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2015 (12) TMI 1077 - GUJARAT HIGH COURT

2015 (12) TMI 1077 - GUJARAT HIGH COURT - TMI - Existence of partnership firm - AOP - PAN issued - Held that:- The insistence of the Department, however, on the firm filing return since the PAN was issued on the name of the firm does not appear to be valid. Even according to the Department, no such partnership firm existed. Merely because PAN was issued by the Department erroneously, there cannot be any insistence that return should be filed in the same capacity. Erroneous description in the PAN .....

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2-2015 - Akil Kureshi And Mohinder Pal, JJ. For the Appellant : Jaimin A Gandhi, Adv For the Respondent : Mr Sudhir M Mehta, Adv JUDGMENT ( Honourable Mr. Justice Akil Kureshi ) 1. Petitioners have challenged an order dated 16.10.2014 as at Annexure-A to the petition passed by the Commissioner of Income Tax on application dated 19.02.2014 filed by the petitioners. 2. Brief facts are as under: Petitioner No.1 is an association of persons ("AOP" for short). Petitioners No.2 to 9 are memb .....

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ot take any steps to get the PAN corrected for a long time. Under a belief that AOP is not required to file returns, for several years the petitioner did not file income-tax returns. The petitioner, however, received notice on 13.10.2011 from the Department insisting that the partnership firm should file returns. After some correspondence, the petitioners applied to the Commissioner of Income Tax on 19.02.2014 pointing out that the PAN was applied by the AOP with supporting documents, but was is .....

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officer, ward-4, he had to file his Return Of Income in the status of firm which may please be appreciated. Sir, the assessee filed his Return of Income as a firm as the coparceners of the AOP were not given the due credit of T.D.S. deducted against their proportionate income of AOP offered for taxation in their returns of individuals and to respond the letters of assessing officer, ward-4 which were issued to the assessee being a 'NON-FILER' of the same. Sir, the status of Return of Inc .....

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t was this application which the Commissioner rejected by the impugned order on 16.10.2014. After quoting sub-section (1) of section 119 of the Income Tax Act, observed as under: "Therefore, no action can be taken by the CIT, Valsad under the provision of this section. 3. It is observed that the PAN for the AOP has been obtained in the year 2011 pertaining to A.Y.2012-13 and therefore, the AOP was not in existence prior to this assessment year. Similarly, the returns filed by the firm canno .....

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s 2009-10 to 2011-12. 4. However, the ITR filed by the AOP for the A.Y.2012-13 may be processed by the Assessing Officer. Necessary instructions are being issued to the Assessing Officer in this regard." 4. Learned counsel Mr.Gandhi for the petitioners vehemently contended that the authorities committed serious error in not recognizing the error committed by the Department while issuing PAN in favour of the firm when no such application was ever made. He submitted that this is a clear case .....

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eting Corporation v. DCIT. 5. Counsel submitted that in absence of necessary correction in PAN, the Department is insisting that the firm should file returns when no firm ever existed and the members of AOP are denied the benefit of TDS by the income tax authorities. 6. On the other hand, counsel Mr.Sudhir Mehta for the Department opposed the petition contending that for years together the petitioners did not take any steps for getting the PAN corrected. Valsad Commissioner had no authority to g .....

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itioner No.1- AOP did not file any returns. We are informed that the other petitioners, i.e. the members of the AOP, had shown proportionate income in their income tax returns. The petitioners thereafter also did not apply for nearly two and a half years. It was only on 19.02.2014 that the petitioners made a request for giving suitable directions. 8. For severals reasons, the prayers made in the petition cannot be granted. First and foremost, the PAN was issued way back in the year 2005 on an ap .....

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dly filed, following observations were made to safeguard against undue relaxation of such powers in routine manner: "16. …..Before proceeding further we may caution that undoubtedly such powers are not to be exercised in a routine manner to extend limitation provided by the Act for various stages. We are conscious that such routine exercise of powers would neither be expedient nor desirable, since the entire machinery of tax calculation, processing of assessment and further recoverie .....

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