Return not filed due to wrong categorisation of PAN: HC quashes order & allows return filing

Thiruvanmiyur Milk Consumer’s Co-operative Society Limited Vs Assessing Officer (Madras High Court)

Thiruvanmiyur Milk Consumer’s Co-operative Society Limited has contested assessment orders and penalty notices, citing violations of natural justice. The High Court intervened in light of the incorrect categorization of the society’s PAN, enabling the society to rectify the error and file returns.

Key Points:

• The petitioner, a Co-operative Society, highlighted the issuance of an erroneous PAN (AACCT9874A), leading to misclassification as a company by the Income Tax Department. This classification hindered the filing of returns from assessment year 2013-2014 to 2018-2019, depriving the society of exemption benefits.
• Rectification was sought, resulting in the acquisition of the new PAN (AAGAT8456Q), enabling electronic filing of returns for the relevant assessment years.
• The court observed that the assessment orders stemmed from the society’s failure to file returns due to the PAN anomaly. With the issuance of the corrected PAN, the society could now fulfill its filing obligations.
• Consequently, the High Court quashed the impugned assessment orders and associated penalty notices, remanding the matter to the assessing officer for reconsideration.
• The society was directed to electronically file returns for assessment years 2013-2014 to 2017-2018 within two weeks from receipt of the court’s order.
• The assessing officer was instructed to provide a reasonable opportunity for the society, including a personal hearing, and to issue fresh assessment orders within three months of receiving the returns.

Conclusion: The intervention of the High Court rectified the erroneous categorization of the society’s PAN, enabling it to fulfill its filing obligations. The directive to file returns and the quashing of assessment orders underscore the court’s commitment to upholding principles of natural justice and facilitating compliance with tax regulations for cooperative societies.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

In all these four writ petitions, the respective assessment order and the consequential penalty orders are challenged on the ground of breach of principles of natural justice.

2. The petitioner asserts that it is a Co-operative Society; that PAN AACCT9874A was issued erroneously and that, therefore, the petitioner was classified as a company in the records of the Income Tax Department. By further asserting that the petitioner was unable to file its returns from assessment year 2013-2014 to assessment year 2018-2019 and avail exemption because of the above error, the respective assessment orders are assailed.

3. Learned counsel for the petitioner submits that rectified PAN AAGAT8456Q was obtained by surrendering the old PAN and that, therefore, the petitioner is now in a position to file returns for assessment years 2013-2014 to 2017-2018 electronically.

4. Mr. R.S.Balaji, learned senior standing counsel for the respondent, also confirms that the petitioner has obtained the new PAN and should be directed to file returns electronically using the new PAN.

5. On perusing the impugned assessment orders, it is evident that such orders were issued because of non compliance by the petitioner in filing the returns of income pertaining to the Co-operative Society. From the averments in the affidavit and the submissions of learned counsel, it is evident that such returns could not be filed in view of the issuance of a PAN for a limited company to the petitioner instead of issuing the PAN for a Co-operative Society. Subsequently, this anomaly was rectified by issuing PAN AAGAT8456Q to the petitioner. As a corollary, the petitioner is now in a position to file returns electronically for assessment years 2013-2014 to 2017-2018. In order to provide an opportunity to the petitioner to file such returns, the impugned orders are liable to be interfered with.

6. For reasons set out above, the assessment orders and consequential penalty orders impugned in these writ petitions are quashed and the matter is remanded for reconsideration by the assessing officer. The petitioner is directed to file returns of income pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 within a maximum period of two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including personal hearing, and issue fresh assessment orders within a period of three months from the date of receipt of returns of income from the petitioner.

7. The writ petitions are allowed on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.