Reassessment jurisdiction fails when additions are made on grounds different from the recorded reason for reopening.

A reassessment cannot be sustained when the recorded reason for reopening concerns escaped credits in a bank account, but the completed reassessment makes additions on unrelated grounds and makes no addition on the recorded issue. The reassessment jurisdiction fails where the assessed income does not correspond to the basis on which reopening was assumed. On that footing, the ITAT Delhi held the reassessment unsustainable in law and quashed it in favour of the assessee.

---

---

Issues: Whether the reassessment was valid when the reason recorded for reopening concerned alleged escaped credits, but the assessment made addition on a different basis without making any addition on the recorded reason.

Analysis: The reopening was initiated on the basis that substantial credits in the bank account had escaped assessment. However, the reassessment order did not bring those credits to tax and instead made additions on account of unexplained expenditure and gross profit estimation. In such a situation, the reassessment could not survive because the assessed income did not match the reason recorded for assuming jurisdiction under reassessment provisions.

Conclusion: The reassessment was held to be unsustainable in law and was quashed, in favour of the assessee.

Ratio Decidendi: A reassessment based on a recorded reason cannot be sustained unless an addition is made on that very reason or the basis for reopening survives in the completed reassessment.

---