Reassessment Fails When Original Reason Disappears – ITAT Chennai Quashes Entire Proceedings

Annakodiraj Vs ITO (ITAT Chennai) In this case, the ITAT Chennai held that a reassessment cannot survive when no addition is ultimately made on the very reasons recorded for reopening. The AO had reopened the assessment based on alleged cash deposits (₹1.15 lakh) and withdrawals (₹1.70 crore). However, in the final reassessment order, no addition was made on these issues. Instead, the AO made completely unrelated additions—estimating net profit and treating milk sales as unexplained purchases. The Tribunal noted that these additions had no nexus with the reasons recorded for reopening. R...