Reassessment of non-resident partner income requires notice to the firm, not the partner alone, for valid jurisdiction.

For reassessment of a non-resident partner's share income under section 23(5)(a), the firm was the assessee, because the statutory scheme assessed the firm while linking the tax rate to the partner's status. A reassessment notice under section 34 had to be served on the entity sought to be reassessed, so a notice addressed only to the individual partner, with the firm described merely as representative, was insufficient. The notice was invalid and the reassessment was without jurisdiction; the reassessment orders were therefore unsustainable.

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Issues: (i) Whether, for reassessment of the share income of a non-resident partner of a registered firm, the assessee under the second proviso to section 23(5)(a) was the firm or the individual partner; (ii) Whether the notice issued for reassessment under section 34 was valid when addressed to the individual partner as represented by the firm.

Issue (i): Whether, for reassessment of the share income of a non-resident partner of a registered firm, the assessee under the second proviso to section 23(5)(a) was the firm or the individual partner.

Analysis: The operative part of section 23(5)(a) treats the firm as the assessee when the total income of the firm is assessed. The second proviso requires the share of a non-resident partner to be assessed on the firm at the rate applicable if it were assessed on the partner personally, and the tax so determined is payable by the firm. On that scheme, the assessment entity is the firm, though the rate is linked to the non-resident partner's status.

Conclusion: The assessee was the firm, not the individual partner.

Issue (ii): Whether the notice issued for reassessment under section 34 was valid when addressed to the individual partner as represented by the firm.

Analysis: A notice under section 34 is a condition precedent for valid reassessment and must be served on the entity sought to be reassessed. The notice in question was addressed to the individual non-resident partner and only described the firm as his representative. A firm can represent a partner, but not vice versa, so the notice did not amount to service on the firm as required for reassessment of the firm's income.

Conclusion: The notice was invalid and the reassessment proceedings were without jurisdiction.

Final Conclusion: The reassessment orders were unsustainable because the proceedings were initiated against the firm without a proper notice under the governing reassessment provision, and the reference was answered against the revenue.

Ratio Decidendi: In reassessment of a non-resident partner's share under section 23(5)(a), the firm is the assessee, and a reassessment notice must be served on the entity actually sought to be reassessed; service addressed to the partner alone is insufficient to validate reassessment of the firm.

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