Mandatory recording of reasons before reassessment notice: failure to record reasons made the notice unsustainable and ended reference.

Recording reasons before issuing a notice for reassessment under section 148 of the Income-tax Act, 1961 was mandatory, and the undisputed failure to do so rendered the reassessment proceedings invalid from the outset. Because the statutory precondition was not met, the notice was unsustainable and no substantial or referable question of law survived under section 256(2).

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Issues: Whether non-recording of reasons before issuance of notice under section 148 of the Income-tax Act, 1961 rendered the reassessment proceedings void and gave rise to a referable question of law under section 256(2).

Analysis: The finding that no reasons had been recorded before issue of notice under section 148 was not disputed. Section 148(2) required the Income-tax Officer to record reasons before issuing such notice. In the absence of recorded reasons, the reassessment proceedings were treated as invalid from the outset and no substantial question of law survived for reference.

Conclusion: The notice under section 148 was held to be unsustainable for want of recorded reasons, and no referable question of law arose.

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