Radical Fincap Pvt. Ltd. Vs ITO (ITAT Patna)
A Second PAN Does Not Invalidate Notices Under the First: ITAT Upholds Jurisdiction but Orders Fresh Assessments
Two PANs, One Assessee
The Patna Tribunal rejected a company’s challenge to reassessment notices issued under a PAN different from the one used for filing its returns. The decisive finding was that both PANs belonged to the same company, and the notices had been issued using its particulars in the PAN database.
However, the Tribunal separately restored the disputed additions of ₹1.91 crore and ₹70 lakh for fresh examination. The jurisdictional objections failed, while the merits required reconsideration after disclosure of the Revenue’s evidence and examination of the returns allegedly filed under the other PAN.
Investigation Information Leads to Reassessment
For assessment year 2013–14, the reassessment arose from information gathered during a search in the Dishmann Group. The investigation indicated the use of accommodation entries through entities allegedly operated by entry providers.
The Assessing Officer recorded that the assessee had received ₹1.91 crore from Subhlabh Commodeal Pvt. Ltd. and treated the receipt as a bogus accommodation entry. Proceeding on the basis that no return had been filed, he issued notice under section 148 on 31 March 2021 and ultimately assessed the amount under section 68.
For assessment year 2014–15, the investigation concerned high-value transactions through accounts allegedly used for layering funds and providing accommodation entries. The Assessing Officer treated ₹70 lakh received by the assessee as unexplained.
These were the Revenue’s allegations underlying the additions. The Tribunal did not finally endorse their correctness.
Company Challenges PAN and Territorial Jurisdiction
The notices for both years quoted PAN AABCG9672N. The assessee contended that its PAN was AABCG9810E, under which it had filed returns for the relevant years.
It explained that the company had originally been incorporated as Gainmore Savings Ltd. in Bihar on 9 September 1994. Its registered office subsequently moved to Yavatmal, Maharashtra, with effect from 7 March 2016, and its name changed to Radical Fincap Pvt. Ltd. from 29 July 2017.
On this basis, the assessee challenged the notices as having been issued under an invalid PAN and argued that the Assessing Officer at Chapra lacked jurisdiction.
It also disputed the additions as arbitrary and unsupported by proper enquiry. Alternatively, it requested restoration of the issues to the Assessing Officer for adjudication on merits.
Database Records Defeat the Technical Objection
The Tribunal found that the assessee had held two PANs. The Commissioner (Appeals) had recorded that PAN AABCG9672N was allotted on 30 September 2003, while PAN AABCG9810E was allotted on 27 October 2003.
Both PAN records contained the same company registration number. The Bihar address appearing against the PAN used for issuing the notices also belonged to the assessee. The corresponding address appeared in the other PAN’s records as well.
These findings were neither disputed nor controverted. The Tribunal therefore concluded that the PAN used by the Assessing Officer pertained to and belonged to the appellant.
It further found that the company had not intimated the Assessing Officer about its changes of name and address. Accordingly, notices issued using the company’s PAN database particulars were held valid.
Authorities Support Reliance on Recorded Address
The Tribunal relied on the Supreme Court’s decision in PCIT v. I-Ven Interactive Services Pvt. Ltd., concerning notice issued to the address available in the PAN database where the change of address had not been intimated to the Assessing Officer.
It also referred to the Kolkata Tribunal’s decision in Tarasafe International Pvt. Ltd. v. DCIT, supporting the validity of notices based on the assessee’s PAN particulars.
Applying these authorities to the undisputed database findings, the Tribunal upheld the Assessing Officer’s jurisdiction and the notices for both years.
Additions Require Fresh Examination
On merits, the Tribunal noted that the assessments had been completed ex parte and that the assessee had not furnished information addressing the additions before the Commissioner (Appeals).
Nevertheless, its claim of having filed returns under PAN AABCG9810E had not been considered. The Tribunal therefore set aside the assessments concerning the disputed additions and directed fresh adjudication after providing an opportunity of hearing.
The Assessing Officer must supply all relevant information and evidence for rebuttal. Enquiries may also examine the bank accounts involved and whether the transactions were disclosed in the claimed returns.
To avoid multiple proceedings, the Chapra Assessing Officer was directed to forward the material to the Assessing Officer handling PAN AABCG9810E. Both appeals were partly allowed for statistical purposes.
Author’s Comments
The ruling turns on verified identity: the challenged PAN belonged to the same company. It does not establish that any notice bearing an incorrect PAN is valid.
Equally, rejection of the jurisdictional objection did not establish the accommodation-entry allegations. Those require evidence, disclosure and examination of the assessee’s explanation.
The practical lesson is to maintain consistent PAN and jurisdictional records while recognising that procedural validity and substantive taxability are separate questions. The additions were remanded, not deleted on merits.
Cases Discussed
- PCIT v. I-Ven Interactive Services Pvt. Ltd., AIR 2019 SC 5561 (Supreme Court) — Relied upon for the validity of notices issued to the address recorded in the PAN database where the assessee had not intimated its changed address to the Assessing Officer.
