COMMISSIONER OF INCOME-TAX Vs. KISHORE CHAND

JUDGEMENT

(1.) THE matter here pertains to limitation for reassessment, in pursuance of a notice under Section 148 of the Income-tax Act, 1961, the point in issue being whether limitation is to be seen from the date of the issuance of the notice under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), or from the date when such notice is actually served upon the assessee ?

(2.) WHAT had happened in this case was that with regard to the assessment year 1960-61, notice under Section 148 of the Act for reassessment was issued to the assessee on March 28, 1969. This notice was served upon the assessee on April 1, 1969. Following the judgment of this court in Tikka Khushwant Singh v. CIT [1975] 101 ITR 106, the Tribunal held the reassessment proceedings to be barred by time as issuance of notice under Section 148 of the Act was also held to mean service of that notice upon the assessee. This is what has led to the following question being referred for our opinion : "whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the cancellation of the assessment by the Appellate Assistant Commissioner as without jurisdiction ?"

(3.) THE controversy here now stands settled by the judgment of the Full Bench of this court in Jai Hanuman Trading Co. Pvt. Ltd. v. CIT [1977] 110 ITR 36, where it has been laid down that in the scheme of the Income-tax Act, 1961, limitation under Section 149 of the Act has been prescribed with reference to the issuance of the notice and not its service upon the assessee. The earlier judgment of this court in Tikka Khushwant Singh case [1975] 101 ITR 106 was specifically overruled. It follows, therefore, that if a notice under Section 148 of the Act is issued before the expiry of limitation, the proceedings will not be held to be barred by time even if such notice is not served upon the assessee till a date beyond such period of limitation.