituation. It is submitted that if at all transactions were foundin the old PAN, the correct procedure would be for theCommissioner to invoke Section 263 of the Act and notproceed for assessment by a different Assessing Officer forthe very same assessment year, against the assessee, on a non-existent PAN. It is also pointed out from Annexure-P/10 thateven for the earlier assessment year, 2018-19, the petitionerwas assessed as an AJP in the new PAN. The Departmentcannot say that the PAN has not been validly changed. 5. Smt. Archana Sinha, learned Standing Counselfor the Department seeks to uphold the order on the groundthat there were transactions found in the earlier PAN, whichwas not disclosed or assessed under the new PAN. Thetransactions in the form of time deposit and rental receiptswere not disclosed by the assessee in the returns and there hasbeen no response and notice was issued under Section 148 ofthe Act. 6. (2023) 457 ITR 41 (Bom) held that it was theduty of the Income Tax Officer to examine and verify thecontention of the assessee, with respect to cancellation of oldPAN and the returns filed under the new PAN, before issuanceof the order and notice. Therein, the assessee, a registeredcooperative credit society was assessable as an ‘association ofpersons’ but the present in-charge had applied for a PAN, as atrust. Later the mistake was realised and application was madefor a new PAN, which was allotted with the change of status.Despite repeated requests for cancelling the old PAN, therespondent-Department failed to do the needful. A noticecame to be issued on the basis of a time deposit with thePunjab National Bank. The assessee informed the Departmentthat there is no new time deposit in the relevant assessment year and all the deposits and interest thereon were disclosed inthe return of income under the new PAN. The said contentionswere rejected and a notice was issued for reopening theassessment under Section 148 of the Act. The learned Judgesof the Bombay High Court noticed that the respondents wereunable to point out any regulation, circular or a procedure bywhich the PAN could be cancelled by the assessee. It was alsorevealed from the records that the assessee had filed theirreturn under the new PAN. In the above circumstances theCourt cancelled the impugned order under Section 148(A)(d)as also directed cancellation of the old PAN in accordancewith law and directed assessment or reassessment of thepetitioner for the assessment year 2019-20. 7. (2023) 457 ITR 729 (Cal) was again a case inwhich the order under Section 148(A)(d) was challenged onthe ground that the order was passed in a PAN which wasalready surrendered by the assessee. Therein again the orderimpugned was set aside also on the ground of being a non-speaking order and the matter was remanded to the AssessingOfficer. 8. The cited decisions indicate facts identical to 7. (2023) 457 ITR 729 (Cal) was again a case inwhich the order under Section 148(A)(d) was challenged onthe ground that the order was passed in a PAN which wasalready surrendered by the assessee. Therein again the orderimpugned was set aside also on the ground of being a non-speaking order and the matter was remanded to the AssessingOfficer. 8. The cited decisions indicate facts identical to the present one, with the only difference that here the assesseewas earlier issued a PAN in the status of a ‘Firm’ and thesame was surrendered while obtaining a new PAN in thestatus of ‘AJP’. In fact, for the year 2018-19, as we noticed,the assessment was completed in the new PAN and even inthe assessment year 2019-20, which is the subject matter ofthe above writ petition, the assessment was completed as perAnnexure-P/6. 9. When a notice under Section 142(1) was issuedas is indicated in Annexure-P/1 impugned order, the assesseehad specifically brought to the notice of the Assessing Officerthat, there was a new PAN issued. In fact, it is also pertinentthat the assessment was completed by an Officer; asdistinguished from a faceless assessment, to whom the matterwas assigned as the Jurisdictional Assessing Officer underSection 144B(8); transferring it out of faceless assessment,since it was a case of duplicate PAN. 10. We cannot but notice that this is not a case ofduplicate PAN, as the earlier PAN was surrendered and a newPAN was issued with a renewed status. Even if sometransactions were noticed in the earlier PAN, it was perfectly within the competence of the Jurisdictional Assessing Officerto proceed with the re-assessment under the new PAN, findingthe transactions carried out in the earlier PAN; if at all socarried out in the assessment year and not disclosed in thereturns, as having escaped assessment. 11. On the above reasoning, we find Annexure-P/1 to be untenable and we set it aside only on the issue of theassessment having been made in a PAN which was alreadysurrendered. 12. However, the department cannot be prohibitedfrom carrying out fresh proceedings. The petitioner in the writpetition itself has stated that the Commissioner could carryout a suo motu revision under Section 263 of the Act or theappellate authority could exercise the power under Section251 of the Act. We would further observe that as of now, evena reassessment could be initiated under Section 148 of the Actafter issuance of a notice under Section 148(A) by theJurisdictional Assessing Officer and the assessment completedthrough the faceless assessment procedure, in the new PAN,deeming the transactions carried out in the earlier PAN, to bethat of the assessee, whose status has been converted and a new PAN issued; if the same is not disclosed in the returns orassessed to tax and thus escaped assessment of tax in therelevant year. 13. We have only observed on the various options available to the Department and it is for the Department tochoose legally permissible options to be exercised and in anyevent, the assessee would not be entitled to raise the questionof limitation and any proceeding taken would be relatable tothe date on which the notice was issued under Section 148(A)of the Act as against the old PAN. 14. The writ petition is allowed with the abovedirections. (K. Vinod Chandran, CJ) Partha Sarthy, J: I agree aditya/- AFR/NAFRCAV DATE24.10.2024.Uploading Date30.10.2024.Transmission Date (Partha Sarthy, J)