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TMI Blog2025 (4) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... ule returnable forthwith. Learned advocate Mr. Nikunt Raval waives service of notice of rule for the respondent. 4. Having regard to the controversy which is involved in narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing. 5. Brief facts of the case are as under: 5.1 The petitioner-Bank is successor entity of erstwhile Oriental Bank of Commerce ['OBC' for short] which was a nationalized bank engaged in banking activities on Pan-India basis having PAN Number allotted by the respondent "AAACO0191M". 5.2 For the Assessment Year 2009-10, when TDS returns of Regional Offices/Branches of several classes tax payers were filed by the regional offices/branches of the OBC, a PAN bearing number 'AAACO7436M' was obtained for TDS compliances of Bharuch Branch. At the relevant time, the said OBC Bank received a letter dated 09.08.2012 as well as notice of the same date under section 142(1) of the Act from respondent No.1 for not filing return of income for Assessment Years 2009-10 and 2010-11 which was responded by the OBC Bank by filing provisional receipts/TDS returns of said branch for the relevant period stating that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated 23.08.2021 issued under section 142(1) of the Act referring to PAN "AAACO7436M" asked the OBC Bank, Bharuch Branch to show cause as to any return of income for A.Y. 2017-18 was not filed. A reference was also made to purchase of time deposits aggregating Rs. 393.97 Crore during Financial Year 2016-17 and documentary evidence were called for. It is the case of the petitioner that such notice was never received. 5.11 Thereafter, respondent No.2, Additional Joint/Deputy/Assistant Commissioner of Income Tax, National E- Assessment Centre, Delhi, issued notices dated 10.12.2021, 06.01.2022 and 25.01.2022 posted on the ITBA Portal page of the unused PAN "AAACO7436M" and therefore, never served upon the petitioner-PNB raising similar queries as to non-filing of return of income for A.Y. 2017-18 by the OBC Bank. 5.12 The petitioner thereafter notice dated 11.02.2022 was physically served by Speed Post by respondent No.1 to the Bharuch Branch of the PNB which was erstwhile branch of the OBC. The said notice was received by PNB, Bharuch Branch on 17.02.2022 which required a compliance on 18.02.2022. 5.13 The petitioner therefore, by reply dated 18.02.2022 to the notice dated 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse inference which was sought to be raised. However, the same was refused by respondent No.1. 5.15 It appears that respondent No.1, without considering written submissions and the reply filed by the petitioner, passed impugned assessment order determining the taxable income of Rs. 393.97 Crore raising a demand of Rs. 648.26 Crore in name of erstwhile OBC, Bharuch Branch inspite of informing by the petitioner that the OBC has already been merged with the petitioner-PNB w.e.f. 01.04.2020 and the PAN being AAACO7436M" was already cancelled in the Year 2013. 6. Learned advocate Mr. S. Krishnan for the petitioner submitted that the impugned order is a classic example of non- application of mind on behalf of the respondent-Assessing Officer as inspite of making submissions by the petitioner-Bank which is duly recorded in the assessment order but the same was not considered and ignored for making high-pitched assessment on an entity which does not exist and the PAN number which does not exist for more than Eight years. 6.1 It was submitted that the impugned assessment order is therefore, liable to be quashed and set aside being passed on a non-existing entity 'OBC' and the non-existi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s. 148 of the Act. Also, the assessee has claimed in its writ petition that it has submitted application for surrender/cancellation of PAN in 2012, then how come, the assessee continued to use the same PAN during the FY2016-17. Hence, assessee's claim is not found to be correct. (d) It is submitted that the case of the assessee was reopened and notice under section 148 dated 31.03.2021 was issued after obtaining prior approval of the Additional Commissioner of Income Tax, Range2(1), Vadodara. The information regarding prior approval of the Additional Commissioner of Income Tax, Range-2(1), Vadodara, is enumerated on the ibid notice. (e) It is submitted that the notices u/s. 142(1) of the Act was issued on 23.08.2021, 11.02.2022 and 28.02.2022. It is pertinent to mention that in all the notices under section 142(1) of the Act, a point was mentioned very clearly which reads as "The above mentioned evidence/information is to be furnished online electronically in 'E-proceeding' facility through your account in 'e- filing' website of Income Tax Department." However, no reply has been submitted by assessee during the course of assessment by the way mentioned above. (f) It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice states that notice u/s. 148 was issued after prior approval of Pr.CIT, it is submitted that the notice u/s. 148 was issued with prior approval of Jt.CIT, Range-2(1), Vadodara which is clearly mentioned on notice u/s. 148 of the Act dated 28.03.2021. The mention of Pr.CIT on show-cause notice is merely a typing mistake and nothing else as both of them are approving authorities for issuing of notice u/s. 148 of the Act depending upon the assessment years. (l) It is submitted that the assessee has claimed that the impugned order dated 30.03.2022 creates a pejorative demand of Rs. 648.26 crores, which is a huge sum of money that could de-stabilize the Petitioner's business operations. In this connection, it is submitted that the assessment proceeding has been completed taking into consideration the total income of the assessee and the demand raised is the natural outcome of the same. (m) It is submitted that the assessee has claimed that penalties under various provisions stand initiated, which would lead to multiple proceedings, which makes the present proceedings efficacious, as it would prevent multiplicity of litigation. In this connection, it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the erstwhile OBC for filing TDS return and was subsequently requested for cancellation in the Year 2013; (v) It also appears on perusal of the impugned assessment order that the same is passed in name of OBC Bank, Bharuch Branch for PAN "AAACO7436M" for A.Y. 2017-18 on the basis of the Multi Year MNS Data which revealed that the OBC Bank has purchased the time deposits other than a time deposit made through renewal of another time deposits aggregating to Rs. 393.97 Crore during the previous year 2016-17 relevant to A.Y. 2017-18 which was not offered to tax, however, when it was submitted to the respondent No.1 by the petitioner-PNB which is duly recorded in the assessment order (Page 117 of the paper-book) that the OBC was merged with PNB and the jurisdiction of the erstwhile OBC was in New Delhi having PAN "AAACO0191M", but the Assessing Officer, without considering such submission, proceeded to finalize the assessment on the data available on examination of the Multi Year MNS Data by making addition of Rs. 393.97 Crore raising demand of Rs. 648.26 Crore on a non-existing OBC for A.Y. 2017-18 by the impugned assessment order passed under section 147 read with section 144 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97 Crore attracting the tax demand of Rs. 648.26 Crore and such high-pitch assessment order could not have been passed against a non-existing OBC under PAN "AAACO7436M" which was already requested to be cancelled since 2013 and hence, and for no fault on part of the petitioner, the impugned order is passed on account of total non-application of mind and negligence on part of the respondent No.1. We therefore deem it to be a fit case to impose exemplary cost of Rs. 1 Crore upon the respondent to be paid to the petitioner-Bank for passing such high pitched assessment order contrary to the facts available on record. 13. After the judgement was dictated in the open Court, whereby, we deemed it fit to impose exemplary cost of Rs. 1 Crore upon the respondents while signing the present judgement, we felt that an opportunity should be granted to the respondents to show cause as to why such cost should not be imposed. 14. We are conscious of the fact that quantum of the cost proposed to be imposed by us is a small fraction of the quantum of the high-pitched assessment and consequent demand raised upon the petitioner-PNB. 15. In view of the above, let this matter be listed for further hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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