- Tarasafe International Pvt. Ltd. v. DCIT (ITAT Kolkata) — Relied upon for the validity of notices issued on the basis of PAN database particulars. The source judgment does not specify its appeal number or date.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PATNA
These are the appeals preferred by the assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”] passed u/s 250 of the Act dated 13.11.2025 for the AYs 2013-14 & 2014-15, vide Appeal Nos NFAC/2012-13/10167077 & NFAC/2013-14/10167081 respectively.
2. These two appeals of the assessee related to AY 2013-14 and 2014-15 wherein the Assessing Officer had made addition of Rs. 1.91 crore and Rs. 70 Lakhs respectively which are under challenge.
3. For AY 2013-14, the Assessing Officer noted that M/s Gainmore Savings Ltd. (Now Radical Fincap Pvt. Ltd.) did not file return of income, hence, initiated proceedings u/s 148 narrating the following factual background:
“2.2 Search & seizure operations were carried out in Dishmann Group on 19.12.2019. Key persons of Dishmann Group i.e. Sri Chirag Thakkar (Accounts Manager), Sri Bharat P Padia (Executive Director of M/s DCAL) admitted that one accommodation entry provider Sri Rajiv C Shah was involved in the activity of providing accommodation entries in the form of cheque for cash and vice versa. Findings/documents of/found during search showed that cash was handed over by Dishmann Group to Sri Rajiv Shah and his cash handler cum employee Sri Anand Srimall to provide accommodation entries. Sri Rajiv Shah also admitted that he used coding in financial records maintained by him in order to record accommodation entries. His cash handler cum employee Sri Anand Srimall, Sri Keyur D Shah partner also admitted that Sri Rajiv C Shah is involved in providing accommodation entries of various types. Sri Rajiv C Shan, Sri Jeevan Jagatiya have operated many paper companies in order to provide accommodation entries. One of such companies is M/s Subhlabh Commodeal Pvt Ltd, 5 Western Street, Kolkata. It was found that the assessee received of Rs. 1,91,00,000/- from M/s Subhlabh Commodeal Pvt Ltd during the year. The AO noticed that above transaction is not disclosed by way of filing of return of income. Local enquiry reveals that the company was running on paper only. As there is no existence of company, the receipt of Rs 1,91,00,000/- is bogus accommodation entries provided by the company. Therefore, the case was reopened under section 147 of the Income Tax Act by issuing notice under section 148 of the Act on 31.03.2021, and the notice was duly served upon the assessee. In response to the notice under section 148, the assessee did not file return of income. Thereafter, the AO issued further notices under section 142(1) and show cause notices on various dates. Considering reply filed by assessee, the AO concluded that assessee failed to prove genuineness of amount received from M/s Sublabh Commodeal Pvt Ltd, made an addition of Rs. 1,91,00,000/- on account of bogus accommodation entry u/s 68. Accordingly, the AO completed the assessment under section 144 read with section 147 by assessing the total income at Rs. 1,91,00,000/-. Aggrieved with the assessment order, the appellant is in appeal.”
Similarly for AY 2014-15 the Assessing Officer had initiated proceedings, u/s 148 giving the following factual background:
“2.2 During the course of enquiry proceedings in the case of Shiba Sarees and related beneficiaries for FY 2013-14, DDIT (Inv.)Unit-2(1), Kolkata found that 27 поп-individual current accounts were opened during January 2012 to March 2013 in IDBI Bank, Kestopur, Koklata. He noticed high value transactions in the form of cash, RTGS/NEFT, clearing and intemal transfers. It was noticed that internal transfers were received from non-individual entities of same branch. It was further noticed that high value cash was deposited in non individual account which were immediately transferred to other non individual accounts. Such accounts noticed by DDIT were as follows; 1. M/s Fast speed Sarees Pvt Ltd (A/c No 0702102000002509), 2. M/s Galaxy Multicare services Pvt Ltd (A/c No 0702102000002653), 3.M/s Mangalamrashi vintrade Pvt Ltd (A/c No 0702102000002509) and 4.M/s Rudhramukhi builders Pvt Ltd (A/c No 0702102000002646). Summons were issued Perusal returns filed by these companies showed that but returned unserved. turnover, fixed assets, rent paid, PBT for Ays 13-14 and 14-15 were Nil. Summons were issued to even intermediary companies which were also returned unserved showing that all these companies were paper companies only created for the purpose of providing accommodation entries. It was noticed that the assessee company has received an amount of Rs. 70,00,000/- during the relevant financial year from paper companies used for layering and accommodation entries, the case was reopened.”
