Ekchaka Samabaya Krishi Unnayan Samity Limited Vs DCIT (ITAT Kolkata)
Summary: The Income Tax Appellate Tribunal, Kolkata Bench, considered two appeals filed by Ekchaka Samabaya Krishi Unnayan Samity Limited against the orders of the NFAC, Delhi, for Assessment Years 2015-16 and 2016-17. Since both appeals involved the same assessee and identical issues, they were heard together and decided by a common order, with the facts for AY 2015-16 in ITA No. 426/KOL/2026 being considered for convenience.
The reassessment proceedings arose after information was received by the Assessing Officer that the assessee had made cash deposits into its Axis Bank Limited accounts. For AY 2015-16, the amount of cash deposits stated in the order was Rs.55,92,800/-. The assessee had not filed its return of income and did not file a return in response to the notice issued under section 148 of the Income-tax Act, 1961. The Assessing Officer ultimately made additions under section 56, section 28 and section 80P6(iii), including an addition of Rs.57,108/- under section 56, Rs.4,91,302/- under section 28 and Rs.7,39,079/- on account of valuation in respect of disallowance under section 80P6(iii). The order also records that similar information and identical additions arose for AY 2016-17.
The assessee challenged the reassessment before the CIT(A), but both appeals were dismissed by orders dated 18.12.2025. Before the Tribunal, the assessee’s principal contention was that the reason recorded for reopening concerned the cash deposits, but no addition was ultimately made on that issue because the assessee had furnished documents explaining the source of the deposits. According to the assessee, once the addition forming the basis of reopening was not made, the Assessing Officer could not travel beyond the recorded reasons and make additions on unrelated issues. The assessee relied upon judicial precedents including CIT Vs Mohmed Juned Dadani and the principles stated in the decisions referred to in the order.
The Departmental Representative, on the other hand, submitted that the assessee had not challenged the reopening before the appropriate forum and contended that once the assessment was reopened, the Assessing Officer had jurisdiction to frame the reassessment irrespective of whether the issue forming the recorded reason ultimately resulted in an addition.
The Tribunal examined the reassessment record and found that, for both assessment years, the recorded reasons concerned cash deposits in the bank account. During the assessment proceedings, the assessee submitted documents establishing the source of those cash deposits and, accordingly, no addition was made on account of the cash deposits themselves. Nevertheless, additions were made under sections 56 and 28 and another addition was made in respect of disallowance under section 80P6(iii).
The Tribunal held that the issue was no longer res integra. Relying upon the judicial principles in section 147 and section 148 jurisprudence, as well as the decisions of the Bombay High Court in CIT Vs. Jet Airways India Ltd., the Delhi High Court in Ranbaxy Laboratories Ltd. Vs. CIT and the Gujarat High Court in CIT Vs. Mohammed Junaid Dadani, the Tribunal concluded that an Assessing Officer could make additions on other issues only where the addition forming the subject matter of the recorded reasons was also made. If the addition forming the basis of reopening was not made, the Tribunal held that the Assessing Officer had no alternative but to drop the reopening proceedings and issue another notice under section 148 after duly recording reasons for escapement of income on another issue.
Consequently, the Tribunal quashed the reassessment proceedings for AYs 2015-16 and 2016-17 and allowed both appeals of the assessee.
Cases Discussed
- CIT Vs. Mohmed Juned Dadani — Gujarat High Court, 355 ITR 172 (Guj.).
- CIT Vs. Jet Airways India Ltd. — Bombay High Court, 331 ITR 236 (Bom.).
- Ranbaxy Laboratories Ltd. Vs. CIT — Delhi High Court, 336 ITR 136 (Del.).
Appellant Represented by: Shri Shuvo Chakraborty
FULL TEXT OF THE ORDER OF ITAT KOLKATA
These two Appeals are filed by the Assessee against the order of the NFAC, Delhi (‘Ld. CIT(A)’ for short) dated 18.12.2025, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Years 2015-16 & 2016-17 respectively.
