SHRI KASHI ISHWAR CO-OP CREDIT SOCIETY LTD SAPASA,BELGAUM vs. INCOME TAX OFFICER WARD- 2, BELAGAVI

आदेश / ORDER

PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 25.11.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2019-20.

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“1. The appellate order passed by the Honourable National Faceless Appeal Centre, in so far as it is prejudicial to the interests of the appellant, is grossly opposed to law and facts. 2. The assumption of jurisdiction and issue of notice u/s 148 by the Assessing Officer is bad in law. 3. The Honourable NFAC ought to have appreciated that the notice u/s 148 ought to have been issued by the National Faceless Appeal Centre, Delhi. 4. The Honourable NFAC erred in upholding the deduction under sec.80P amounting to Rs. 1,20,630/-. Thus, the impugned appellate order is bad in law. 5. The Honourable NFAC erred in denying deduction u/s 80P by ignoring that a return filed pursuant to notice u/s 148 is deemed to be a return u/s 139, rendering the disallowance bad in law. 6. The Honourable NFAC failed to appreciate that the return of income filed in response to notice u/s 148 is to be treated as if it were a return filed u/s 139, and therefore all consequential benefits, including deduction u/s 80P, ought to have been allowed. 7. The appellant craves leave to add, amend, alter, substitute OR withdraw any of the above grounds at the time of hearing.”

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year under consideration. On the basis of information that the assessee has withdrawn cash of Rs.1,47,30,000/- from its current account maintained with Aroodha Jyoti Pattan Sahakri Bank and deposited cash in above current account of Rs.20,00,000/-, the above information suggests that the assessee has not filed return of income despite having performed huge financial transactions therefore, the case of the assessee was reopened u/s 147 of the IT Act and after following the procedure laid down u/s 148A(b)/(d) of the IT Act, notice u/s 148 of the IT Act was issued to the assessee on 26.03.2023. In response to above notice, the assessee furnished return by declaring income of Rs.Nil after claiming deduction of Rs.1,20,630/- u/s 80P(2)(a)(i) of the IT Act. After considering the submissions and reply of the assessee, the Assessing Officer by applying provisions of section 80AC of the IT Act denied the deduction u/s 80P(2)(a)(i) of the IT Act since the return of income was not furnished u/s 139(1) of the IT Act rather furnished u/s 148 of the IT Act. Accordingly, vide order

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dated 19.01.2024, the Assessing Officer completed the assessment proceedings u/s 147 r.w.s. 144B of the IT Act by determining the income of the assessee at Rs.1,20,630/- as against income of Rs.Nil returned by the assessee. The above assessed income includes addition of Rs.1,20,630/- on account of disallowance u/s 80P(2)(a)(i) of the IT Act. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee. 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that Ld. Counsel of the assessee relied on a coordinate bench decision passed in the case of Prathamik Krushi Pattin Sahakari Sangh Niyamit vs. ITO in ITA No.109/PAN/2026 order dated

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28.07.2026 wherein the Tribunal under identical facts allowed the appeal of the assessee by observing as under :-

“3. We have heard the rival submissions and perused the record placed before us. We observe in the case of assessee namely Karnataka Prathamik Krushi Pattin Sahakari Sangh Niyamit Handigund, the reasons for reopening was to examine the cash deposits of Rs.65,75,968/- but after the conclusion of the assessment proceedings no addition has been made for the cash deposits and only the deduction u/s.80P of the Act at Rs.83,632/- has been disallowed for which no separate notice u/s.148 of the Act has been issued. 4. Similarly in the case of another assessee namely Prathamik Krushi Pattin Sahakari Sangh Niyamit Godachi, the reasons for reopening was to examine the cash deposit of Rs.75,71,825/- but after the conclusion of the assessment ld. Assessing Officer disallowed Rs.3,73,928/- u/s.80P of the Act. 5. We take note of the ratio laid down by the Hon’ble Jurisdictional High Court in the case of CIT Vs. Jet Airways (I) Ltd. (2010) 195 Taxman 117 (Bombay) where the principle has been laid down “that section 147 of the section 147 has an effect that Assessing Officer has to assess or reassess income ('such income') which escaped assessment and which was basis of formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which comes to his notice during course of proceedings. However, if after issuing a notice u/s.148, he accepts contention of assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him to independently assess some other income; if he intends to do so, a fresh notice u/s.148 would be necessary, legality of which would be tested in event of a challenge by assessee”. This principle laid down by the Hon’ble Jurisdictional High Court in the case of CIT Vs. Jet Airways (I) Ltd. (supra) squarely applies on the facts of the instant case and since ld. Assessing Officer has not made

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any addition for the reasons recorded for reopening and further failed to issue fresh notice u/s.148 of the Act for making disallowance on new issue which was not raised in the original notice u/s.148 of the Act, re-assessment proceedings deserves to be quashed as invalid and bad in law. We accordingly order so and set aside the findings of ld.CIT(A) in the instant appeals filed by the assessees. Thus, legal issue raised by the assessee in both the appeals are allowed. 6. Dealing with remaining grounds raised by the respective assessee(s) on merit would be merely academic in nature and therefore held to be infructuous. 7. In the result, both the appeals filed by the respective assessee’s are allowed as per terms indicated hereinabove.”

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making disallowance on new issue which was not raised in the original notice u/s 148 of the IT Act, re-assessment proceedings deserves to be quashed as invalid and bad in law. We accordingly set-aside the order passed by Ld. CIT(A)/NFAC and quash the reassessment order dated 19.01.2024 passed by the Assessing Officer. Thus, the ground nos.1 & 4 raised by the assessee are allowed. Since we have allowed the appeal of the assessee by deciding ground nos.1 & 4, other grounds become academic, hence need not be adjudicated. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 20th day of August, 2026.

Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji / Dated : 20th August, 2026. Sujeet/DOC Digitally signed by Sujeet Kumar Sujeet Kumar Sharma Sharma Date: 2026.08.20 17:22:30 +05'30'

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आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. 4. DR, ITAT, Panaji. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar/Sr.PS ITAT, Panaji.