ITAT Panaji Sends Back Reassessment Involving Section 148 Approval and Section 80P Deduction for Fresh Decision

Background and Parties Involved

The dispute in Vividoddhesha Prathamik Grameen Krushi Sahakar Sangh Niyamit Vs ITO (ITAT Panaji) concerns a reassessment framed under Section 147 read with Section 144B of the Income Tax Act 1961 for Assessment Year 2018-19. The assessee is a primary agricultural cooperative credit society assessed in the status of an Association of Persons (AOP).

The Central issue revolves around:

  • The validity of reassessment initiated by a notice under Section 148 dated 06.04.2022, and
  • The denial of deduction under Section 80P(2)(a)(i) on the ground of non-compliance with Section 80AC due to delayed filing of return under Section 139.

The order under challenge before the Panaji Bench of the ITAT was passed by the CIT(A)/NFAC on 17.11.2025.

Brief Facts Leading to Reassessment

Non-filing of Original Return and Cash Deposit Information

  1. The assessee, being a primary grameen krushi sahakari samitee, did not file a return of income under Section 139 for AY 2018-19.
  2. Information was available on the Insight portal that cash aggregating to Rs. 2,99,86,066 had been deposited in the assessee’s bank account with Belgaum District Central Cooperative Bank Ltd.
  3. As no return of income had been filed explaining the source of these deposits, the Assessing Officer (AO) formed a belief that income chargeable to tax had escaped assessment.

Initiation of Reassessment under Section 147

  • On this basis, a notice under Section 148 was issued on 06.04.2022.
  • In response, the assessee filed a return declaring nil income, claiming deduction of Rs. 15,75,509 under Section 80P(2)(a)(i).
  • Subsequently, the AO issued notices under Section 142(1) as well as show-cause notices under Section 144.

After considering the material and submissions, the reassessment was finalized on 20.03.2024 under Section 147 read with Section 144B, determining total income at Rs. 15,75,509. This amount represented the disallowance of the deduction claimed under Section 80P(2)(a)(i) by invoking Section 80AC, on the ground that the original return had not been filed within the permissible time under Section 139.

Proceedings before CIT(A)/NFAC

Appeal and Grounds before First Appellate Authority

Aggrieved by the reassessment, the assessee approached the CIT(A)/NFAC. The key planks of challenge were:

  • The assessee being a primary agricultural cooperative credit society, eligible for deduction under Section 80P.
  • The denial of the deduction solely due to the provision of Section 80AC and alleged delayed filing under Section 139(1).
  • Levy of interest under Section 234A, Section 234B, Section 234C and fee under Section 234F for failure to furnish return within time.
  • The assessee also alleged that the CIT(A) failed to properly evaluate the facts and had decided against it due to non-filing of detailed written submissions.

Decision of CIT(A)/NFAC

The CIT(A)/NFAC examined the record and dismissed the appeal, affirming the AO’s action of:

  • Treating the reassessed income at Rs.