The Income Tax Appellate Tribunal (ITAT) has remanded a case back to the Commissioner of Income Tax (Appeals) (CIT(A)) for fresh adjudication after noting that the assessee failed to disclose the possession of multiple PANs, which led to confusion during appeal proceedings.
The case involves Bundelkhand Ispat Melting Pvt. Ltd.,the assessee,which had its reassessment proceedings scrutinized for multiple issues, including the alleged receipt of an unsecured loan and commission payments under false pretenses.
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The assessee challenged the reassessment order dated December 26, 2019, passed by the Assessing Officer (AO) under sections 147 & 144 of the Income Tax Act,1961 for the assessment year 2012-13. The reassessment arose from an investigation in which the authorities found that the assessee had received an unsecured loan of Rs. 28,00,000 from Bansal Supplier Pvt. Ltd., a company allegedly involved in providing accommodation entries. Further investigation revealed that the assessee had also made commission payments of Rs. 70,000 for the transaction.
The primary concern for the ITAT was the assessee’s use of two different Permanent Account Numbers (PANs) during the appeal process. The reassessment proceedings had been initiated under PAN AADCB3941R, but the assessee filed the appeal with CIT(A) and later with ITAT using a different PAN, AADCB5490K. This discrepancy raised questions about the integrity of the appeal and the validity of the claims made by the assessee.
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The CIT(A) had earlier dismissed the appeal, citing the use of a different PAN in the proceedings and directing the assessee to come forward with clean hands. Despite instructions to resolve the issue of holding multiple PANs, the assessee failed to comply, which led to the dismissal of the appeal. In response, the assessee filed a second appeal before the ITAT, which examined the situation in detail.
The ITAT found that the assessee had not provided an explanation for holding two separate PANs, a violation under the Income Tax Act. According to the ITAT, this act undermined the credibility of the assessee’s appeal, as one PAN was used for raising alleged accommodation entries, while the other was used to file the income tax return. The fact that the assessee had been issued two PANs with different addresses raised suspicions of deliberate tax evasion or concealment of income.
After considering the facts and circumstances, the ITAT decided to restore the matter to the CIT(A) for a fresh examination. The assessee was directed to rectify the appeal filed with the CIT(A) and ensure it is filed with the PAN used during the reassessment process. Additionally, the ITAT instructed the CIT(A) to condone any delay in filing the fresh appeal, recognizing that the assessee had been vigilant in pursuing the matter before higher appellate authorities.
The ITAT also directed the CIT(A) to examine the allegations raised by the assessee that the loan from Bansal Supplier Pvt. Ltd. was, in fact, share application money rather than a loan. This new argument needs proper evaluation by the CIT(A) during the reassessment of the case.
In addition to remanding the case to the CIT(A), the Single Member Bench of Ramit Kochar(Accountant Member) also set aside the penalty order passed under section 271(1)(c) in a related appeal. The CIT(A) was tasked with reassessing the penalty issue in light of the directions provided in the primary appeal.
The matter now rests with the CIT(A), who will have to determine whether the allegations of accommodation entries are valid and whether the penalty order should stand.
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In conclusion, the appeals in ITA No. 17 and ITA No. 18 have been allowed for statistical purposes, with both parties instructed to resolve the issues and present the matter again for proper adjudication.
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