2025 (4) TMI 82 - AT - Income Tax

Reopening of the assessment proceedings u/s 147 using the old PAN number when the assessee had already obtained a new PAN and filed returns accordingly - HELD THAT - We find the CIT(A) gave relief to the assessee on verifying the PAN data of the assessee and information of change in the PAN is in the knowledge of the department. Further for the A.Yrs. 2015-16 and 2018-19 the similar contentions putforth by the assessee have been accepted by the department. The communication regarding cancellation of the old PAN has also been made by the assessee which the Assessing Officer has not carried out. It is also a fact that on new PAN the assessee is filing the regular income-tax returns. CIT(A) held that reopening of assessment proceedings is not in accordance with the provisions of the Act. Appeal of the Revenue is dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in the judgment include:

• Whether the reopening of the assessment proceedings under Section 147 of the Income-tax Act, 1961, using the old PAN number was valid when the assessee had already obtained a new PAN and filed returns accordingly.
• Whether the CIT(A) erred in providing relief to the assessee without affording the Assessing Officer (AO) an opportunity to address the additions made during the assessment.

ISSUE-WISE DETAILED ANALYSIS

Reopening of Assessment Proceedings under Incorrect PAN

• Relevant Legal Framework and Precedents: The reopening of assessment proceedings is governed by Section 147 of the Income-tax Act, 1961, which allows for reassessment if the AO has reason to believe that any income chargeable to tax has escaped assessment. The procedural requirements include proper notice and adherence to the correct PAN details.
• Court's Interpretation and Reasoning: The Tribunal examined the facts that the assessee had informed the department about the cancellation of the old PAN and the issuance of a new PAN in April 2015. The CIT(A) found that the reopening of assessment using the old PAN was not in accordance with the provisions of the Act, as the department had knowledge of the new PAN and the assessee had been filing returns under it.
• Key Evidence and Findings: The assessee provided documentation showing that the old PAN was canceled and a new PAN was obtained. The Tribunal noted that similar contentions were accepted by the department for other assessment years, and the communication regarding the cancellation of the old PAN was made by the assessee.
• Application of Law to Facts: The Tribunal applied the provisions of Section 147 and concluded that the reopening of assessment proceedings under the canceled PAN was improper, as the department was aware of the new PAN and the assessee's compliance in filing returns under it.
• Treatment of Competing Arguments: The Revenue argued that the CIT(A) erred by providing relief without allowing the AO to address the additions. However, the Tribunal found no contrary material from the Revenue to challenge the CIT(A)'s findings.
• Conclusions: The Tribunal upheld the CIT(A)'s decision, finding that the reopening of assessment proceedings under the old PAN was not justified.

Opportunity for AO to Address Additions

• Relevant Legal Framework and Precedents: The principles of natural justice require that both parties have an opportunity to present their case. The Revenue contended that the CIT(A) failed to provide the AO with such an opportunity.
• Court's Interpretation and Reasoning: The Tribunal found that the CIT(A) had adequately considered the evidence and submissions presented by the assessee, and the AO had previously been informed of the PAN change and the related facts.
• Key Evidence and Findings: The Tribunal noted that the CIT(A) had verified the PAN data and the department's knowledge of the PAN change, which was crucial in determining the validity of the reopening of assessment.
• Application of Law to Facts: The Tribunal concluded that the CIT(A) acted within its jurisdiction by evaluating the evidence and providing relief based on the facts presented.
• Treatment of Competing Arguments: The Tribunal addressed the Revenue's concerns by emphasizing the lack of new evidence or contrary material from the Revenue to dispute the CIT(A)'s findings.
• Conclusions: The Tribunal found no infirmity in the CIT(A)'s order and dismissed the Revenue's appeal.

SIGNIFICANT HOLDINGS

• Preserve verbatim quotes of crucial legal reasoning: The Tribunal held that "in the absence of any contrary material brought to our notice by the Revenue, we are disinclined to hold that the impugned order suffers infirmity and therefore no interference is called for."
• Core principles established: The decision underscores the importance of adhering to procedural requirements when reopening assessments, particularly regarding the correct PAN and the department's awareness of any changes.
• Final determinations on each issue: The Tribunal affirmed the CIT(A)'s decision, concluding that the reopening of assessment under the old PAN was invalid, and dismissed the Revenue's appeal.