Reassessment notice invalidity: once a return is filed under section 34, a second notice cannot restart proceedings.

A notice under section 34 of the Indian Income-tax Act, 1922 set reassessment in motion, and once the assessee filed a return in compliance with that notice, the Income-tax Officer could not disregard it and start fresh proceedings on the same provision. The filing of the return removed the factual basis for alleging omission or failure to disclose material facts for a second notice. Because a valid notice under section 34 was a condition precedent to reassessment, the assessment made pursuant to the second notice was invalid and could not stand.

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Issues: Whether, after a return had been filed in compliance with an earlier notice under section 34 of the Indian Income-tax Act, 1922, the Income-tax Officer could ignore that return and initiate fresh proceedings by issuing a second notice under the same provision, and whether an assessment made on the basis of such second notice was valid.

Analysis: A notice under section 34 set the reassessment machinery in motion and attracted the same procedural scheme as an original assessment. Once a return was filed in compliance with that notice, the return could not be ignored, and the officer was bound to complete the assessment in accordance with the Act. The filing of such a return removed the factual basis for treating the case as one of omission or failure to disclose material facts so as to justify a fresh notice under the same provision. Since a valid notice under section 34 was a condition precedent to a valid reassessment, an assessment founded on an ineffective second notice could not stand.

Conclusion: The second notice under section 34 was not competent, and the assessment made pursuant to it was invalid; the answer to the reference was therefore in the negative, in favour of the assessee.

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