Panchratna Co-operative Housing Society Ltd. Vs ITO (ITAT Mumbai)
Reopening Hit by Change of Opinion: ITAT Mumbai Quashes 147 Against Panchratna CHS on 80P(2)(d) & Mutuality Issues Already Scrutinised
Assessee, The Panchratna Co-operative Housing Society Ltd., filed return declaring ₹61,97,289 which was scrutinised & assessed u/s 143(3) on 19.03.2016. During original scrutiny, AO examined (i) interest income from investments in Saraswat Co-op Bank, Bharat Co-op Bank & Maharashtra Co-op Bank, and (ii) non-mutual receipts such as income from Loop Mobile, Tata Teleservices, Gem Plaza & Goenka Diamonds. AO made additions; CIT(A) deleted ₹66,12,901 applying doctrine of mutuality & relying on ITAT’s earlier order.
Despite the original scrutiny and full enquiry, AO issued notice u/s 148 on 05.05.2021 alleging that interest from co-operative banks was wrongly allowed u/s 80P(2)(d) & that certain incomes violated mutuality. Assessee filed a detailed reply (page 51 of the file) demonstrating that all these issues had been fully examined earlier & no new material existed. AO however passed an order u/s 148A(d) (pages 53–56) merely reiterating the very same reasons, without pointing to any tangible material.
In reassessment order dated 18.05.2023, AO repeated the earlier additions of ₹87,54,271. CIT(A)/NFAC, instead of addressing the legal issue of jurisdiction, remanded the matter ex parte u/s 251(1)(a) for fresh adjudication.
Before Tribunal, Assessee challenged the validity of the 147 proceedings. Tribunal carefully examined the record and held that the interest income from co-operative banks & other non-mutual incomes were squarely examined in the original assessment order dated 19.03.2016 (page 41) and CIT(A) had adjudicated them. Hence, reopening without any fresh, tangible material was barred.
Tribunal relied on binding judgments of the Bombay High Court in Kalpataru Land Pvt Ltd (136 taxmann.com 434) & Golden Tobacco Ltd (136 taxmann.com 185), holding that AO cannot reopen based on the same material & mere change of opinion is not “reason to believe.” Tribunal also relied on the Supreme Court in DCIT v. Gandhibag Sahakari Bank Ltd (178 taxmann.com 259) reiterating that reopening based purely on revisiting an earlier view is invalid.
As AO simply attempted to review his earlier decision & no new material existed, Tribunal held that initiation of reassessment was unsustainable in law. The entire reassessment u/s 147 r.w.s. 144B dated 18.05.2023 was quashed. Assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
