SHREE BANDHARDA SEVA SAHKARI MANDLI LTD.,JUNAGADH-UNA vs. INCOME TAX OFFICER WARD -4, JUNAGADH

ITA 881/RJT/2025Status: DisposedITAT Rajkot19 October 2026AY 2019-2016 pages
AI SummaryAllowed

What were the facts?

The assessee, Shree Bandharda Seva Sahkari Mandali Limited, filed an appeal against the order of the CIT(A) for Assessment Year 2019-20. The appeal challenged the reopening of assessment under Section 147 of the Income Tax Act, 1961, and the subsequent disallowance of a deduction claimed under Section 80P. The Assessing Officer initiated reassessment proceedings based on information received regarding significant financial transactions with Junagadh Jilla Sahari Bank Limited. The assessee failed to file a return of income initially, and after a notice under Section 148A, a return was filed. The Assessing Officer disallowed the Section 80P deduction of Rs. 3,74,897/-. The CIT(A) upheld the reopening and the disallowance. The assessee contended that the approval for reopening under Section 151 was defective, and the addition was made on an issue different from the reasons for reopening.

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, were invalid. The primary reason for this decision was the defective approval obtained under Section 151. The Tribunal noted that the approval was neither digitally nor manually signed, which was a critical procedural flaw. Following the precedent set by a coordinate bench of the ITAT Rajkot in the case of M/s. Aditya Plastics, the Tribunal quashed the reassessment proceedings. Furthermore, the Tribunal addressed the second technical plea regarding the reassessment being initiated on one issue and the addition being made on a different issue. Citing the judgment of the Hon'ble Bombay High Court in Jet Airway Limited, the Tribunal found this to be another ground to quash the reassessment order. As the reassessment itself was quashed, all other issues on merits, including the disallowance of the Section 80P deduction, were rendered academic and infructuous. The appeal of the assessee was allowed.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are valid, considering the alleged defective approval under Section 151. - Assessee's contention: The approval under Section 151 is neither digitally nor manually signed, rendering the reassessment proceedings invalid. Reliance is placed on the ITAT Rajkot decision in Aditya Plastics. - Revenue's contention: The Assessing Officer's stand was reiterated. 2. Whether the reassessment proceedings are valid when the addition made by the Assessing Officer is on a different issue (disallowance of Section 80P deduction) than the reasons recorded for reopening (cash deposit/withdrawal). - Assessee's contention: The reassessment was initiated on one issue but the addition was made on another, making the proceedings bad in law. Reliance is placed on the Bombay High Court decision in Jet Airway Limited. - Revenue's contention: The Assessing Officer's stand was reiterated. 3. Whether the assessee is eligible for deduction under Section 80P of the Income Tax Act, 1961. - Assessee's contention: As a primary agricultural credit society, it is eligible for deduction under Section 80P(2). It is not a cooperative bank. Details and audit reports were submitted. - Revenue's contention: The Assessing Officer disallowed the deduction as the assessee did not file a return of income under Section 139(1).

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 151,Section 80P,Section 139,Section 133(6),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Appellant: Shri R. D. Lalchandani, Ld. AR
For Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. Dr
Hearing: 15/10/2026Pronounced: 19/10/2026

Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year 2019- 20, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals), dated 09.10.2025, which in turn arises out of an order passed by the Assessing Officer u/s 147 of the Act, on 05.03.2024. 2. Grounds of appeal raised by the assessee are as follows:

1.

The CIT (A) erred in

The order continues below.

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