2023 (2) TMI 1229 - HC - Income Tax

Reassessment of the income of the petitioner's society - new PAN obtained - as alleged transactions are carried out by the petitioner's society under the old permanent account number, which was obtained in the name of the firm - Since, the petitioner is a co-operative society, the petitioner-society was required to obtain permanent account number under the status of association of persons - acceptability of transaction though carried out under the new permanent account number- HELD THAT - As dispute has arisen on account of the confusion in respect of the permanent account numbers, which was changed in the year 2011. For this reason, this court deems it appropriate that the matter has to be reconsidered by the Assessing Officer further by affording an opportunity to the petitioner to produce necessary documents in support of its claim. This court also makes it clear that nothing is expressed on the merits of the claim of either of the parties and for the purpose of affording an opportunity to the petitioner to substantiate its claim, the matter is remanded to the first respondent. For these reasons the impugned orders are set aside. Since, the petitioner and the respondents are before this court, this court deems it appropriate that the petitioner shall appear before the first respondent on April 10, 2023 without awaiting notice from the first respondent. With the above observations, the writ petition is allowed.

Issues:
1. Challenge to assessment order under Income-tax Act, 1961
2. Reassessment under section 148 of the Income-tax Act
3. Dispute regarding permanent account numbers and transactions

Analysis:

Issue 1: Challenge to assessment order under Income-tax Act, 1961
The petitioner challenged the assessment order under section 147 read with sections 144 and 144B of the Income-tax Act, 1961, along with the demand notice and further consequential orders. The petitioner, a cooperative society, had initially obtained a permanent account number under the status of a firm but later realized the need to obtain a new permanent account number under the status of an association of persons. The petitioner contended that all transactions were duly reflected in the income tax returns filed under the new permanent account number. The respondents sought reassessment based on transactions under the old permanent account number, obtained in the name of the firm. The court noted the confusion regarding the permanent account numbers changed in 2011 and remanded the matter to the Assessing Officer for further consideration, allowing the petitioner to produce necessary documents to support its claim.

Issue 2: Reassessment under section 148 of the Income-tax Act
Another petitioner questioned the order issued under section 148 of the Income-tax Act, seeking reassessment of the income of the petitioner's society. The court observed that the Assessing Officer had given an opportunity to the petitioner to substantiate its contentions but deemed it appropriate to remand the matter for further consideration, emphasizing the need for the petitioner to provide necessary documents to support its claim. The court set aside the impugned orders, expressing no opinion on the merits of the claim of either party.

Issue 3: Dispute regarding permanent account numbers and transactions
The dispute primarily revolved around the confusion arising from the change in permanent account numbers in 2011. The petitioner argued that despite obtaining a new permanent account number, transactions were mistakenly reflected under the old number due to a lapse on the part of the banker in updating the account information. The court acknowledged the need for a reconsideration of the matter by the Assessing Officer, allowing the petitioner to present relevant documents to substantiate its claim. The court emphasized the availability of the scope of remand in such matters and referred to relevant judgments to support its decision.

In conclusion, the court allowed the writ petition, setting aside the impugned orders and remanding the matter to the Assessing Officer for further consideration. The court directed the petitioner to appear before the first respondent without awaiting notice, and disposed of the pending interlocutory applications.

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