Reassessment Jurisdiction fails when reopening grounds are not assessed and only an unrelated addition is made

Reassessment under the substituted sections 147 and 148 must be anchored to the specific information recorded in the section 148A(b) notice and considered under section 148A(d). Where no addition is made on the very material forming the basis of reopening, but the reassessment adds an unrelated unsecured loan issue under section 68, the reassessment cannot survive because the Assessing Officer must first assess the income for which the case was reopened before examining other income. On that basis, the reassessment was held without jurisdiction and quashed, with the appeal allowed in favour of the assessee.

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Issues: Whether reassessment proceedings initiated under sections 147 and 148, following notice under section 148A(b), could be sustained when no addition was made on the very information forming the basis of reopening and the only addition was on an unrelated issue.

Analysis: The substituted reassessment scheme under the Finance Act, 2021 anchors jurisdiction to the specific information disclosed in the section 148A(b) notice and considered under section 148A(d). The reopening in this case was founded on certain bank, GST, TDS and other portal-based information, but no addition was made on those very issues in the reassessment order. The only addition related to an unsecured loan under section 68, which did not form part of the recorded basis for reopening. Applying the principle that the Assessing Officer must first assess or reassess the income for which the case was reopened before proceeding to any other income, the reassessment could not survive once its foundational issue was not assessed.

Conclusion: The reassessment was without jurisdiction and was quashed. The appeal was allowed in favour of the assessee.

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