It is seen the Assessing Officer had issued notices to the assessee quoting the PAN No. AABCG9672N for both the years. It is the assessee’s contention that its PAN No. is AABCG9810E and that it has been filing the return of income for all the years with the PAN No. AABCG9810E. It was also represented that M/s Gainmore Savings Ltd. was a public limited company incorporated on 09.09.1994 having its registered office in the State of Bihar, which has undergone changes, that w.e.f 07.03.2016 its office was at Yavatmal, Maharashtra and that with effect from 29.07.2017 its name has been changed to Radical Fincap Pvt. Ltd. It was also submitted that the assessee company Gainmore Savings Ltd. filed its return of income for AY 2013-14 and 2014-15 with PAN No. AABCG9810E and that the return of income from AY 2017-18 onwards was filed in the name of Radical Fincap Pvt. Ltd. with the same PAN No. AABCG9810E.
4. The Ld. AR has raised various technical pleas challenging the validity of the assessment proceedings on the ground that the Assessing Officer had issued notice on the invalid PAN and that the jurisdictional Assessing Officer at Bihar did not have competent jurisdiction to issue the impugned notices and initiate proceedings. The Ld. AR also contended that the addition of Rs. 1.91 crores for AY 2013-14 and Rs. 70 Lakhs for AY 2014-15 was made in an arbitrary manner without proper enquiry and hence requested that the impugned addition for both the years deleted and the assessments set aside. Without prejudice, the Ld. AR represented that the issues may be set aside the Assessing Officer to decide on merit.
5. On the other hand the Ld. DR relied heavily on the orders of the lower authorities.
6. We have considered the rival submissions, perused the record and the written submission filed. It is seen that the assessee has been known by the names Gainmore Savings Ltd., Gainmore Savings Pvt. Ltd. and M/s Radical Fincap Pvt. Ltd. at different points of time. It has also changed its address at different points of times but has not intimated its jurisdictional Officer as to the change of address. It is not in dispute that the assessee M/s Gain More Savings Ltd, changed to Gain More Saving Pvt Ltd and currently changed to M/s Radical Fincap Pvt Ltd. It was having two PANs i.e. AABCG9810E and AABCG9672N. The Ld CIT (A) has given a categorical finding that the PAN number AABCG9672N whose data base details have been used by the Assessing officer to issue notices pertain to the assessee and was allotted to the assessee on 30-9-2003.Its registration number is recorded as 03-6083. The same registration number is recorded for the PAN AABCG9810E, and this PAN was allotted on 27-10-2003. The address Katahari Bagh Road More, Chapra, Saran, Bihar 841301, given in the PAN data for PAN AABCG9672N pertains to the assessee. Even for the PAN AABCG9810E, the residence was given as Katahari Bagh Road More, Chapra, Saran, Bihar 841301 and the same is still continued to be used for communication. None of these facts are disputed nor controverted by the appellant. Therefore, it is conclusive that the PAN AABCG9672N pertains and belongs to the appellant. Besides, the Assessing officer was not intimated till date of the change of name or change of address by the assessee company to various places at different points of time. We find that the notices have been issued to the assessee and to the address stated in PAN database. Therefore, the notices issued by the ITO ward 2(2), Chapra as per the PAN data base are held to be valid. The Hon Supreme Court in PCIT v I Venn Interactive Services Pvt Ltd [AIR SC 5561 (2019)] has upheld the validity of notice issued to the address available in the PAN database in the absence of intimation of change of address to the Assessing officer. Similarly, in the case of Tarasafe International P Ltd v DCIT, the Hon’ble ITAT Kolkata bench held that the notice issued on the basis of PAN data of the assessee is valid. In view of the above, we uphold the jurisdiction of the Assessing officer and the validity of the impugned notices issued for both the years.
7. Next issue to be decided is whether the impugned additions made by the Assessing Officer for these two years are justified. It is seen that the Assessing Officer had decided the issue in an ex-parte manner, for both the years. It is also seen that the assessee failed to submit any information on merit before the Ld. CIT(A). We also note that the contention that the assessee has filed the returns of income for the subject years under PAN AABCG9810E have not been taken for consideration. In view of this factual scenario, we consider it fit to set aside the impugned assessments for both the years and remit to the file of the Assessing officer for framing fresh assessments, in regard to the issues concerning the impugned additions, for both the years, after providing opportunity of hearing to the assessee. The Assessing officer shall provide to the assessee, all the information and evidence with him for the rebuttal and explanation of the assessee. The Assessing Officer may also make necessary inquiries as to the bank account through which the alleged transactions have been done and whether the same disclosed in the income tax returns of the assessee for the subject years filed under PAN AABCG9810E. The information available in returns of income said to be filed by the assessee for the subject year may be taken in to consideration by the Assessing Officer while finalizing the assessment. Further we note that the PANs of the assessee are lying in two locations. To avoid multiplicity of proceedings, we consider it fit to direct the Assessing Officer at Chapra, to forward all the information and evidence relating to the impugned additions to the Assessing Officer having PAN AABCG 9810 E for finalizing the set aside assessment in the manner stated above.
8. In the result, both the appeals of the assessee are partly allowed for statistical purposes.
Order is pronounced in the open court on 8th October, 2026
