Reassessment jurisdiction fails when no addition is made on the very income items forming the basis of reopening.

Reassessment under the Income-tax Act was found to lack jurisdiction where the assessment order made no addition on the very items that formed the basis of the Section 148A notice and recorded reasons. The reopening was founded on specified information concerning rent receipts, time deposits and interest income, but those items were not brought to tax in the reassessment. Once the foundational reasons were not sustained by any corresponding addition, the basis of the reassessment stood displaced and the assessment could not survive. The reopening and consequent assessment were therefore quashed as without jurisdiction.

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Issues: Whether reassessment and the consequent assessment were without jurisdiction where no addition was made on the very items forming the basis of the notice and order under Section 148A of the Income-tax Act, 1961.

Analysis: The recorded reasons and the notice under Section 148A(b) proceeded on specified information relating to rent receipts, time deposits and interest income. The assessment order, however, did not make any addition on those very items. Once the Assessing Officer did not bring to tax the income which formed the foundation of the reopening, the basis of the reassessment proceedings stood displaced and the assessment could not survive on that footing.

Conclusion: The reopening and the consequent assessment were held to be without jurisdiction and were quashed.

Ratio Decidendi: Where reassessment is initiated on specific recorded reasons but no addition is made on those very reasons, the reassessment lacks jurisdiction and is liable to be quashed.

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