9911796707
TMI Blog2025 (5) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... tails as per notice issued u/s 142(1) vide order dated 10.03.2018. It was submitted that the assessee firm was earlier functioned under partnership of three partners as per the partnership deed executed on 01.04.2015 and subsequently fourth partner inducted in the firm and new partnership deed was executed on 01.04.2016. It was submitted that a new PAN was applied for the reconstituted firm. The new PAN acquired by the firm is AATFR8392R and the old PAN was AASFR3224K. The Assessing Officer observed that the assessee has not stated as to why a new PAN was applied in the firm inspite of the fact that there is no change in the name and status of the firm. Further he observed that assessee has filed letter for cancellation of the old PAN only on 07.03.2018. No explanation was given by the assessee in this regard during the assessment proceedings. He further observed that the assessee firm has opened new account in the State Bank of India and deposited substantial cash in the abovesaid accounts. The Assessing Officer has reproduced the details of cash deposited in the abovesaid account during demonetization period in his order. The Assessing Officer observed that assessee has filed ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 was dispatched to the appellant on 17.01.2020 and served upon the successor firm on 18.01.2020, rendering the order under appeal as illegal. 3. That the Ld. CIT(A) has erred in law and facts of the case by upholding the validity of the assessment order when the same is illegal as the same has been passed against non-existent person, as the firm M/s Rang Mahal having the PAN under reference stood discontinued w.e.f. 01.04.2016 and new firm under the same name came into existence w.e.f. said date under PAN number AATFR8392R and intimation of cancellation of old PAN was also duly' filed on 07.03.2018 before the ld. A.O. 4. That the Ld. CIT(A) has erred in law and facts of the case by confirming the impugned addition of Rs. 21,88,200/-, as the same is inconsistent with the facts of the case and the same has been made without considering the submissions of the appellant in the right perspective." 5. At the time of hearing, ld. AR of the assessee did not press ground no.1. With regard to other grounds, he submitted as under :- "Ground No.2 has been raised challenging the validity of the assessment order under consideration as the same was barred by limitation as provided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip deed dated 01.04.2016 and new PAN i.e., MTFR8392R, was obtained. Copies of the said partnership deed and PAN card are placed at page nos. 243 to 248 of the paper book. 3. The above noted change was duly notified to the assessing officer vide letter dated 28.02.2018 (filed on 07.03.2018). Copy of said letter placed at page no. 198 of the paper book. The change was also notified to the banker vide letter dated 03.05.2016. Copy of the said letter is placed at page no. 248 of the paper book. 4. In terms of the provisions of sec. 187 of the Act, in the case of change in constitution of partnership firm, any assessment made after the date of change, has to be made on the newly constituted firm. The order under appeal ought to have been passed on the new firm having PAN - MTFR8392R, hence order on PAN of non-existent entity is illegal. 5. The appellant relies upon the following judicial pronouncements: - * DCIT vs. Sterlite Technologies Ltd. (2024) 158 taxmann.com 142 (SC) * PCIT Vs. Maruti Suzuki India Ltd. (2019) 107 taxmann.com 375 (SC) 6. In view of the above submissions the order under appeal deserves to be quashed on this issue alone. Ground No.4 has been raised cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 70,700/-, was deposited in valid currency. Copies of deposits slips are placed at page Nos. 258 to 265 of the paper book. 10. In view of the above, the addition under consideration deserves to be deleted on merits. Additional Ground: The appellant has raised the said ground challenging the action of the Ld. AO and Ld. CIT(A) of applying 60% tax rate as provided u/s 115BBE as the same was brought into the statues w.e.f. 15.12.2016, and hence is not applicable on transactions prior to that date. 1. In this regard, we place reliance on the judgment of the Hon'ble Madras HC in the case of SMILE Microfinane Ltd. W.P. (MD) No. 2078 of 2020. Copy of the said judgment is enclosed along with these submissions. 6. On the other hand, ld. DR of the Revenue brought to my notice page 5 of the assessment order and brought to my notice findings of the Assessing Officer. He submitted that assessee has taken new PAN without there being any necessity and deposited huge cash in both the accounts maintained by the assessee with State Bank of India and deposited cash during demonetization period. He brought to my notice that assessee has deposited old denomination of currency i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. The above facts were brought to the notice of the lower authorities and they were focused only on the aspect that assessee has taken new PAN without there being any necessity and they doubted the actions of the assessee and rejected the explanation given by the assessee on the basis that assessee has deposited cash during demonetization period. The views of the tax authorities, we may have accepted if the assessee has opened new account as well as new PAN after the declaration of demonetization or few months earlier. That is not the case here. We observed that the reconstituted firm was continued with the business w.e.f. 01.04.2016 and all the transactions were properly recorded in its books of account and assessee has also established that there is a source for cash deposits during the demonetization period. It is also brought on record to my notice pages 95 to 115 of the paper book i.e. during the period 08.11.2016 to 31.12.2016, the assessee has enough cash balance in its books of account to deposit old denomination of currency as well as new denomination of currency. Therefore, the assessee has enough source of cash deposit during the demonetization period. The lowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
