Service of notice within limitation governs reassessment under the Surtax Act; late service invalidates the proceedings.

Section 8(b) of the Companies (Profits) Surtax Act, 1964 requires the Income-tax Officer to serve a notice on the assessee within four years from the end of the relevant assessment year. The provision was construed as analogous to section 34 of the Income-tax Act, 1922, so limitation is met only by service of notice within time, not by mere issuance. As the notice was issued before the deadline but served after it, the reassessment was held invalid and was set aside in favour of the assessee.

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Issues: Whether the reassessment under section 8(b) of the Companies (Profits) Surtax Act, 1964 was invalid because the notice was served after the statutory time-limit, and whether limitation under that provision turns on service of notice rather than mere issuance.

Analysis: Section 8(b) expressly requires the Income-tax Officer to serve on the assessee a notice within four years of the end of the relevant assessment year. The provision was treated as analogous to section 34 of the Income-tax Act, 1922, rather than to section 149 of the Income-tax Act, 1961. On that construction, limitation is satisfied only when the notice is served within time. Although the notice had been issued before the deadline, it was actually served after the due date.

Conclusion: The notice was not validly served within the prescribed time-limit, and the reassessment based on that notice was liable to be set aside in favour of the assessee.

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