Law:

Section:

Section 149 of the Income-tax Act, 1961 - Reassessment - Period of limitation - ITO, a while initiating reassessment proceedings under sections 147 and 148, sent notice which was signed on 30-3-1970 and was issued on 31-3-1970, to assessee - Notice was admittedly served on her in first week of April 1970 - Assessee contended that notice though issued within prescribed time limit was not served within limitation period and was, therefore, illegal and without jurisdiction - ITO, however, made best assessment under section 144 and also imposed penalty under section 271(1)(a) - Tribunal annulled both reassessment and penalty proceedings by accepting aforementioned contention of assessee - Whether limitation provision of section 149 envisaged only issuance of notice to assessee and not its actual service on him and, therefore, reassessment proceedings and resultant penalty proceedings were wrongly annulled by Tribunal - Held, yes Facts For initiating reassessment proceedings under sections 147 and 148, the ITO sent a notice for reassessment which was actually signed by him on 30-3-1970 but was admittedly issued by registered post on 31-3-1970 to the assessee. The assessee was actually served with the notice later in the first week of April 1970. She contended that the notice, though issued within the limitation period, had not been served within eight years from the end of the relevant assessment year and was, hence, illegal and without jurisdiction. The ITO rejected this contention and made a best assessment under section 144. He also initiated penalty proceedings and imposed penalty under section 271(1)(a). The AAC rejected the assessee's appeals. On further appeal, the Tribunal purportedly, following the Supreme Court's in the case of Banarsi Debi v. ITO [1964] 53 ITR 100, annulled the reassessment as also the penalty proceedings on the ground that a notice of reassessment issued against the assessee before the limitation date prescribed under section 149 but served on the assessee after such date would be without jurisdiction and, thus, void and inoperative. On reference: Held A comparison of section 34 of the 1922 Act with section 149 of the 1961 Act (which…

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