Valid service of reassessment notice is essential; reopening fails where notice under section 148 is not proved to be served properly.

Reassessment under section 148 could not be sustained because valid service of the notice was not proved. The assessee consistently disputed receipt, and the record did not show service on the assessee or on an authorised agent capable of accepting notice. The Tribunal noted that the Assessing Officer did not address this objection and that the first appellate authority relied only on alleged service on a person who merely appeared to be a representative. Applying section 282 of the Income-tax Act and the rules governing service, the Tribunal held that reopening was invalid and cancelled the reassessment order in favour of the assessee.

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Issues: Whether the reassessment initiated under section 148 was valid when service of notice was disputed and it was not shown that the notice had been served on the assessee or on an authorised agent.

Analysis: The assessee consistently objected that no notice under section 148 had been served on it before the prescribed date and that the alleged recipient was neither a partner nor an employee nor an authorised person. The Tribunal noted that the Assessing Officer did not deal with this objection in the reassessment order and that the first appellate authority proceeded only on the basis that the notice had been served on a person who merely appeared to be a representative. Referring to section 282 of the Income-tax Act, 1961 and the service requirements under Order V of the Code of Civil Procedure, 1908, the Tribunal held that valid service must be on the assessee or on a person duly authorised to accept service, which was not proved on the record.

Conclusion: The notice under section 148 was not proved to have been validly served, the reopening was invalid, and the reassessment order was cancelled in favour of the assessee.

Ratio Decidendi: A reassessment cannot be sustained unless service of notice under section 148 is proved in accordance with section 282 of the Income-tax Act, 1961 and the applicable rules of service, including service on an authorised recipient.

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