PRATHAMIK KRUSHI PATTIN SAHAKARI SANGH NIYAMIT GODACHI,RAMDURG vs. THE INCOME TAX OFFICER, WARD - 2, BELAGAVI

A common legal issue raised in the instant two appeals is that the reopening proceedings have been carried out to examine the cash deposits and in the reassessment proceedings no addition has been made for the reasons recorded for reopening of the assessment, i.e. cash deposits but a separate addition/disallowance has been made denying deduction u/s.80P of the Act for which no separate notice u/s.148 of the Act has been issued and that light of judgment of Hon’ble Jurisdictional High Court in the case CIT Vs. Jet Airways (I) Ltd. (2010) 195 Taxman 117 (Bombay) the impugned orders passed by ld.CIT(A) deserves to be quashed.

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.

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.

We take note of the ratio laid down by the Hon’ble 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 Assessing Officer has not made 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.

Dealing with remaining grounds raised by the respective assessee(s) on merit would be merely academic in nature and therefore held to be infructuous.

In the result, both the appeals filed by the respective assessee’s are allowed as per terms indicated hereinabove.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, Panaji 4. ‘SMC’ Bench / DR, ITAT, Panaji ‘SMC’ Bench ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,