Ia No.can 1 Of 2023 v. Income Tax Officer, Ward 30(1), Kolkata & Ors

17.11.2023Item No.05 RP/AN Ct. No.1 MAT 1568 of 2023 + IA No.CAN 1 of 2023 Smt. Rachna Singhi Vs. Income Tax Officer, Ward 30(1), Kolkata & Ors. Ms. Manju AgarwalMs. Anju Manot …..for the Appellant Ms. Smita Das De..for the respondents 1.This intra-Court appeal filed by the appellant isdirected against the order dated 12[th] June, 2023passed in WPA 10215 of 2023. In the said writpetition the appellant/assessee had challenged anorder passed by the Assessing Officer under Section148A(d) of the Income Tax Act, 1961 (for short the“Act”). The writ petition has been dismissed on theground that the appellant/assessee can raise allcontentions in the re-assessment proceedingpursuant to the order passed under Section 148A(d)of the Act. Under normal circumstances, the Courtwould not have entertained the contentions raisedby the appellant. However, the peculiar facts andcircumstances of the case has convinced the Courtthat the order dated 30[th] March, 2023 passed underSection 148A(d) of the Income Tax Act, 1961 calls for interference. The conclusion is supported byadvancing the following reasons. 2.Initially, an enquiry was conducted under Section148A(a) of the Income Tax Act, 1961. In suchenquiry the assessee had participated and producedall documents. However, the Assessing Officerthought it fit to issue notice dated 17[th] February,2023 under Section 148A(b) of the Act. Two issueswere pointed in the said notice : (i) there is cashdeposit in the current account to the tune ofRs.819.16 lakh; (ii) there is cash withdrawal inaccount to the tune of Rs.0.44 lakh. The assesseewas called upon to submit her reply. The assesseehas submitted its reply on 24[th] February, 2023 andalso enclosed necessary documents in support of herstand. E-response has also been uploaded withinthe date stipulated. In the gist of the e-response theassessee had pointed out that initially the asessee,namely, M/s. Luxmi Service Station was apartnership firm comprising of the partner Smt.Rachna Singhi and her father. After demise of herfather she became the sole proprietress of the firmas the mother of the appellant has pre-deceased herfather. The assessee, namely, M/s. Luxmi ServiceStation is a dealer of the Hindustan PetroleumCorporation Limited (HPCL). This fact was broughtto the notice of HPCL and a memorandum of agreement was entered into between the assesseeand HPCL by which the assessee was recognized asthe sole-proprietress of M/s. Luxmi Service Station.The bank account of the assessee has been retainedwith the very same bank and upon necessarydocuments being produced by the assessee to thebank, the bank has accepted the documents andconverted the bank account as a proprietorshipaccount. However, the PAN number of the assesseehas been included instead of the PAN number of theerstwhile firm. The assessee has also pointed outthat the cash deposit is only Rs.409.58 lakhs andnot Rs.819.16 lakhs. This aspect of the matterappears to be accepted by the Assessing Officer.However, curiously enough the assessee has beennon suited by the Assessing Officer and held thatthe assessee has not produced any deed ofdissolution of the firm. The Assessing Officer haslost sight of the fact that the partnership firm stooddissolved on account of demise of the assessee’sfather and not on account of any voluntarydissolution. Therefore, to insist upon a deed ofdissolution is an action which is incapable of beingperformed. In any event, it is the HPCL who hasrecognised the assessee as a proprietor after havingaccepted the fact that the assessee’s father is nomore and the assessee has been recognized as a proprietor and a memorandum of agreement hasbeen entered into between the assessee and HPCL.Therefore, the Assessing Officer has no jurisdictionto sit over the said action initiated by HPCL inrecognizing the assessee as proprietor of M/s. LuxmiService Station. The other reasons stated by theAssessing Officer is that the PAN of the partnershipfirm has not been deactivated. As noted in the e-response filed by the assessee tot he show causenotice, the assessee has specifically made a prayerto de-activate the PAN issued in the name of thepartnership firm. In any event, such de-activationhas not taken place. Since the bank has recognizedthe assessee as the sole proprietor of M/s. LuxmiService Station and PAN of the assessee has beensubstituted in the said bank account instead of PANof the partnership firm, which stood automaticallydissolved by operation of law, there is no groundmade out for reopening of the assessment. 3.In the result, the appeal and the connectedapplication are allowed. Consequently, the writpetition is allowed and order passed under Section148A(d) of the Act is set aside and the entirereopening proceeding is quashed.application are allowed. Consequently, the writpetition is allowed and order passed under Section148A(d) of the Act is set aside and the entirereopening proceeding is quashed. (T. S. SIVAGNANAM) CHIEF JUSTICE (HIRANMAY BHATTACHARYYA, J.)