The case revolves around the issuance of a new permanent account number (PAN) card to an assessee by mistake, and the subsequent cancellation of the new card upon the assessee’s request. The issue arises when the assessee is served with a show-cause notice alleging that he made transactions using the cancelled PAN without disclosing them to the Income-tax Department. During the proceedings, the old PAN is cancelled and the new one is activated, leaving the assessee in a difficult position as to which PAN to use for future transactions and income tax returns.
The court is approached seeking directions to cancel the new PAN and activate the old one so that the assessee can file income tax returns for the current financial year. However, the court observes that the old PAN has been deactivated, and the new one, which was cancelled earlier, has been activated for the proceedings under Section 148 of the Income-tax Act, 1961. The court notes that using the cancelled PAN could lead to complications in the future.
The court opines that this is a complex issue that needs to be examined by the Commissioner. The Commissioner needs to consider the practical problem being faced by the assessee and the complications that might arise in the future while filing income tax returns and quoting the wrong PAN. The Commissioner should decide which PAN to use for future transactions and income tax returns.
The court also observes that the assessee must file income tax returns for the current and previous financial years for which he must have a PAN. As the old PAN has been deactivated and the new one has been activated, the Commissioner’s decision on which PAN to use will be crucial.
The respondents had issued a show-cause notice to the assessee under Section 148A(b) of the Income-tax Act, 1961, alleging that he made transactions using the cancelled PAN without disclosing them to the Income-tax Department. The assessee submitted a reply to the show-cause notice, but the matter remained unresolved as the Commissioner needed to examine the issue and take a decision.
In summary, the court directs the Commissioner to decide which PAN to use for future transactions and income tax returns, taking into consideration the practical problem faced by the assessee and the complications that might arise in the future. The court also observes that the assessee must file income tax returns for the current and previous financial years for which he must have a PAN. As the old PAN has been deactivated and the new one has been activated, the Commissioner’s decision on which PAN to use will be crucial. Finally, the court notes that the cancellation of the new PAN was done upon the assessee’s request, and he had not used it for any transactions or income tax returns.
Ramchandra Haryani v. UOI (2022) 218 DTR 258 /328 CTR 1085 (2023) 450 ITR 250 (MP)( HC)
