Ganga Sahkari Awas Samiti Ltd Vs DCIT (ITAT Agra)
₹3.27 Crore Additions Fall as Reopening Fails the Limitation Test
A Jurisdictional Defect Ends the Assessment
The Agra Bench of the Income Tax Appellate Tribunal quashed reassessment proceedings against a cooperative housing society involving aggregate additions of ₹3,27,35,685, holding that the reassessment notice was barred by limitation. Following the Supreme Court’s decision in Union of India v. Rajeev Bansal, the Tribunal concluded that the original notice issued under the old reassessment regime and the subsequent notice issued under the new regime could not sustain the assessment.
The decision illustrates the importance of examining the validity of reopening before entering into the merits of additions. Although the society had raised several objections concerning mutuality, bank credits, alleged undisclosed profits and denial of an effective hearing, the appeal succeeded on the preliminary legal ground itself.
Bank Credits and Alleged Profits Trigger Reopening
The assessee, Shri Ganga Sahkari Awas Samiti Ltd., had not filed its return for Assessment Year 2015-16. Information available on the Department’s Insight Portal indicated aggregate credits of ₹50,70,425 in its bank account. The Department also identified alleged unaccounted and undisclosed profits of ₹2,76,65,260. Together, these amounts were treated as income escaping assessment.
