TMI Blog2022 (5) TMI 1159X X X X Extracts X X X X X X X X Extracts X X X X ..... e Polytechnic, the writ-applicant Society appears to be an assessable entity. The Polytechnic is an entity which is run and managed by the writ-applicant Society, and hence, it is a part of the writ-applicant Society and cannot be considered as a separate assessable entity in the eyes of law under the Income Tax Act. (ii) The writ-applicant Society i.e. Sardar Vallabhbhai Patel Education Society has included all the transactions carried out by the Polytechnic including the transactions carried out with the Bank of Baroda. (iii) The writ-applicant Society for the relevant assessment years has included the above transactions in its return of income. (iv) The allegation of the respondent that the Polytechnic has filed its return of income for the Assessment Years 2005-06 to 2007-08 has been denied in clear terms and the said denial is also supported by the documentary evidences showing that even in the Assessment Years 2005-06 to 2007-08, that the writ-applicant Society i.e. Sardar Vallabhbhai Patel Education Society has included the income of the Polytechnic in its return of income, and therefore, the question of filing a separate return in the name of the Polytechnic does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing orders of assessment. 2. According to the writ-applicant, the various educational institutions run by the society would receive sizable amounts by way of cash through fees paid by the students. Only in order to maintain the separation of funds, N.G.Patel polytechnic desired to open a bank account. According to the counsel for the writ-applicant, bank insisted on a separate Permanent Account Number ('PAN' for short) of the customer only upon which a separate account can be opened. N.G.Patel polytechnic therefore applied for PAN which was duly issued by the Income-tax department which eventually led the N.G.Patel polytechnic to open a savings bank account with Bank of Baroda. In such bank account, the N.G.Patel polytechnic had deposited cash of Rs.2.37 crores (rounded off) during the period relevant to assessment year 2009-10. According to the writ-applicant, the writ-applicant society had filed the return of income for the said assessment year 2009-10, in which, this receipt was reflected. Along with the return, necessary accounts and other documents were produced. The return was accepted by the Assessing Officer without scrutiny. 3. The Assessing Officer no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any information which may be useful for or relevant to the purposes of the Act, may by notification require any class or classes of persons who shall apply to the Assessing Officer for the allotment of the PAN. Under sub-section (2), the Assessing Officer having regard to the nature of transactions as may be prescribed, may also allot a PAN to any other person following the prescribed procedure. Sub-section (3) of section 139A provides that any person not falling under subsection (1) or sub-section (2), may also apply to the Assessing Officer for allotment of PAN, upon which, the Assessing Officer shall allot the same. 7. It can thus be seen that mere allotment of PAN under section 139A of the Act would not make the allottee necessarily a separate entity for the purpose of assessment of tax. The statute recognizes certain eventualities where quite outside the requirement of payment of tax and for filing return of income, the Assessing Officer may allot a PAN to individual. The contention of the Assessing Officer therefore that merely because N.G.Patel polytechnic had obtained the PAN, it was a separate entity for the purpose of filing of the return and assessment of tax was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-applicant which are already on record and additional objections if so raised in terms of above para (i). (iii) For such purpose, impugned order dated 29.08.2016 is set aside. 9. Till the Assessing Officer passes a fresh order disposing of the objections of the writ-applicant, interim relief granted pending the petition directing the Assessing Officer not to pass the final order on assessment shall continue. 10. Petition is disposed of. 4. The writ-applicant is a Trust running various educational institutions which include N.G. Patel Polytechnic (for short, the Polytechnic ). For the Assessment Year 2009-10, the writ-applicant- Trust filed its return of income on 07.09.2009, declaring expenditure over income/ loss at Rs.1,47,72,438/-. The aforesaid income/loss includes income/loss from three institutions run and managed by the writ-applicant Trust, which are as follows: (i) Enviro Consultancy Service Division (ii) N.G. Patel Polytechnic (iii) S.V.P. Education Society 5. The gross total income as per the Income and Expenditure Account of the Polytechnic is of Rs.2,87,73,183/- and the expenditure is of Rs.2,98,66,920/-. The Polytechnic received t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction of deposit of cash being the amount of tuition fees received from the students throughout the year, whether the said had duly been recorded in the audited books of accounts of the writ-applicant Trust, and accordingly, shown in the return of income filed by the writ-applicant Trust. 7. Despite the directions issued by this Court in the order dated 11.09.2017 (order of first round of litigation) to dispose of the objection in an objective manner, the respondent, without following the directions of this Court in true letter and spirit, has disposed of the objections by stating that the matter is required to be examined with reference to the books of accounts and the banking transactions. This Court, while admitting the present writ-applications, in its order dated 21.11.2017, in para 2, has observed the same, which reads thus : 2. Having perused the order rejecting the objections, it appears that the Assessing Officer has not taken into consideration the observations made by this court in its judgment and order dated 11.09.2017, while remanding the matter to the Assessing officer for deciding the objections afresh. 8. It is to be noted here that the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h legally and factually that the Polytechnic is a separate assessable entity under the Income Tax Act. The respondent, without coming to a conclusion that the Polytechnic is a separate assessable entity, tried to justify the reopening notice issued u/s.148 in the name of the Polytechnic. It is most humbly submitted that no valid proceeding u/s.148 can be initiated by issuing a notice on a person who is not assessable as a distinct person under the Income Tax Act. The allegation of the respondent that the writ-applicant has filed return of income in its alleged PAN for the Assessment Years 2005-06 to 2007-08, was clearly denied by the writ-applicant in its affidavit. The writ-applicant further in its affidavit, attaching the relevant documents, in the form of Return of Income, Computation of Income and Audit Report for the Assessment Years 2005-06, 2006-07, 2016-17, 2017-18 and 2018-19 (alongwith Section 143(3) assessment order), clearly demonstrated that the writ-applicant Society has included the income of the Polytechnic in its books of accounts and the income tax return for the above mentioned assessment years, and hence, the question of filing the income tax return on the PAN o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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