Mandatory scrutiny notice requirement invalidates reassessment and prevents revisionary action founded on the void assessment order.

Reassessment notices may be issued to an LLP following conversion of a partnership firm because the LLP succeeds to the firm's assets, liabilities, rights and pending proceedings. Investigation material concerning transactions with an accommodation-entry provider may constitute prima facie material for reopening, and prior approval must exist before notice issuance. However, notice under section 143(2) is mandatory before reassessment is finalised; its absence renders the reassessment order void rather than a curable procedural defect. A void reassessment cannot support revisionary jurisdiction under section 263, so the revision order must be quashed.

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Issues: (i) Whether notice for reassessment could validly be issued to the LLP after conversion of the erstwhile partnership firm; (ii) whether reopening was invalid for lack of prima facie material or approval; (iii) whether reassessment without notice under section 143(2) was valid; (iv) whether revision under section 263 could survive where the reassessment order was invalid.

Issue (i): Whether notice for reassessment could validly be issued to the LLP after conversion of the erstwhile partnership firm.

Analysis: On conversion, the firm ceased to exist and its assets, liabilities, rights and pending proceedings vested in the LLP. The LLP was consequently the entity answerable for liabilities of the erstwhile firm; issuance of notice to it was not issuance to a non-existent person.

Conclusion: The reassessment notice issued to the LLP was valid, against the assessee.

Issue (ii): Whether reopening was invalid for lack of prima facie material or approval.

Analysis: Investigation material identified transactions with an established accommodation-entry provider, which supplied prima facie material for reopening; conclusive proof of escapement was unnecessary at that stage. The record also showed that approval for initiating reassessment was granted before issuance of notice.

Conclusion: The reopening and requisite approval were valid, against the assessee.

Issue (iii): Whether reassessment without notice under section 143(2) was valid.

Analysis: The record did not establish issuance of notice under section 143(2), and the Revenue did not controvert that omission. Such notice is mandatory before finalising reassessment; its absence is not a curable procedural defect.

Conclusion: The reassessment order was null and void, in favour of the assessee.

Issue (iv): Whether revision under section 263 could survive where the reassessment order was invalid.

Analysis: A valid assessment order is a condition precedent to assumption of revisionary jurisdiction. Since the underlying reassessment was void, it could not furnish a valid foundation for revision under section 263.

Conclusion: The revision order was quashed, in favour of the assessee.

Final Conclusion: The invalid reassessment could not support revisionary action, and the remaining challenges to the revision order were academic.

Ratio Decidendi: Revisionary jurisdiction cannot be invoked on the basis of an assessment order that is void for failure to issue a mandatory notice under section 143(2).

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