Time-barred reassessment under the old law cannot be revived by later notices, consent, or unrelated later-year concealments.

Reopening under section 148 of the Income-tax Act, 1961 for assessment year 1950-51 was held invalid because the power to reopen had already become time-barred under the Indian Income-tax Act, 1922 before the new Act commenced. The later notice issued in 1965 was therefore without jurisdiction, and the attempted reliance on alleged concealments from later years could not extend the statutory limitation beyond the relevant year or the years covered by the proviso. Consent, settlement, or subsequent conduct could not cure the jurisdictional defect, and the rectification application under section 154 was maintainable. The assessee succeeded.

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Issues: Whether the reassessment initiated under section 148 of the Income-tax Act, 1961 for assessment year 1950-51 was barred in law because the right to reopen had already become time-barred under the Indian Income-tax Act, 1922, and whether the order rejecting rectification under section 154 could therefore be cancelled.

Analysis: The assessment year involved was 1950-51, and the court held that the reopening could have been valid only if the power to reopen was still alive under the 1922 Act when the 1961 Act came into force. Since the reopening period had already expired by 31 March 1959, the subsequent notice issued in 1965 was without jurisdiction. The attempt to justify reopening by aggregating alleged concealments for later years was rejected, because the statutory enlargement of limitation could operate only on the basis of escaped income for the relevant year or prior years contemplated by the proviso, and not by including years subsequent to 1950-51. The court also held that consent, settlement, or later conduct of the assessee could not validate an initiation that was itself unlawful, and that no disputed question of fact prevented the matter from being dealt with under section 154.

Conclusion: The reassessment was invalid and the rectification application was maintainable; the assessee succeeded on both questions.

Ratio Decidendi: Where the power to reopen an assessment had already become barred under the earlier law before the new Act came into force, a later notice under section 148 of the Income-tax Act, 1961 is without jurisdiction, and such jurisdictional defect cannot be cured by consent, settlement, or reliance on later-year concealments outside the statutory scheme.

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