Tribunal remands cash-deposit additions under s. 69A where assessee held two PANs and old-bank-account notices went unanswered

5-Second Takeaway

The Tribunal remanded the s. 69A additions for fresh verification, holding that the assessee’s use of two PANs and the continued linkage of the bank account to the old PAN had prevented proper examination of the cash deposits. It directed that no addition be made if the deposits are found recorded in the books and the bank account is disclosed in the balance sheet; otherwise, the Assessing Officer may pass a fresh order after hearing the assessee.

The assessee, a co-operative society that had changed its name and obtained a new PAN, had continued to leave its earlier PAN active. Cash deposits in a bank account linked to the old PAN were picked up by the department, and reassessments for three years treated those deposits as unexplained money under s. 69A.

In second appeal, the society explained that the deposits were receipts from members and had been duly recorded in its books. It also said that notices issued on the old PAN had not been properly responded to because the account and PAN linkage had not been regularised.

The Tribunal noted that the difficulty arose because the assessee was effectively using two PANs, which had obstructed verification of the deposits appearing under the old PAN. It also observed that holding two PANs is a punishable offence and directed the assessee to surrender one of them.

The matter was remanded to the Assessing Officer for fresh consideration of all three years. The Tribunal stated that no addition should be made if the deposits are found recorded in the books and the bank account is disclosed in the balance sheet; otherwise, a fresh order may be passed in accordance with law after giving an opportunity of hearing.