SADHBHAV SANMITRA NAGRI SAHAKARI PATSANSTHA MARYADIT CHIKHLI,CHIKHLI, BULDANA vs. ITO WARD 2, KHAMGAON, KHAMGAON, AKOLA

ITA 403/NAG/2026Status: DisposedITAT Nagpur23 September 2026AY 2018-1912 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer had travelled beyond the reasons for reopening the assessment. The reassessment proceedings were initiated to examine cash deposits and withdrawals. However, the Assessing Officer, while satisfied with the explanation for cash deposits/withdrawals, eventually made a disallowance under Section 80P(2) of the Act. The Tribunal relied on the ratio laid down by the jurisdictional Bombay High Court in CIT Vs. Jet Airways (I) Ltd., which states that if an Assessing Officer accepts the assessee's contention regarding the initial reason for reopening, it is not open for him to independently assess some other income without issuing a fresh notice under Section 148. The Tribunal also referred to Gujarat High Court's approval of the Jet Airways decision and the Delhi High Court's view that for every new issue, a fresh notice under Section 148 would be required. Consequently, the Tribunal quashed the reassessment proceedings as invalid and bad in law because no fresh notice under Section 148 was issued for the disallowance on a new issue not raised in the original notice. The finding of the learned CIT(A) was set aside, and the assessee succeeded on the legal issue. Dealing with the remaining grounds on merit was deemed academic.

What were the facts?

The assessee, Sadhbhav Sanmitra Nagri Sahkari Patsanstha Maryadit, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2018-19. The NFAC's order upheld the assessment order passed by the Income Tax Officer under Section 147 read with Section 144B of the Income Tax Act, 1961. The original assessment order was passed on 07.02.2024. The assessee had not filed a return of income under Section 139(1) for the relevant assessment year. The reassessment proceedings were initiated based on information regarding cash withdrawals and deposits. However, the Assessing Officer ultimately disallowed a deduction claimed by the assessee under Section 80P(2)(a)(i) of the Act.

What were the issues?

1. Whether the assessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961, is illegal and bad in law, considering that the disallowance under Section 80P was made, which was not part of the reasons recorded for reopening the assessment? Assessee's Contention: The assessee argued that the Assessing Officer travelled beyond his jurisdiction. The reassessment was initiated to examine cash deposits and withdrawals, but the final assessment order made a disallowance under Section 80P, which was not based on the reasons recorded in the notice issued under Section 148A. The assessee relied on the jurisdictional Bombay High Court's decision in CIT Vs. Jet Airways (1) Ltd. and other High Court decisions. The assessee also contended that no fresh notice under Section 148 was issued for the disallowance made under Section 80P. Revenue's Contention: The Revenue, through the Senior Departmental Representative, vehemently argued in support of the order of the learned CIT(A). No specific authorities or precedents were named by the revenue in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 80P,Section 139(1),Section 148,Section 119(2)(b),Section 234A,Section 234B,Section 234C,Section 270A,Section 250,Section 148A(d),Section 148A(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR ‘SMC’ BENCH, NAGPUR

Before: DR.MANISH BORAD

For Appellant: Shri Himesh Demble, CA
For Respondent: Ms. Jaya Lakhwani, Sr. DR
Pronounced: 23.09.2026

The captioned appeal at the instance of assessee pertaining to A.Y. 2018-19 is are directed against the order dated 18.02.2026 framed by National Faceless Appeal Centre, Delhi (NFAC) arising out of Assessment order dated 07.02.2024 passed u/s. 147 r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).

2.

In the instant appeal, assessee has raised following grounds of appeal :

“1. That, in the facts and circumstances of the case, the order framed by the Hon'ble Ld. CIT(A) is illegal, unjustified and bad in law.

2.

That, in the facts and circumstances of the case, the Hon'ble Ld. CIT

The order continues below.

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