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2015 (12) TMI 1077 - HC - Income TaxExistence of partnership firm - AOP - PAN issued - Held that - The insistence of the Department, however, on the firm filing return since the PAN was issued on the name of the firm does not appear to be valid. Even according to the Department, no such partnership firm existed. Merely because PAN was issued by the Department erroneously, there cannot be any insistence that return should be filed in the same capacity. Erroneous description in the PAN would not change the reality that no such partnership firm ever existed. However, with respect to the members of the AOP and the grievance of not being able to get credit of the tax deducted at source, we are afraid, the same cannot be resolved at this distant point of time. We are referring to the years 2005 and onwards till the fresh PAN was issued in favour of the AOP in the year 2011. Assessments would have been over or time-barred.
Issues:
1. Challenge to order by Commissioner of Income Tax regarding PAN card issuance and filing of income tax returns by an association of persons (AOP). 2. Interpretation of section 119 of the Income Tax Act for relief in cases of genuine hardship. 3. Dispute over the correct entity (AOP or partnership firm) required to file income tax returns based on PAN card issuance. 4. Delay in correcting PAN card details leading to denial of TDS benefits to AOP members. Detailed Analysis: 1. The petitioners challenged the order of the Commissioner of Income Tax regarding the issuance of a PAN card in the name of a partnership firm instead of the AOP, leading to confusion in filing income tax returns. The petitioners contended that the authorities erred in not recognizing the department's mistake and requested relief under section 119 of the Income Tax Act due to genuine hardship. The delay in correcting the PAN card was emphasized as a reason for the confusion, impacting the filing of returns by the AOP members. 2. The interpretation of section 119 of the Income Tax Act was crucial in determining whether relief could be granted in cases of genuine hardship. The petitioners argued for the exercise of powers under this section to rectify the PAN card error and alleviate the hardship faced by the AOP members. Legal precedents were cited to support the contention that undue hardship should be considered for relief under this provision. 3. The dispute over the correct entity required to file income tax returns, either the AOP or the partnership firm, arose due to the erroneous issuance of the PAN card. The Department insisted on the firm filing returns based on the PAN details, despite no such firm existing. The court noted that the PAN error did not change the reality of the non-existence of the partnership firm, highlighting the importance of accurate entity identification for tax compliance. 4. The delay in correcting the PAN details resulted in the denial of TDS benefits to the AOP members, as the income tax authorities required returns to be filed by the non-existent partnership firm. The court acknowledged the hardship faced by the AOP members but noted that resolving the issue retroactively for past assessment years was challenging due to time limitations and the completion of assessments. The petition was disposed of with observations on the limitations of granting relief in such circumstances.
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