Timely service of reassessment notice was essential; late service could not be cured by the validating amendment.

Section 34(1)(b) of the Indian Income-tax Act, 1922 required a reassessment notice to be served within the prescribed limitation period, and the distinction between "served" in sub-section (1) and "issued" in the proviso to section 34(3) was treated as deliberate. Earlier authority was relied on to show that jurisdiction to reopen an assessment arises only on timely service, and the word "issued" in the proviso could not be used to dilute the statutory requirement of service. Section 31 of the Indian Income-tax (Amendment) Act, 1953, which referred to notices "issued" under sub-section (1), did not validate late service.

---

---

Issues: Whether, under section 34(1)(b) of the Indian Income-tax Act, 1922, a reassessment notice was valid where it was issued on the last day of the limitation period but served on the assessee after the expiry of four years from the end of the relevant assessment year, and whether section 31 of the Indian Income-tax (Amendment) Act, 1953 validated such late service.

Analysis: The governing language in section 34(1)(b) required the notice to be "served" within the prescribed period, and the distinction between "served" in sub-section (1) and "issued" in the proviso to section 34(3) was treated as deliberate. The earlier rulings construing the same provision had held that jurisdiction to reopen assessment arose only when service was within time, and that the word "issued" in the proviso could not be used to rewrite the word "served" in sub-section (1). The validating provision in section 31 of the Indian Income-tax (Amendment) Act, 1953 also referred to notices "issued" under sub-section (1) and did not cure the absence of timely service.

Conclusion: The notice was not validly served within the statutory period, the reassessment was bad in law, and the answer to the reference was in favour of the assessee.

---