TMI Blog2014 (10) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ‘individual’ - There cannot be any doubt that the assessees would have taken sufficient care to apply for PAN Card through some Tax Consultants but still the applications are made specifically in the name of “and Others” but in the status of ‘individual’. Each of them has a specific share in the property - It is not known as to what is the common action taken by all of them together - There cannot be any dispute that if income is earned by virtue of joint action, it has to be assessed as ‘Association of Persons’ and not in the hands of each co-owner - the AO has to take proper care and analyse the facts of each case and on examination he should have recorded an appropriate finding as to whether the share of each individual is determinate and whether it is assessable as AOP or in the hands of each individual under section 26 of the Act - It also needs verification as to how the refund is granted to the individual with the same PAN Card when the PAN card is issued in the name of ‘Firm’ - It is intriguing that from year to year not only proceedings were completed under section 143(1) but also under 143(3)/CIT(A) but this aspect was not examined – thus, the order of the CIT(A) is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Sai Shraddha. With regard to these properties the co-ownership agreement was entered into on the 1st day of July, 1999 in the case of C Wing whereas in the case of B Wing property the so called co-ownership agreement was entered on the 2nd day of March, 2000. In both the properties Shri Praful Ramesh Shah and Shri Ritesh Ramesh Shah are joint/co-owners. 5. In the name Ritesh Ramesh Shah Others and Praful Ramesh Shah Others PAN card was sought to be obtained. In Form No. 49A one has to tick mark the status in which PAN card is required. For individual the 4th digit of the PAN will reflect P , for HUF it is H , for company C , for Firm F , for AOP A , for Trust T . Similarly BOI is referred to as B , local authority as L and Artificial Juridical Person as J . The parties herein, though claimed themselves as co-owners , i.e. Ritesh Ramesh Shah Others and Praful Ramesh Shah Others, they claimed to have applied for PAN in the name of individual . Presuming that Others would be absent in the case of individuals, PAN was given in the name of firms. It appears that tax is deducted under the said PAN. The parties kept on filing returns by showing the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO. 9. Aggrieved, assessees are in appeal before the Tribunal. The learned counsel for the assessees submitted that the assessees are Group of Individuals who have collected rent on behalf of the co-owners. Since the co-owners have been individually assessed to tax on their share of income, bringing to tax the same income in the hands of the AOP/Group of Individuals would amount to double taxation. The learned counsel adverted the attention of the Bench to pages 12 13 of the paper book, i,e. certificate by Ritesh Ramesh Shah and Others to submit that there are 12 co-owners who have collectively let out the property but the income is includible in the total income of the respective co-owners, under section 26 of the Income Tax Act, 1961, to the extent of their share in the income. It was also highlighted that the co-owners have already included their share of income in their respective returns of income. 10. When pointed out that the present assessees are assessed to tax as individuals and the 4th digit in the PAN cards indicates that the PAN card is obtained in the status of Firm (AAFFR3849D AAFFP4957N), the learned counsel submitted that as a matter of fact the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share of each individual is determinate and assessed as such the same cannot again be taxed as AOP by the AO whereas, in the instant case, there was no assessment in the hands of the AOP. It was also submitted that the assessee declared, in the return, individual status and hence there is no question of allocation under section 26 of the Act. Under the circumstances the AO was justified in accepting the declared income as aggregate total income. He thus supported the orders passed by the AO. He also submitted that the learned CIT(A) was justified in holding that under section 143(1) of the Act only certain adjustments can be made and allocation of rental income would not fall under such adjustment. He thus supported the orders passed by the learned CIT(A). 12. I have carefully considered the rival submissions and perused the record. These two are model cases which clearly highlight the casual approach of the Assessing Officer, the first Appellate Authority and the role played by the Tax Consultants while advising the assessees. While applying for PAN Card it is duty of the assessee to tick the status in which the assessee is likely to be assessed and if there is any dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee for AY 2010-11 (Jayesh P. Shah Others, HUF CIT(A)- 25, Mumbai). The chronology of events give an indication that the Tax Authorities are not thorough with the basic procedure of taxation with regard to the status in which they are assessable and issuance of PAN card, etc. might be part of the scheme of things as assisted by the Tax Consultants and tax payers. 13. In fact, in the case of Ritesh Ramesh Shah Others (pages 18 19 of paper book) the income tax computation shows the status as Firm whereas in the assessment order it was shown as Individual cancelling the PAN of individual and in its place mentioning the PAN designated for a Firm. I hope that the senior officers of the Income Tax department would properly monitor such silly mistakes and take appropriate action at their end so that the comedy of errors would not be compounded so as to compel the Tribunal to make adverse remarks on the Department as a whole. 14. However, the fact remains that as per the arguments advanced before this Bench, each of them has a specific share in the property. It is not known as to what is the common action taken by all of them together. There cannot be any dispute th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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