Mitesh Suresh Shah Vs ITO (ITAT Mumbai)
PAN Misuse Allegation – ITAT Remands Matter to Verify Police Report; Relief Possible if Misuse Proven
Assessee challenged additions of ₹71.05 lakh u/s 68 and ₹98,500 u/s 69 arising from alleged share transactions, contending that his PAN was misused by another person (namesake from Nagpur) and that he had never undertaken such transactions.
The matter had earlier reached the Bombay High Court, which noted that in AY 2015–16, the AO himself accepted (based on police enquiry) that PAN was misused and no addition was made. Considering similar facts for AY 2016–17, the High Court granted relief and allowed the assessee to pursue appeal before ITAT.
Before ITAT, assessee relied on earlier year findings and police enquiry indicating misuse of PAN. However, Tribunal observed that:
- Though earlier year assessment refers to police enquiry report, the same was not placed on record for current year
- Verification of such report is crucial to determine genuineness of assessee’s claim
ITAT held that:
- If PAN misuse is established, additions cannot be sustained
- But factual verification is necessary
Accordingly:
- Matter remanded to AO to verify police enquiry report
- If report supports PAN misuse for relevant year – additions to be deleted
FULL TEXT OF THE ORDER OF ITAT MUMBAI
