Invalid service of reopening notice defeats reassessment and quashes the consequent assessment under income-tax law

Notice under section 148 was invalid because it was sent to an incorrect address, and the affixation report also showed that wrong address. The record did not contain reliable proof that substituted service was effected at the correct address or that the statutory requirements for such service were complied with. As a result, the reopening under section 147 was held to be bad in law, and the assessment framed under section 144 was quashed in favour of the assessee.

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Issues: Whether the notice under section 148 of the Income-tax Act, 1961 was validly served and, if not, whether the reassessment and consequential assessment could be sustained.

Analysis: The notice issued for reopening was found to have been sent to an incorrect address, and the report of service by affixation also reflected the same wrong address. There was no reliable proof that the notice had been affixed at the correct address, and the record did not establish valid compliance with the requirements for substituted service.

Conclusion: The notice under section 148 was held to be invalid, the reopening under section 147 was held to be bad in law, and the assessment framed under section 144 was quashed in favour of the assessee.

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