Prakash Ramjibhai Nanda Vs ITO (ITAT Surat)
Summary: The Surat ITAT partly allowed the assessee’s appeal for statistical purposes and restored the dispute concerning the addition of Rs. 3,24,06,697/- representing total credits in the bank account to the Assessing Officer for proper verification. The assessee had filed a return of income on 06.10.2014 declaring total income of Rs.25,34,660/- under PAN AARPN1955G, while the reassessment proceedings and consequent addition were made under another PAN, ABYPN3360K, which the assessee stated had been obtained by mistake and for which an application for surrender had been made. The assessee contended that income relating to PAN AARPN1955G had already been offered and that the relevant transactions were reflected as turnover. The Tribunal noted that the assessee had admitted having two PANs, but found that it remained a matter of factual verification whether the second PAN had actually been operated, whether the surrender application was available with the Revenue, and whether the addition was in consonance with the assessee’s transactions. The Tribunal also noted that the HDFC Bank details had not been properly verified by the Assessing Officer or CIT(A). Accordingly, the order of the CIT(A) was set aside and the matter was remanded to the AO to verify the assessee’s utilisation of the two PANs, whether one PAN had been surrendered, whether the assessee was operating with two PANs and whether the addition was consistent with the underlying transactions, including consideration of any action concerning obtaining two PANs without informing the AO. The AO was directed to provide the assessee an opportunity of hearing in accordance with the principles of natural justice. The appeal was partly allowed for statistical purposes.
Prakash Ramjibhai Nanda Vs ITO (ITAT Surat)
Surat ITAT Restores ₹3.24-Crore Bank-Credit Addition: AO Must Verify Duplicate PAN, Surrender Application and Whether Deposits Were Already Disclosed as Turnover
The Surat ITAT restored the ₹3.24-crore addition representing total bank credits for fresh verification. The assessee explained that he had inadvertently obtained two PANs and had already filed his return and disclosed the relevant income under PAN AARPN1955G. The reassessment and addition were, however, made under the second PAN, ABYPN3360K, which the assessee claimed to have applied for surrender.
The Tribunal observed that neither the AO nor the CIT(A) had properly verified the HDFC Bank transactions, the alleged application for surrender of the duplicate PAN, or whether the disputed credits had already been recorded as business turnover under the operative PAN. These factual issues were essential to determine whether the addition amounted to taxing transactions already disclosed by the assessee.
Accordingly, the matter was remanded to the AO to verify the use of both PANs, the surrender application, the bank transactions and the correctness of the addition. The AO was also permitted to consider appropriate action for obtaining or operating two PANs, after providing the assessee a proper opportunity of hearing in accordance with the principles of natural justice. The appeal was partly allowed for statistical purposes.
List of Cases Discussed / Relied Upon
- GKN Drive Shaft (India) Ltd. Vs ITO,259 ITR 19 (2002) — cited by the assessee in relation to reassessment procedure and supply of material/reasons.
- Smt. Prameela Pasumarthi Vs. DCIT,(2025) 146 TLC 365:(2025) 180 taxmann.com 131 — cited on the issue concerning JAO and FAO jurisdiction in reassessment proceedings.
- Kankanala Ravindra Reddy Vs. ITO & 2 Others, Writ Petition Nos 25903 of 2023, dated 14.09.2023 — cited concerning issuance of reassessment notices by the JAO/FAO.
- Kolakaluru Primary Agricultural Cooperative Credit Society Limited Vs ITO,(2025) ITA No.456/Viz/2025 dated 05/12/2025 — cited concerning the JAO/FAO issue.
- Sanath Kumar Murali Vs. Income-tox Officer,[2023] 152 taxmann.com 231 (Karnataka)/[2023] 294 Taxman 80 (Karnataka)/[2023] 455 ITR 370 (Karnataka) — cited concerning the meaning of “income chargeable to tax” for reassessment purposes.
