Reopening Assessment on Previously Examined Issue Without Fresh Material Is Invalid: ITAT
The Income Tax Appellate Tribunal (ITAT), Mumbai, clarified that an Assessing Officer cannot review or revisit his earlier view without any tangible material.
During the assessment, the Assessing Officer made additions for many items, such as transfer fees, parking collections, advertisement income, and the interest on delayed payment and additional maintenance, amounting to a total of Rs 1,11,89,292. This was challenged before the CIT(A), which deleted the additions of Rs 66,12,901 following the order of ITAT Mumbai and using the doctrine of mutuality.
The AO reopened the case and completed the assessment under section 147 of the Act on 18.05.2023, where he made an addition towards the interest earned from the investment of the cooperative bank, amounting to Rs 59,46,932 and towards an income of Rs 72,41,022, received from several parties. He further made an addition of Rs. 15,13,260 towards service tax. The assessee again filed an appeal before the CIT(A). The CIT(A) set aside the assessment order and sent the matter to AO for fresh consideration, holding that it was ex parte without considering the legal grounds of the assessee. Therefore, the assessee appealed before the Tribunal.
The assessee challenged the validity of the notice under section 147, saying that there was no tangible material on which the notice under section 148 could be issued. The assessee also cited various decisions, including the decision of the Supreme Court in the case of Kerala State Co-operative Agricultural & Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC), which concluded that the interest earned from investments made with a cooperative bank can be claimed for deduction under section 80P(2)(d). The other judgment of the Hon’ble Supreme Court in PCIT v. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd concluded that section 80P(4) is attracted only when the assessee is a co-operative bank. Therefore, the interest earned from a co-operative bank by a co-operative society is eligible for deduction under section 80P(2)(d).
The Tribunal observed that the issue regarding the deduction claimed under section 80P of the Income Tax Act was already considered in the original assessment, and the same was already decided by the Supreme Court.
The ITAT noted that the notice under section 148 was based on recorded reasons, and during the assessment, the AO again believed that the income was taxable. The Tribunal highlighted the proposition of law that an assessing officer cannot review his earlier opinion without any fresh, tangible material.
Therefore, the reassessment order passed under section 147 dated 18/05/2023, was quashed by the Tribunal, holding that if an issue has already been examined, reopening it is unsustainable in law.
Case Citation: The Panchratna Co-operative Housing Society Ltd Vs ITO (ITAT Mumbai); I.T.A No. 1433/MUM/2025; 25/11/2025; 2013-14
