RMS KARAMCHARI BACHAT AND SAKH SAHAKARI SAMITI LIMITED JAIPUR,JAIPUR vs. ITO, WARD-1(2), JAIPUR, JAIPUR

ITA 244/JPR/2025Status: DisposedITAT Jaipur13 October 2025AY 2014-1536 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under Section 147 read with Section 148 of the Income Tax Act, 1961, were invalid and without jurisdiction. The primary reason for this decision was the discrepancy in the amount of cash deposits alleged by the AO (Rs. 3,28,98,301/-) in the reasons recorded and the notice issued under Section 148, compared to the actual cash deposit found in the bank account (Rs. 1,97,67,171/-). The Tribunal found that the AO did not have cogent material to form a 'reason to believe' that income had escaped assessment, and the reassessment was initiated based on suspicion and unverified data, not tangible material. The Tribunal cited Supreme Court judgments like CIT vs. Kelvinator of India Ltd. and CIT vs. Sun Engineering Works Pvt. Ltd., emphasizing that reassessment must be based on tangible material and not mere suspicion or change of opinion. The Tribunal also noted that the AO failed to independently form the 'reason to believe' and that the reassessment was initiated on a wrong PAN. Consequently, the reassessment proceedings, the notice under Section 148, and the assessment order under Section 147/144 were quashed as void ab initio. Grounds 1 and 2 of the assessee's appeal were allowed.

What were the facts?

The assessee, RMS Karamchari Bachat and Sakh Sahakari Samiti Limited, filed four appeals before the ITAT, Jaipur Bench, challenging orders of the CIT(A), NFAC, Delhi, for assessment years 2013-14 to 2016-17. The appeals were delayed by 204 days, which the Tribunal condoned. For AY 2013-14, the assessee, a cooperative society, did not file a return. The AO initiated reassessment proceedings under Section 147/148, alleging cash deposits of Rs. 3,28,98,301/-. However, bank statements later revealed cash deposits of Rs. 1,97,67,171/-. The AO treated this amount as unexplained investment under Section 69 and completed the assessment under Section 147/144. The CIT(A) dismissed the assessee's appeal. The assessee is aggrieved by these additions and the reassessment proceedings.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 read with Section 148 of the Income Tax Act, 1961, are bad in law and without jurisdiction, and consequently, the assessment order framed under Section 147/144 is void ab initio? Assessee's Contention: The reassessment proceedings are invalid because the AO lacked jurisdiction. The notice under Section 148 was issued based on an incorrect figure of Rs. 3,28,98,301/- for cash deposits, whereas the actual deposit was Rs. 1,97,67,171/-. The AO did not have cogent material to form a 'reason to believe' that income had escaped assessment, relying solely on unverified data and suspicion. The reassessment was initiated on a wrong PAN. The assessee relies on CIT vs. Kelvinator of India Ltd., CIT vs. Sun Engineering Works Pvt. Ltd., Raymond Woollen Mills Ltd. vs. ITO, Saurashtra Cement and Chemical Industries Ltd. vs. CIT, CIT vs. Lovely Exports Pvt. Ltd., and Mahesh Kumar Gupta v. CIT. Revenue's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 69,Section 139(1),Section 142(1),Section 133(6),Section 250

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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM

For Respondent: Smt. Anita Rinesh, JCIT
Hearing: 11/09/2025Pronounced: 13/10/2025

PER: DR. S. SEETHALAKSHMI, J.M.

These are four appeals filed by the assessee against four separate orders of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi all dated 27.05.2024 passed under section 250 of the I.T. Act, 1961, for the assessment years 2013-14 to 16-17. 2. The grounds raised by the assessee are common in all the appeals except change in figures, therefore, for the sake of brevity, the grounds r

The order continues below.

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