Limitation for reopening assessment runs from the assessee's year, making late notice ineffective to confer jurisdiction.

The limitation period for notice under Section 34(1)(b) was held to run from the assessee's assessment year, not from the date of a Section 23-A order against the company. Section 23-A was treated as procedural and not as authority to reopen the shareholder's assessment. Because the notice was served after the four-year period, valid service of notice, as a condition precedent to jurisdiction under Section 34, was absent. The notice was therefore time-barred, the reassessment lacked jurisdiction, and the reassessment was invalidated in favour of the assessee.

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Issues: Whether the notice issued under Section 34(1)(b) was barred by limitation and therefore incapable of conferring jurisdiction to reopen and reassess the assessee notwithstanding an order under Section 23-A.

Analysis: The limitation under Section 34(1)(b) was held to run with reference to the assessee's assessment year and not from the date of the order under Section 23-A passed against the company. Section 23-A was treated as a procedural provision which did not by itself authorise reassessment of the shareholder. Since the notice was served after expiry of the four-year period, the valid service of notice, being a condition precedent to jurisdiction under Section 34, was absent.

Conclusion: The notice under Section 34(1)(b) was time-barred and ineffective to confer jurisdiction; the reassessment was invalid and was set aside in favour of the assessee.

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