2. Since both the Appeals are filed by the single Assessee having identical issues to be decided, the captioned Appeals are heard together and decided in this common order. For the sake of convenience, brief facts of the case for the assessment year 2015-16 in ITA No.426/KOL/2026 has been considered.
3. Brief facts of the case are that, Assessee had not filed the return of income for the year under consideration. An information received by the Assessing Officer that Assessee has made cash deposits into bank accounts in the year under consideration in Axis Bank Limited to the tune of Rs.55,92,800/-. Reassessment proceedings initiated and a notice u/s 148 of the Act came to be issued to the Assessee. In response to the notice issued u/s 148 of the Act by the Assessing Officer, Assessee has not filed the return of income. An Assessment Order came to be passed on 18.03.2024 by making addition of Rs.57,108/- u/s 56 of the Act, Rs.4,91,302 u/s 28 of the Act on account of income from other source and also made addition of Rs.7,39,079/- on account of valuation in respect of disallowance of u/s 80P6(iii) of the Act. Aggrieved by the Assessment Order dated 18.03.2024, Assessee preferred an Appeal before the Ld. CIT(A). It is pertinent to note that even for assessment year 2016-17, based on the similar information, identical additions were made vide Assessment Order dated 19.03.2024.
4. Aggrieved by the Assessment Orders dated 18.12.2024 for the assessment year 2015-16, and assessment order dated 19.12.2024 for the assessment year 2016-17, Assessee preferred two Appeals before the Ld. CIT(A). The Ld. CIT(A) vide orders dated 18.12.2025, dismissed both the Appeals filed by the Assessee. As against the orders of the Ld. CIT(A), Assessee preferred the captioned Appeals.
5. The solitary contention of the Ld. AR is that the reason for reopening is not subject matter of the addition and no additions have been made in respect of the reasons recorded for reopening. Further submitted that, once there is no addition made on the issue of reopening, the Assessing Officer cannot make additions on other issues. The Learned Counsel relying on the various Judicial precedents, sought for allowing the Appeal.
6. Per contra, the Ld. DR submitted that the reopening has not been challenged by the Assessee before the appropriate form. Once the case of the Assessee is reopened, the Assessing Officer is conferred with the power to frame the reassessment, irrespective of the fact that the issue in the reasons recorded ultimately resulted in an addition or not. Thus, relying on the orders of the Lower Authorities, sought for dismissal of the Appeal.
7. We have heard the parties and perused the material available on record. In both the assessment years under consideration, the Assessing Officer recorded reasons for reopening that Assessee has deposited cash into the bank account. During the assessment proceedings, Assessee has submitted various documents to prove the source of the cash deposited by the Assessee, accordingly, no addition has been made on account of cash deposited by the Assessee. However, the Assessing Officer made addition u/s 56 of the Act, u/s 28 of the Act and also made one more addition on account of variation in respect of disallowance u/s 80P6(iii) of the Act. It is a specific case of the Assessee that once no addition has been made on the reasons recorded for reopening, the Assessing Officer has no jurisdiction to travel beyond and make additions on the other issues which are not part of reasons recorded.
8. The above issue involved in the present Appeal is no more res integra. The addition can be made by the Assessing Officer only if the addition that was the subject matter of the ‘reasons recorded’ is also made by the Assessing Officer. If, for any reason, the addition which was the subject matter of reopening was not sought to be made by the Assessing Officer, then the Assessing Officer has no other choice but to drop the said reopening proceedings and issue another notices u/s 148 of the Act by duly recording reasons for escapement of income on other/another issue. The said ratio has been reiterated by the Hon’ble Bombay High Court in the case of CIT Vs. Jet Airways India Ltd reported in 331 ITR 236 (Bom); decision of the Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. CIT reported in 336 ITR 136 (Del) and the decision of the Hon’ble Gujarat High Court in the case of CIT Vs. Mohammed Junaid Dadani reported in 355 ITR 172 (Guj). In view of the above, we hereby quash the reassessment initiated against the Assessee for the assessment years 2015-16 and 2016-17.
9. In the result, both the Appeals of the Assessee are allowed.
Order pronounced on 18.08.2026.
