Reopening u/s 147 Unsustainable: ITAT Sets Aside Reassessment Due to Invalid And Irrelevant Reasons Recorded [Read Order]
The ITAT quashed reassessment proceedings holding that reasons must pertain strictly to the relevant assessment year.
![Reopening u/s 147 Unsustainable: ITAT Sets Aside Reassessment Due to Invalid And Irrelevant Reasons Recorded [Read Order]](https://images.taxscan.in/h-upload/2026/03/29/2130731-reopening-us-147-unsustainable-itat-reassessment-irrelevant-reasons-recorded-taxscan.webp "Reopening u/s 147 Unsustainable: ITAT Sets Aside Reassessment Due to Invalid And Irrelevant Reasons Recorded [Read Order]")
The Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench has held that reopening of assessment in terms of Section 147 of the Income Tax Act 1961 would not be sustainable when the reasons recorded do not pertain to the assessment year in question. The assessee, Vagad Visha Oswal Chovisi Mahajan Charitable Trust filed its return declaring nil income after claiming exemption...
The Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench has held that reopening of assessment in terms of Section 147 of the Income Tax Act 1961 would not be sustainable when the reasons recorded do not pertain to the assessment year in question.
The assessee, Vagad Visha Oswal Chovisi Mahajan Charitable Trust filed its return declaring nil income after claiming exemption under Section 11. However, the AO reopened the assessment in view of information received that the assessee deposited ₹73.29 lakh in a savings bank account which has not been disclosed for taxation.
Therefore, the AO completed the assessment under Section 147 and made additions in respect of unexplained cash deposits and denial of exemption.
The assessee claimed that the reopening of the case was invalid as the cash deposits were made on 31.03.2009 which fell in Financial Year 2008-09 relevant to Assessment Year 2009-10 and not Assessment Year 2010-11.
Moreover, it has already been considered in Assessment Year 2009-10 and even deleted in the appellate case. Hence, the reopening case lacked jurisdiction and was based on incorrect facts.The Department relied on the findings of the First Appellate Authority.
The Tribunal observed that the reasons recorded by the AO clearly mentioned that the cash deposits were made on 31.03.2009. This pertained to Assessment Year 2009-10. Hence, there was no material to show that there was escapement of income for Assessment Year 2010-11.
The ITAT held that reopening has to be based on year-wise specific tangible material to show escapement of income. Moreover, the AO has recorded common reasons for several years without proper application of mind.
The Bench headed by Saktijit Dey [Vice President] and Jagadish [Accountant Member] quashed the reassessment proceedings and set aside the orders of the lower authorities. It held that the Assessing Officer (AO) assumed jurisdiction in the matter without any valid reasons.
Accordingly, the ITAT declared the reassessment proceedings as without jurisdiction and quashed the assessment order, allowing the appeal of the assessee.
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