Ramaswamy Balasubramanya Vs ITO (ITAT Bangalore)
Return Filed Under Correct PAN Cannot Be Ignored Due to Duplicate PAN Issue-Bengaluru ITAT Deletes Section 69 Addition
The Bengaluru ITAT allowed the appeal of an individual taxpayer and deleted additions made under section 69, holding that the Revenue cannot ignore a return of income merely because it was filed under the taxpayer’s correct PAN while proceedings were initiated under an old PAN that the assessee had already sought to deactivate.
The assessee had purchased an immovable property worth ₹70 lakh, carried out equity share transactions and earned interest income. The case was reopened on the premise that no return of income had been filed. The assessee explained that his original PAN contained an incorrect date of birth, prompting him to apply for rectification. Due to a departmental error, two new PANs were issued. The assessee consistently used one of the new PANs for filing his return of income and had repeatedly requested the department to deactivate the old PAN. He also furnished copies of the return, bank statements, Form 26AS, Form 26QB, property purchase documents, share transaction statements and correspondence with the department.
The Tribunal found that the Assessing Officer as well as the CIT(A) completely ignored the documentary evidence uploaded by the assessee on the income-tax portal and wrongly proceeded on the assumption that no return had been filed. It held that once the return was filed under the correct PAN and the department had been informed about the duplicate PAN issue, it was incorrect to treat the investment in the property as unexplained under section 69. The source of investment stood duly explained through banking channels and was disclosed in the return of income.
The ITAT also deleted the additions relating to equity share transactions, observing that the Assessing Officer was not justified in disallowing the cost of acquisition and taxing the gross sale proceeds. Likewise, the addition of interest income was deleted since the income had already been disclosed in the return filed under the valid PAN. Accordingly, the Tribunal deleted all the additions and allowed the appeal in full.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 23/07/2025 in respect of the A.Y. 2016-17.
