Raigad District Police Cooperative Credit Society Limited Vs ITO (ITAT Pune)
No Fishing Enquiries in Reassessment – Pune ITAT Quashes 148 Proceedings After AO Dropped Original Issue!
The Pune ITAT quashed reassessment proceedings holding that once the Assessing Officer accepted the explanation regarding the very issue for which reopening was initiated, he could not make a fresh addition on another issue without issuing a separate notice u/s 148.
The case was reopened on the basis of alleged unexplained cash deposits of ₹1.28 crore in the assessee co-operative society’s bank account. During reassessment proceedings, the assessee satisfactorily explained the source of the cash deposits and the AO ultimately made no addition on that count.
However, the AO proceeded to deny deduction u/s 80P(2)(a)(i) on the ground that the return was not filed within the due date prescribed u/s 139(1), invoking section 80AC. The Tribunal held that this disallowance related to an entirely new issue which was not the basis of reopening and for which no fresh notice u/s 148 had been issued.
Relying on the Bombay High Court judgment in CIT vs. Jet Airways (I) Ltd., the ITAT reiterated that if the income forming the basis of “reason to believe” is ultimately not assessed, the AO cannot independently assess some other income in the same reassessment proceedings without fresh jurisdictional compliance. Accordingly, the entire reassessment was quashed as invalid and bad in law.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to A.Y. 2018-19 is directed against the order dated 26.12.2025 of National Faceless Appeal Centre passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 06.03.2024 passed u/s.147 r.w.s.144B of the Act.
