Case Law Details
Anathi Hanumegowda Vijay Kumar Vs ITO (ITAT Bangalore)
Wrong PAN, Wrong Addition: ITAT Deletes ₹2.35 Crore Addition Made on Area Manager for Company’s Bank Account Transactions
The Bangalore ITAT granted relief to an employee of Manappuram Finance Ltd. after finding that cash deposits of ₹2.35 crore were wrongly attributed to him merely because the bank had reported his PAN in the Statement of Financial Transactions (SFT), even though the bank account belonged to the company.
The assessee was treated as a non-filer and reassessment proceedings were initiated based on information that ₹2.35 crore had been deposited in a bank account linked to his PAN. Since the Assessing Officer was not satisfied with the explanation regarding the source of deposits, the entire amount was added as income in a reassessment completed under sections 147 and 144. The CIT(A) confirmed the addition.
Before the Tribunal, the assessee explained that he was an Area Manager of Manappuram Finance Ltd. and that the bank account in question belonged to the company. Under an internal resolution, area managers were authorised to operate company bank accounts as joint signatories, and their PAN details were furnished to the bank only for operational purposes. The assessee produced a certificate from Federal Bank admitting that the SFT had been incorrectly reported using the PAN of the area manager instead of the PAN of Manappuram Finance Ltd. The bank further confirmed that all transactions in the account belonged to the company and not to the assessee.
The Tribunal found merit in the explanation and noted that the account stood in the name of Manappuram Finance Ltd., while the assessee was merely one of the authorised operators. It also took note of the bank’s admission of error and the company’s confirmation that the transactions belonged to it. The Tribunal held that the deposits represented the accounted business transactions of the company and not the assessee’s unexplained income.
Accordingly, the Tribunal directed deletion of the addition in the hands of the assessee, while granting liberty to the Assessing Officer to verify the relevant bank account and supporting certificates from Manappuram Finance Ltd. if considered necessary. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 3152/Bang/2025 is filed by Sri Anathi Hanumegowda Vijay Kumar[ the Assessee/ Appellant] for assessment year 2017 – 18 against the appellate order passed by National Faceless Appeal Centre Delhi (the learned CIT – A) dated 23 October 2025 wherein the appeal filed against the reassessment order passed under section 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 [the Act] by the National Faceless Assessment Centre Delhi (the ld. AO) was dismissed. Therefore, the assessee is in appeal before us.
2. Briefly stated the facts of the case shows that assessee is an individual who deposited an amount of ₹ 23,522,118/– into the bank account No. 961 as per the information received by the ld. AO. As the assessee is a non-filer, a notice under section 148 of the Act was issued to the assessee on 26thof March 2021.
The assessee did not file any return of income in response to that notice. Therefore, notice under section 142 (1) of the Act was also issued to the assessee calling for the information, and the assessee responded by filing partial information. Therefore the ld. AO proceeded to pass the best judgement assessment under section 144 of the Act. The AO further issued a final show cause notice on 24th of March 2022 which was replied by the assessee on 25th of March 2022. The ld. AO found that contention of the assessee is not acceptable because whatever is stated by him has not been substantiated the source for the deposit to the bank account during the year with any documentary proof and evidence even after providing reasonable opportunity to him. The assessee stated that deposits do not belong to him and in support of his claim has provided a copy of the letter from his employer but has not disclosed the source for the cash deposits into the bank account as on that date. Therefore the ld. AO proceeded to pass an assessment order under section 147 r.w.s. 144 r.w.s. 144B of the Act on 29th of March 2022 determining the total income of the assessee at ₹ 23,522,118/–.
3. The assessee aggrieved with the same preferred an appeal before the learned CIT – A. In the statement of the facts, it was stated that the credits in the bank account related to the daily business collection of his employer and as a capacity for a junior officer he provided his permanent account No. [PAN] and documentary proof of the same. Thus, according to him, the sum deposited in the bank account belongs to his employer and not to him. During hearing also, the assessee made similar submissions. The learned CIT-A did not believe the submission and confirmed the addition.
4. The assessee is in appeal before us.
5. The facts stated before us shows that the assessee was working with M/s. Mannapuram Finance Limited and further claimed that the deposits to the tune of ₹ 23,522,118 relating to the daily collection of Mannapuram Finance Ltd which was deposited into his bank account and thereby claimed that the same as attributable to cash deposit of his employer Mannapuram Finance Limited. However, as the assessee could not substantiate the source of said cash deposited with reconcilable supporting proof as attributable to such daily collection of his employer as deposited by him into his bank account, the addition was confirmed.
