The AO was directed to determine whether the surrender of PAN was informed before reassessment and whether the impugned investments were actually connected to the surrendered PAN.
Nidhi | Nov 8, 2025 |
Mistake in Quoting PAN won’t Invalidate Income Tax Proceedings: ITAT
In an important ruling, the Income Tax Appellate Tribunal (ITAT), Mumbai, has remanded a matter involving the reassessment on a surrendered PAN.
The assessee, Dinesh Jyotichand Jain, a work contractor, filed his income tax return for AY 2012-13 under a PAN AACPJ3994F, declaring Rs.32,52,980. The case was selected for scrutiny, and the assessment was completed on 14.11.2014, determining the total income at Rs 36,78,440.
The assessee claimed that he had another PAN AFKPJ7706F, which he surrendered on 06.08.2013. The AO had completed the assessment under the valid PAN, but later reopened the case and made additions under the surrendered PAN based on large, unexplained deposits and investments.
The assessee filed an appeal before the CIT(A) requesting the authority to set aside the reassessment order, which was made on the surrendered PAN. The CIT(A) quashed the reassessment order, holding that if the PAN was surrendered and the department is aware of the same, further proceedings under the surrendered PAN are invalid. Aggrieved by this order, the revenue filed an appeal before the ITAT, Mumbai.
The ITAT observed that there was no proof that the assessing officer was made aware of the surrendered PAN before the reassessment was initiated. The tribunal believed that in this situation, the CIT(A) was not justified in treating the assessment as invalid. The tribunal further said that PAN is a tool for identification and record-keeping and cannot be equated with the legal identity of the assessee.
The court further held that if there is a mistake in quoting, adopting an incorrect PAN, it would not make the proceedings invalid. The mistake can be corrected once the facts are properly verified.
Based on these facts, the ITAT set aside the CIT(A)’s Order and sent the matter to the AO for fresh consideration. The AO was directed to determine whether the surrender of PAN was informed before reassessment and whether the impugned investments were actually connected to the surrendered PAN.
The AO was allowed to conduct further investigation and then pass an order after providing an opportunity of hearing to the assessee.
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