Assessment Reopened Where Two PANs Led to Bank Deposit Mismatch: ITAT Kolkata in Sandhya Das Vs ITO

The Income Tax Appellate Tribunal, Kolkata Bench, in Sandhya Das Vs ITO, dealt with an unusual situation where the assessee was inadvertently allotted two different PANs, resulting in conflicting tax and bank records. The Tribunal ultimately set aside the assessment and sent the matter back to the Assessing Officer for a fresh examination, ensuring that only the correct income is taxed.

This order is significant because it addresses practical complications arising from double PAN allotment, bank account linkage issues, and treatment of substantial deposits, including demonetisation period cash deposits, as unexplained income.

Background of the Appeal

The appeal was filed by the assessee against an order passed by the National Faceless Appeal Centre, Delhi (Ld. CIT(A)), dated 21.05.2025, for Assessment Year 2017-18. The dispute centred on large credits in a bank account linked to one PAN, where no return had been filed, while the assessee had already been regularly filing returns under another PAN.

Delay in Filing the Appeal and Condonation

The appeal reached the Tribunal with a delay of 60 days beyond the statutory time limit.

  • The assessee’s counsel explained the reasons for this delay during the hearing.
  • The Ld. D.R did not object to condonation.
  • After evaluating the explanations and documents, the Tribunal found that:
    • The delay arose from bona fide and genuine reasons.
    • There was no indication of mala fide intention or deliberate negligence.

The Tribunal therefore condoned the delay of 60 days and admitted the appeal for adjudication on merits.

Issue of Double PAN and Bank Account Linkage

The central controversy arose because the assessee ended up holding two distinct PANs, which in turn were linked to different bank accounts. This resulted in the Assessing Officer treating deposits in one account as unexplained, simply because no return had been filed under that particular PAN.

How the Double PAN Situation Arose

The assessee had an original PAN which was already in use for filing income tax returns. However:

  1. The original PAN card was misplaced.
  2. Instead of filing an application for a duplicate PAN card for the same number, the assessee’s consultant erroneously applied for a fresh PAN.
  3. Due to this mistake, the assessee was allotted two PANs:
    • One original PAN already in use,
    • Another new PAN which came into existence due to the fresh application.

This mistake had serious downstream implications, particularly in relation to bank accounts.

PAN-wise Bank Accounts of the Assessee

The Tribunal noted the following factual position:

  • A bank account bearing No. 236958 with SBI, Haidarpara, Siliguri was opened and operated with PAN No. AHDED1535B.

    • During the relevant period, this account reflected total credits of ₹2,91,69,653/-.
    • These credits also included cash deposits of ₹32,39,000 during the demonetisation period.
    • No return of income was filed under PAN AHDED1535B.

  • Another bank account bearing No. 20117 was linked to **PAN No.