6. The ld. AR submitted that the bank account with the Federal Bank is of Mannapuram Finance Ltd., however as he is the joint account holder, the addition has been made in the hands of the assessee because of the wrong transaction statement [ STF] filed by the bank where Pan of assessee is mentioned instead of mannapuram Finance Limited. The ld. AR further referred to the statement made by Federal Bank Ltd. on 18th April 2024 wherein it was stated that that cash transaction conducted in the account in the name of Mannapuram Finance Limited however in the statement for financial transaction the Bank has reported the details of cash deposits and cash withdrawal in account maintained by Mannapuram Finance Ltd on various dates for financial year 2017 – 18 mentioning the PAN of the Assessee, who is an area manager of Mannapuram Finance Limited. Federal bank also stated that the transaction carried out in those bank accounts belongs to Mannapuram Finance Limited and not Mr. Anathi Hanumegouda Vijay Kumar (the assessee/appellant). The ld. AR further referred to the extract of the minutes of the meeting of the financial resources and management committee of Mannapuram Finance Ltd held on Saturday 11th day of August 2012 wherein it was stated that the various area managers and heads of that company are authorised to open and operate bank accounts of the company with various bank and branches for their business, accounts are to be opened in the name of mannapuram finance limited, where the various area managers are joint accounts holders and signatories. Thus, PAN of these area managers were also given. Thus, the claim of the assessee was that the money does not belong to him, the money deposited in the same bank account as confirmed by the Mannapuram Finance Ltd also belongs to that company and not to the assessee. Further the Federal Bank has unnecessarily mentioned in account No. permanent account No. of the assessee, accepted as mistake by federal bank also, and therefore the addition deserves to be deleted.
7. The ld. DR vehemently supported the case of the ld. AR and submitted that when the assessee has failed to substantiate the deposit of cash in his bank account, the addition made in the hands of the assessee deserves to be sustained.
8. We have carefully considered the rival contention and perused the orders of the learned lower authorities. The facts shown in this case are that that a bank account is opened in the name of Mannapuram Finance Limited Account No. 961 wherein the assessee, Mr. Anathi Hanumegowda Vijay Kumar having a permanent account No. ANJPV 9000B was also a person named for operating the bank account. It was found by the ld. AO that in this bank account a sum of 2.53 Crores has been deposited. In absence of proper information, the above sum into the bank account of the assessee was added as income. However the fact remains that Mannapuram Finance Ltd has passed a resolution on 11thday of August 2012 wherein the various bank accounts are required to be opened in the name of Mannapuram Finance Limited, however the letter of authority and permanent account No. of the respective area managers are to be given only to operate the bank accounts. Therefore, bank account in Federal Bank was opened in the name of Mannapuram Finance Ltd wherein the assessee was a party who would be operating that bank account. This is certified by Mannapuram Finance Limited stating that all the transactions in the bank account are the transactions of Mannapuram Finance Limited who is the first holder of the account having the permanent account No. of AABCM 6882E. The other parties are stated to be the account operating authorities of that company. The permanent account No. of the operating authorities were also provided to the Federal Bank and Federal Bank instead of mentioning the bank account No. and permanent account No. of Mannapuram Finance Limited, reported the specified financial transactions naming the permanent account No. of the assessee. Federal bank has also admitted the mistake that account is of mannaupram finance limited and not of the assessee. Therefore, the notices and subsequent addition have been made in the hands of the assessee. However, when we look at the letter dated 18 April 2024, we find that more than 30 such accounts were operated and opened by Mannapuram Finance Limited with Federal Bank Ltd wherein the area managers of different branches of the Mannapuram Finance Limited were operating those bank accounts. Therefore, it is not the case of any unaccounted income of the assessee but accounted income of Mannapuram Finance Ltd which states that this money belongs to them was wrongly added in the hands of the assessee. Therefore, the addition in the hands of the assessee is prima facie not required to be made. However, as the amount deposited in the bank account of Mannapuram Finance Limited shows that cash deposit of Rs.1,15,09,911 and cash withdrawal of Rs.1,20,12,207 has been transacted in the impugned bank account. If the LD.AO wishes to verify the same, he may make necessary enquiries from Mannapuram Finance Limited about the above bank account with Federal Bank Ltd belonging to Mannapuram Finance Limited.
9. In the result, the addition deserves to be deleted in the hands of the assessee, subject to verification, if desired by ld. AO from mannapuram Finance Limited. In view of the above facts, the ld. AO may obtain the bank account of Mannapuram Finance Ltd along with the certificate from Mannapuram Finance Limited that this account belongs to them which is placed before us by letter dated 18 April 2024, the learned assessing officer may verify the same and if found in order, delete the addition in the hands of the assessee.
10. In the result appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 10th June 2026.
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