Law:

Section:

Section 148 of the Income-tax Act, 1961 - Reassessment - Issue of notice - ITO issued notices under section 148 for relevant assessment years in name of 'PM and BBM' to assessee whose nomenclature was 'BBM' - Assessee filed returns and objected that notices were not issued in proper nomenclature - Whether said notices were bad and illegal and entire proceedings in pursuance of such invalid notices were also invalid and void - Held, yes Facts The assessee 'BBM' was assessed as HUF. The ITO sought to reopen the assessments for the relevant assessment years under section 147(a) and issued notices under section 148 in the name of 'PM and BBM'. Pursuant thereto the assessee filed the returns and objected to the validity of the notices and contended that the notices had not been issued in the proper nomenclature of the assessee, viz., 'BBM'. The objections of the assessee were overruled by the ITO since the notices had been served on BBM, the karta who accepted the same without any protest. The ITO further held that the wrong description of the name in the notices was a bona fide mistake for which the entire proceedings would not be vitiated. The status of the assessee was, however, shown correctly in the reassessment and no illegality resulted. On appeal, the Tribunal held that the service of a valid notice on the assessee was a condition precedent to the validity of the reassessment under section 147 and if the notices were held to be invalid, the reassessment proceedings in their entirety would be void and illegal. Notices under section 148 for both the years had been issued in the name of PM and BBM which, admittedly, was not the correct name of the assessee and the notices were, therefore, bad and illegal. The fact that the assessee had filed returns in pursuance of such invalid notices would not render the assessments made on the basis of such returns valid in law. On reference: Held It is well settled that where the notices are found to be invalid, proceedings for assessment initiated are also void and illegal. In the instant case, the Tribunal's finding that the notices under section 148 were invalid was correct. The notices being defective, even if the…

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