Reassessment notice compliance: a shorter-than-statutory section 148 notice is jurisdictionally invalid and voids reassessment.

Reopening under section 147 is supported where the Assessing Officer has relevant material to form a bona fide belief that income has escaped assessment; conclusive proof is not required at the reopening stage, and the jurisdictional condition is satisfied if the belief rests on material such as cash credits, creditor links, and doubts about genuineness. After the amendment to section 148 effective from 1-4-1989, a notice must allow the statutory minimum period of thirty days; a notice granting only thirty days from service fails to comply with that requirement. The defect is jurisdictional and not curable by waiver or subsequent compliance, so reassessments founded on such notices are invalid and void.

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Issues: (i) Whether the Income-tax Officer had material to form the requisite belief that income had escaped assessment so as to justify reopening under section 147. (ii) Whether notices issued under section 148, requiring returns within thirty days, were valid after the amendment to section 148 and, if invalid, whether the reassessments were void.

Issue (i): Whether the Income-tax Officer had material to form the requisite belief that income had escaped assessment so as to justify reopening under section 147.

Analysis: The recorded reasons were based on later scrutiny of the assessee's cash credits, the relationship of the creditors to the partners, the absence of satisfactory capacity to advance funds, and earlier correspondence indicating doubt about genuineness. The belief need not be established by conclusive proof at the reopening stage; it is sufficient if relevant material exists to support a bona fide formation of belief, and the authority is not confined to suspicion alone.

Conclusion: The reopening was supported by relevant material and the condition for assumption of jurisdiction under section 147 was satisfied.

Issue (ii): Whether notices issued under section 148, requiring returns within thirty days, were valid after the amendment to section 148 and, if invalid, whether the reassessments were void.

Analysis: After the amendment with effect from 1-4-1989, section 148 required a minimum period of thirty days. The proceedings were initiated after that date, so the amended provision applied. A notice allowing only thirty days from the date of service did not comply with the statutory requirement of a minimum period of thirty days, and the defect was jurisdictional. The defect was not curable by compliance by the assessee or by waiver, because the notice was a condition precedent to valid reassessment proceedings.

Conclusion: The notices under section 148 were invalid and the reassessments made pursuant to them were illegal and void.

Final Conclusion: The assessee succeeded on the jurisdictional challenge to the reassessment notices, resulting in cancellation of the reassessment orders.

Ratio Decidendi: In reassessment proceedings, strict compliance with the statutory notice requirement is a condition precedent to jurisdiction, and a notice that fails to satisfy the minimum statutory period vitiates the resulting reassessment.

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