- Umaid Charitable Trust vs The Union Of India (Uoi) And Ors.,2008 207 ITR 226 (Raj) — referred to in the supplied authorities concerning Section 80G.
- World Sankirtan tour Trust vs CIT(E),ITA No.1462 & 1463/CHD/2025 order dated 22.07.2026 — cited concerning whether the activities of a trust could be treated as religious.
FULL TEXT OF THE ORDER OF ITAT SURAT
The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 04.07.2024 for the Assessment Year (in short “AY”) 2014-15.
2. The assessee has raised the following grounds of appeal:
“1. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming reassessment proceedings u/s 147 of the IT Act, 1961.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing order without providing enough opportunities.
3. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in not passing speaking order.
4. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing order without considering detailed set of documents filed during course of appellate proceedings.
5. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming addition of Rs. 3,24,06,697/- being total credit side in bank account ignoring the fact that the same is already shown as turnover.
6. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in not adjudicating alternate submission to consider peak credit.
7. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in directing assessing officer to impose penalty u/s 272B of the Act.
8. It is therefore prayed that the above addition/disallowance made by the assessing officer may please be deleted.
9. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal”
3. The assessee filed return of income on 06.10.2014 declaring total income of Rs.25,34,660/- under the PAN: AARPN1955G. There was an information received by the Department that the assessee has deposited cash of Rs.10,50,000/- in HDFC Bank and earned commission income of Rs.3580 during the year under consideration. The Assessing Officer (in short “the AO”) observed in the assessment order that the assessee did not file the return of income for the A.Y. 2014-15. The query letter was issued on 25.02.2019 which was not responded by the assessee. The assessee’s case was reopened u/s 147 of the Income Tax Act, 1961 (in short “the Act”). After recording reasons and taking approval from the appropriate authority, notice u/s 148 of the Act was also issued to the assessee on 29.03.2019. In response to the said notice the assessee submitted that the assessee had two PANs at the time of filing the return, one with PAN as AARPN1955G and the other with PAN ABYPN3360K. The assessee did not make any transaction in other PAN ABYPN3360K. The assessee submitted that the assessee made application for surrender of PAN ABYPN3360K. After taking cognizance of the assessee’s reply the AO observed that the assessee has not filed the return of income in response to notice u/s 148 of the Act or till the finalization of the assessment order. Therefore, the AO made addition of Rs.3,24,06,697/- treating the said deposits as undisclosed.
4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
5. The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the assessee had by mistake taken two PAN numbers and already offered income in respect of PAN No.AARPN1955G. The assessee vide letter dated 01.05.2019 submitted before the AO that an application for surrender of the PAN No.ABYPN3360K under which the assessment order was passed was surrendered through application but the status is not known to the assessee. Therefore, the assessee submitted that the matter may be remanded back to the file of the AO.
6. The Ld. Departmental Representative (in short “Ld. DR”) submitted that the assessee has not brought on record the application for surrender and therefore the assessee was very well aware about the said transaction but has not given any explanation to the AO except the letter dated 01.05.2019. The Ld. DR submitted that the AO as well as the CIT(A) has rightly made the addition.
7. The Ld. AR submitted that the HDFC details related to bank deposits were not verified by the AO as well as by the CIT(A).
8. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee has admitted that at one point of time the assessee was having two PANs but it is a matter of fact for verification whether the assessee was operating the said second PAN number. The AO has also not commented and verified the details related to the surrender whether is available with the Revenue was also not commented. These factual aspects need verification and proper adjudication. Therefore, we find it fit to remand back this matter to the file of the AO for proper verification of the assessee’s utilization of two PANs, whether there was any surrender of one PAN and if the assessee is operating with two PANs whether the addition is in consonance with its transactions or not. These aspects to be verified by the AO and adjudicate the issue accordingly including that of any action to be taken in respect of obtaining two PANs by the assessee without informing the AO. Needless to say the assessee be given opportunity of hearing by following principles of natural justice.
9. In result, the appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the open court on 25.08.2026
