Harisankar v. Menon

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 6 DAY OF JANUARY 2023 / 16TH POUSHA, 1944 WP(C) NO. 24358 OF 2021 PETITIONER: THE MAYYANAD REGIONAL CO-OPERATIVE BANK LTD.NO.94, MAYYANAD, KOLLAM-691303, REPRESENTED BY K.B.VENUGOPALAN ACHARI, CHIEF EXECUTIVE. BY ADVS. HARISANKAR V. MENON MEERA V.MENON RESPONDENTS: 1INCOME TAX OFFICERWARD 2, KOLLAM-691 301.WARD 2, KOLLAM-691 301. 2THE ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER,INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI-100 001.DELHI-100 001. 3THE INCOME TAX OFFICER,WARD 4, KOLLAM-691 301.WARD 4, KOLLAM-691 301. BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON06.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Petitioner is a Co-operative Society. It was originallyallowed a Permanent Account Number by the Income TaxDepartment showing its status as that of a firm. Thepetitioner had also submitted the said PAN number in respectof its banking transactions. On realising the fact that the PANnumber should have been allotted showing the status of thepetitioner as that of an association of persons, the petitionerapplied for and obtained a new PAN number and startedfiling returns under the new PAN number from theassessment year 2013-2014 onwards. 2.On the basis of the information received by theIncome Tax Department that there were certain unexplainedcash deposits in the Bank accounts of the petitioner for theassessment year 2017-2018, proceedings were initiatedagainst the petitioner and the assessment was completedagainst the petitioner by the National Faceless AssessmentCentre with reference to the PAN number given by thepetitioner to the Bank. This PAN number was the old PANnumber showing the status of the petitioner as a firm. 3.The statement filed on behalf of the respondentswould show that the assessment was completed withreference to the old PAN number only on account of themistake committed by the petitioner by not having the oldPAN number cancelled and by not providing the new PANnumber in respect of its banking transactions. The learnedcounsel appearing for the respondent department fairlysubmits that since the assessment of the petitioner for theassessment year 2017-2018 had already been completed byanother assessment order under the new PAN number, afresh assessment order for the same year under the old PANnumber in respect of the petitioner may not be sustainable.He however submits with reference to paragraphs 5 and 6of the statement, that the department may be permitted toinitiate fresh proceedings for the assessment year 2017-2018,by issuing notice under Section 148 of the Income Tax Actunder the new PAN number, treating the issues which led tothe impugned order of assessment (Ext.P7) as a ground forreopening of assessment for the assessment year 2017-2018.Paragraphs 5 and 6 of the statement filed in this case by the respondent department reads as follows: respondent department reads as follows: “5.After careful analysis of the circumstances underwhich two separate assessments of the same assesseeunder two separate PANs have been made, it is foundthat the sole reason for such happening is that theassessee had not surrendered or deactivated the firstPAN though the assessee has been filing returns in thenew PAN from the assessment year 2013-14 onwards.The assessee has also failed to intimate the banks in timeabout the new PAN which resulted in the uploading ofbank transactions continuously in the old PAN. The hugeamount of cash deposits made by the assessee during thedemonetization period and uploading of the same bybanks in the old PAN resulted in the selection of the casefor scrutiny for the second time. On verification of therecords, it is found that the fault in this regard lies withthe assessee only and not with the department. 6.However, two assessments for the same assesseefor the same assessment year under different PANs fordifferent reasons do not appear to be correct. Therefore,the impugned Ext.P7 assessment may have to be setaside. However, this may be done with a direction toconsider the inclusion of the cash deposits founduploaded in the old PAN as income, if called for, byreopening the assessment already completed by Ext.P4order. This prayer is made in order to protect theinterests of the Revenue as the normal time limit forreopening the assessment for 2017-18 is already over. Itmay be kindly noted that the non-consideration of the cash deposits found uploaded in the old PAN for inclusionas income while completing the original assessment wason account of the fact that the details of these cashdeposits were uploaded in the old PAN only and thereason for this is the failure of the petitioner to deactivatethe old PAN. If the Hon'ble High Court is pleased to givea direction as prayed for as above, the time limit forreopening the assessment get obliterated in terms ofSection 150(1) of the Income Tax Act”. 