The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) ordered fresh verification of a Rs. 5.69 crore income addition made against a woman who held one PAN before marriage and another PAN subsequently after she argued that the disputed bank transactions may already have been disclosed in returns filed under the second PAN.
Ritu Rajesh Gohil (the assessee)’s income tax return was assessed for Assessment Year 2018-19. On the basis of specific information relating to transactions with various parties, the assessment was reopened under Section 148 of the Income Tax Act, 1961. A notice under Section 142(1) was also issued.
During assessment, the Assessing Officer obtained information directly from the concerned bank under Section 133(6). The bank statements showed cash deposits aggregating to Rs. 4,16,54,500 and other credits of Rs. 1,53,34,259. There was no compliance from the assessee during the assessment proceedings, so the AO made a total addition of Rs 5,69,88,759.
The assessee challenged the assessment before the CIT(A). The appeal was dismissed because it had been filed with a delay of 354 days. At the same time, the CIT(A) observed that the assessee had been allotted two PANs and directed the AO to verify the matter in accordance with law.
Before the ITAT, the assessee’s counsel argued that one PAN had been allotted before her marriage and another PAN was allotted later. They argued that income-tax returns were being filed under the latter PAN and that the bank records linked to the earlier PAN had also been considered during assessment.
The assessee sought verification of the records to determine whether the income and transactions forming the Rs 5.69 crore addition had already been disclosed in returns filed under the second PAN.
The revenue counsel did not object to restoring the matter to the AO for verification and fresh adjudication after giving the assessee an opportunity of hearing.
The two-member Bench comprising Dr. Arjun Lal Saini (Accountant Member) and Sonjoy Sarma (Judicial Member) observed that the existence of two PANs required examination of the returns, bank statements and assessment records relating to both numbers.
The tribunal observed
“The relevant bank statements, returns of income and assessment records pertaining to both PANs also require examination.”
It explained that such verification was necessary to ascertain the correct facts and avoid duplication in assessment of the same income.
The tribunal set aside the order on the disputed issue and directed the AO to examine returns filed under both PANs, verify the relevant bank records and determine whether the income had already been disclosed and assessed.
The assessee was also directed to furnish the necessary documentary evidence and was to be given a reasonable opportunity of hearing. The appeal was allowed for statistical purposes.
