When foundation of reopening does not survive, no addition can be made for other issues

When foundation of reopening does not survive, no addition can be made in respect of other issues – ITAT

In a recent judgment, ITAT Delhi has held that when the very foundation of reopening does not survive, no addition can be made in respect of other issues based on such invalid assumption of jurisdiction.

ABCAUS Case Law Citation:
4968 (2025) (12) abcaus.in ITAT

In the instant case, the Revenue had challenged the order passed by the CIT(A) in deleting additions made by the AO vide assessment order passed u/s 147 r.w. Section 143(3) of Income Tax Act 1961 (the Act).

The case of the respondent assessee was reopened and a notice u/s 148 of the Act was issued which was subsequently treated as notice issued u/s 148A(b) of the Act as per the Judgment of Hon’ble Supreme Court in the case of Aashish Agarwal. 

In compliance with the Judgment of Hon’ble Supreme Court, the copy of the reasons recorded served on the assessee, wherein it was alleged that the assessee had unexplained credit in the bank account which could not be explained by the assessee before the Investigating Wing.

After considering the objection filed by the Assessee, A.O. passed order u/s 148A(d) of the Act recording satisfaction that a large amount of the credits remained unexplained and thus the same constitute income which had been escaped assessment. 

An assessment order was passed u/s 147 r.w. Section 143(3) of the Act by making several additions

The CIT(A) allowed the Appeal of the Assessee by deleting all the additions made by the A.O.  Aggrieved by the order of the CIT(A) the Department preferred the instant Appeal. 

Before the Tribunal, assessee submitted that the CIT(A) deleted the addition made on account of unexplained credit in the bank account which was the sole basis for reopening the assessment, as the Department had not challenged the said deletion of the addition, the ground raised against the deletion of other additions made by the A.O. on different issues cannot be sustained before the Tribunal. 

The Tribunal observed that the addition made on account of  unexplained credit in the bank account which was the sole basis for reopening the assessment had not been challenged by the Revenue.  Thus, the Revenue had no grievance against the deletion of the said addition by the CIT(A) which was the sole basis for reopening of the assessment. 

The Tribunal held that it is well settled law that when the very foundation of reopening does not survive, no addition can be made in respect of other issues based on such invalid assumption of jurisdiction as held in the catena of Judgments.

Considering the above facts and circumstances, the Tribunal opined that there was no merits in the grounds of appeal of the Revenue, accordingly the Appeal of the Revenue was dismissed.

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