2019 (12) TMI 91 - HC - Income Tax

Misuse of PAN - Rival group has been using the same Permanent Account Number (PAN) and hacking into the user name of the petitioner-society - HELD THAT - The undisputed facts in this case are that there is a long running dispute between the petitioner and the respondent no.7 and both these groups are filing annual returns before the Registrar of Societies. It is to be noted that there is no provision under the Income Tax Act, 1961 that allows both these groups to file income tax returns for a particular financial year having same Permanent Account Number. Under the Income Tax Act, 1961 only one Permanent Account Number is issued to an entity and only one return can be filed. The factual aspect with regard to which group has been issued the original PAN has to be ascertained by the Income Tax authorities. Furthermore, the Income Tax authorities may reject the returns that have been filed by the group that is not authorised to do so. The respondent no.6 being the AO of the petitioner no.1 is directed to grant an opportunity of hearing to the petitioner and the respondent no.7, and thereafter, pass a reasoned order within a time-bound period. It is made clear that the AO shall examine the issue as to which group is authorised to file the return as per the PAN that has been issued by the Income Tax authorities. The parties shall be at liberty to produce all documents with regard to the title suits that indicate as to who is controlling the management of the society. Upon passing of the order, the AO shall cancel the PAN card issued to the unauthorised/wrong party and reject the return filed by them. The reasoned order should be communicated to both the parties within a period of two weeks from the date of passing of the reasoned order. AO is requested to complete the above proceeding within a period of eight weeks from the date of communication of this order.

Summary

Issues:
1. Dispute over management authority of a society.
2. Allegations of hacking and filing revised income tax returns.
3. Use of the same Permanent Account Number (PAN) by rival groups.
4. Involvement of Income Tax authorities in resolving the dispute.

Analysis:
1. The petitioners claim sole management authority of the society and allege that the rival group has been filing revised income tax returns based on their filings. The respondent, on the other hand, contends that the petitioners hacked into their username and password. The Income Tax authorities have acknowledged the issue and prepared a report for further action.

2. The Income Tax report highlights the ongoing dispute and the unauthorized filing of income tax returns by both groups using the same PAN. The report emphasizes that only one PAN can be issued to an entity under the Income Tax Act, and the Assessing Officer is tasked with determining the authorized party. The Officer is directed to grant a hearing to both parties, examine relevant documents, and issue a reasoned order within a specified timeframe.

3. The court directs the Assessing Officer to cancel the PAN issued to the unauthorized party, reject their filed returns, and communicate the decision to both groups within two weeks of the order. The Officer is instructed to complete the proceedings within eight weeks from the date of communication, effectively resolving the dispute over the management and income tax filings of the society.

4. The writ petition is disposed of with the mentioned directions, emphasizing that the allegations in the petition are not deemed admitted due to the absence of an affidavit requirement. The court also allows for the issuance of an urgent certified copy of the order to the concerned parties upon request.