4.The learned counsel appearing for the petitionerwould submit that the petitioner could not get the old PANnumber cancelled only on account of the fact that thepetitioner could not retrieve its password to enable access theportal. It is submitted that though Exts.P3 to P3(b) requestswere filed in this regard there were no response from theIncome Tax Department. 5.The contention of the petitioner is that thepetitioner could not have the old PAN number cancelled etc.since the petitioner did not have access to the password andhence the portal, is only to be rejected as this is a case wherethe petitioner had quoted and had given the details of its oldPAN number while carrying out Banking transactions withBanks where it had maintained accounts. This was done even The contention of the petitioner is that the in the assessment year 2017-2018, even after the petitionerwas clearly aware that it had been issued with a new PANnumber from the assessment year 2013-2014 onwards andthat the assessments of the petitioner were being completedunder that PAN number. Therefore, for the mistake of thepetitioner, the department cannot be found fault with. 5.The contention of the petitioner is that thepetitioner could not have the old PAN number cancelled etc.since the petitioner did not have access to the password andhence the portal, is only to be rejected as this is a case wherethe petitioner had quoted and had given the details of its oldPAN number while carrying out Banking transactions withBanks where it had maintained accounts. This was done even The contention of the petitioner is that the in the assessment year 2017-2018, even after the petitionerwas clearly aware that it had been issued with a new PANnumber from the assessment year 2013-2014 onwards andthat the assessments of the petitioner were being completedunder that PAN number. Therefore, for the mistake of thepetitioner, the department cannot be found fault with. 6.Therefore, I am of the view that Ext.P7 assessmentorder can be set aside with a right reserved to the respondentdepartment to initiate reassessment proceedings in respect ofthe assessment year 2017-2018, by issuing a notice underSection 148 of the Income Tax Act. In the peculiar facts andcircumstances of this case I hold that it will not be open to thepetitioner to contend that the notices issued under Section148 of the Income Tax Act for the assessment year 2017-2018is barred by limitation. I am constrained to direct so, only onaccount of the fact that according to the department, theunexplained cash transactions relate to the period ofdemonetisation and also on account of the fact that it was thepetitioner’s own mistake in providing its old PAN number thatled to initiation of proceedings and its completion by Ext.P7 order of assessment under the old PAN number. Ext.P7 orderof assessment is quashed permitting the Income TaxDepartment to initiate fresh proceedings by issuance of noticeunder Section 148 of the Income Tax Act for the assessmentyear 2017-2018. The petitioner is precluded from contendingthat the proceedings are barred by limitation. Theproceedings for reassessment shall be initiated as aboveunder the new PAN number of the petitioner.The writ petition is disposed of as above. Sd/-GOPINATH P.JUDGE APPENDIX OF WP(C) 24358/2021 PETITIONER EXHIBITS Exhibit P1COPY OF NOTICE ISSUED BY THE 1ST RESPONDENTRESPONDENT Exhibit P2COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENTBEFORE THE 1ST RESPONDENT Exhibit P3COPY OF E-MAIL LETTER SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENTPETITIONER BEFORE THE 2ND RESPONDENT Exhibit P3(A)COPY OF E-MAIL LETTER SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENTPETITIONER BEFORE THE 2ND RESPONDENT Exhibit P3(B)COPY OF E-MAIL SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENTPETITIONER BEFORE THE 3RD RESPONDENT Exhibit P4COPY OF ASSESSMENT ORDER ISSUEDBY THE 3RDRESPONDENTRESPONDENT Exhibit P5COPY OF DRAFT ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENTTHE 2ND RESPONDENT Exhibit P6COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.BEFORE THE 2ND RESPONDENT. Exhibit P6(A)COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENTBEFORE THE 2ND RESPONDENT Exhibit P7COPY OF ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2017-182ND RESPONDENT FOR THE YEAR 2017-18 Exhibit P8COPY OF JUDGMENT IN W.P.(C)NO.35333/17 OFTHIS HON'BLE COURTTHIS HON'BLE COURT Exhibit P8(A)COPY OF JUDGMENT IN W.P.(C)NO.17323/2019 OF THIS HON'BLE COURT.OF THIS HON'BLE COURT.