Deputy Commissioner can rectify a mistake in the challan if Assessee Deposited Tax by TAN instead of PAN

By | January 23, 2025
(Last Updated On: January 23, 2025)

Deputy Commissioner can rectify a mistake in the challan if Assessee Deposited Tax by TAN instead of PAN

Summary in Key Points:

  • Issue: Whether the Deputy Commissioner can rectify a mistake in the challan (tax payment receipt) by correcting the PAN number to enable the release of the refund due to the assessee.
  • Facts: The assessee had deposited taxes but mistakenly mentioned the TAN (Tax Deduction and Collection Account Number) instead of the PAN (Permanent Account Number) in the challans. This error prevented the AO from giving credit for the taxes paid and releasing the refund due to the assessee.
  • Decision: The ITAT held that the Deputy Commissioner should correct the PAN number in the challans and release the refund to the assessee, as the revenue department acknowledged that the amount was indeed due to the assessee.

Analysis:

The ITAT ruled in favor of the assessee, directing the Deputy Commissioner to rectify the mistake in the challans. The ITAT emphasized the following:

  • Acknowledged Refund: The revenue department did not dispute that the refund amount was due to the assessee.
  • Minor Correction: The only correction required was changing the TAN to the PAN in the challans.
  • Release of Refund: The Deputy Commissioner was directed to correct the challans and release the refund, with or without the approval of the Chief Commissioner.

Important Note: This case highlights the importance of rectifying mistakes in tax records to ensure that taxpayers receive the correct refunds due to them. The ITAT’s decision emphasizes a practical approach, allowing the correction of minor errors to facilitate the release of legitimate refunds. This decision promotes efficiency and fairness in tax administration, ensuring that taxpayers are not denied their rightful dues due to minor clerical errors.

HIGH COURT OF JAMMU & KASHMIR AND LADAKH
Kashmir Tubes
v.
Union of India
Sanjeev Kumar and Puneet Gupta, JJ.
WP(C) No.2288 of 2023
DECEMBER  31, 2024
Gautam Chugh, Adv. for the Petitioner. Suraj Singh Wazir, Adv. for the Respondent.
ORDER
1. In the instant case, the short grievance projected by the petitioner is that it filed its return of income on 31.10.2005 for Assessment Year 20052006 declaring an income of Rs.2,14,20,490/- and claimed excise duty refund and interest subsidy for the said Assessment Year as per the government Scheme. The Assessing authority while assessing the petitioner made additions in income and created additional demand of tax.
2. Feeling aggrieved the petitioner filed an appeal before the Commissioner of Income Tax Appeals and thereafter before the Income Tax Appellate Tribunal. Income Tax Appellate Tribunal ruled in favour of the petitioner. Feeling aggrieved, the respondents filed an appeal before this Court in terms of Section 260-A of the Income Tax which came to be dismissed vide order dated 29.01.2013. Consequent upon the order of the Hon’ble ITAT, the income of the petitioner was determined at Rs.2,14,40,836/-. The petitioner was held entitled to refund amounting to Rs.39.00 lacs which was given to the petitioner. On 15.11.2021 rectification order under Section 154 of the Income Tax Act was passed on an application moved by the petitioner on the ground that full credit of challans deposited by the petitioner had not been given by the assessing officer due to wrong PAN number mentioned in the challans by the petitioner. The petitioner has raised a dispute with regard to credit of Rs.25.00 lacs, which as per the petitioner, has not been given to him. The stand of the respondents is that as per the records maintained with ITBA system, this credit is not reflected in OLTAS system of credit management. It is submitted that the unless credit is reflected no action can be taken manually. The respondents further submit that on 09.06.2021 a communication was written to ADG (Systems)-2 Ghaziabad for correction of challans for the Assessment Year 2005-2006, for the petitioner had inadvertently mentioned its TAN number instead of PAN number on the challans deposited in the J&K Bank Gandhi Nagar, Jammu. The letter was also issued to the Branch Manager Jammu & Kashmir Bank Gandhi Nagar, Jammu on 07.04.2021 followed by reminder issued on 22.12.2023 for confirmation and verification of payment of challans stating that perusal of the OLTAS for the relevant year revealed that above payment stated to be made by the petitioner in your bank was not reflected. The matter was taken up by the respondents with the Director General of Income Tax (Systems), Ghaziabad for correction of challan. As per the respondents, no response has been received so far.
3. Be that as it may, the fact remains that the only correction which is required to be carried in the two challans is with regard to the PAN number. Admittedly, the petitioner has mentioned on the challans TAN number instead of PAN number. Rest there is no dispute either with regard to submission of the challans or payment of amount of Rs.25.00 lacs. The respondents do not deny that aforesaid amount is due to the petitioner. They, however, submit that unless the necessary correction in the challans is carried out by following due procedure, said amount cannot be released.
4. Deputy Commissioner of Income Tax, Circle-1, Jammu has appeared in person to assist this Court to sort out the matter. Dr. Ruveda Salam, Deputy Commissioner of Income Tax, Circle-1, Jammu appearing in person submits that the amount due to the petitioner shall be released after the necessary correction in the challans in question is carried out after the approval of the Chief Commissioner Income Tax, Amritsar.
5. In view of the aforesaid admitted position, we are inclined to dispose of this petition by directing the Deputy Commissioner Income Tax, Circle-1, Jammu to ensure that the necessary correction in the challan as stated above is carried out with or without the approval of the Chief Commissioner Income Tax, Amirtsar within a period of two weeks and the amount payable to the petitioner is released. We also make it clear that in case no approval is received by the Deputy Commissioner Income Tax Appeals for correction of an inadvertent and clerical error in the challans from the office of the Chief Commissioner Income Tax, Amritsar, the approval, as may be required, shall be deemed to have been granted and the Deputy Commissioner Income Tax, Circle-1, Jammu shall be competent to carry out the necessary correction and release the amount payable to the petitioner. Needless to say that amount shall be payable along with statutory interest.