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Court quashes incorrect PAN, orders reassessment under correct PAN for Partnership Firm. The Court quashed the impugned orders and demand notices, directing the Respondent to cancel the incorrect PAN and reassess the Partnership Firm under the ...
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Court quashes incorrect PAN, orders reassessment under correct PAN for Partnership Firm.
The Court quashed the impugned orders and demand notices, directing the Respondent to cancel the incorrect PAN and reassess the Partnership Firm under the correct PAN for the relevant assessment years. Both parties were faulted for not rectifying the PAN issue earlier. The Court found in favor of the Firm, staying the demand notices and mandating a reassessment under the correct PAN, without imposing costs.
Issues involved: The judgment involves a challenge to a notice under section 148 of the Income-tax Act, 1961, and subsequent orders and demand notices for assessment years 2015-16 and 2016-17 based on the use of an incorrect Permanent Account Number (PAN) by a Partnership Firm.
Facts: The Partnership Firm, engaged in trading stainless steel, had two PANs - one correct and one incorrect. The incorrect PAN was mistakenly issued as a company instead of a Partnership Firm. Despite not using the incorrect PAN for filing returns or registering on the e-filing portal, the firm received a notice under the incorrect PAN for failure to furnish returns. The firm, unable to access the e-filing portal under the incorrect PAN, sought to respond through their Chartered Accountant (CA) before the assessment proceeding's time bar expired.
Court's Analysis and Decision: The Court noted that the Respondent failed to address key issues such as the status of the incorrect PAN in their records and the firm's filing history under the incorrect PAN. The Court criticized the Respondent for not taking steps earlier to verify the PAN status and communicate effectively with the firm. Both parties were found at fault for not canceling or surrendering the incorrect PAN despite the firm filing audited returns and paying taxes under the correct PAN.
Judgment: The Court quashed the impugned orders and stayed the demand notices issued by the Respondent. The Respondent was directed to cancel the incorrect PAN and assess/reassess the firm for the relevant assessment years under the correct PAN after considering the firm's submissions and documents. The Court made the rule absolute in the specified terms without imposing any costs.
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