Reassessment notice issuance and service are distinct, while unexplained cash credit on share-sale receipts may warrant fresh verification.

Timely issue of a reassessment notice under the Income-tax Act, 1961 was treated as distinct from its service: where notice is issued within limitation, jurisdiction to reopen is not defeated merely because service is alleged after the cut-off date. On the share-sale receipts added as unexplained cash credit, the Tribunal noted inadequate verification material, including missing purchase, sale, PAN and address details, but also held that the assessee should get a fresh opportunity. The matter was therefore remanded for de novo examination with liberty to draw an adverse inference if supporting evidence is not produced.

---

---

Issues: (i) Whether the reassessment was invalid because notice under section 148 was allegedly not served before the limitation date. (ii) Whether the addition treating the share-sale receipts as unexplained cash credit under section 68 should be sustained or the matter should be remanded for fresh verification.

Issue (i): Whether the reassessment was invalid because notice under section 148 was allegedly not served before the limitation date.

Analysis: The distinction between issue of notice and service of notice under the reassessment scheme of the Income-tax Act, 1961 was applied. Once notice is issued within the prescribed limitation, jurisdiction to proceed is attracted, while service is a condition for completing the reassessment and not for conferring jurisdiction. On the facts, the challenge based solely on alleged non-service before 31.03.2018 did not invalidate the reopening.

Conclusion: The reassessment was held valid on this ground, against the assessee.

Issue (ii): Whether the addition treating the share-sale receipts as unexplained cash credit under section 68 should be sustained or the matter should be remanded for fresh verification.

Analysis: The receipts were claimed to represent sale proceeds of investments in shares, but the supporting particulars such as complete purchase details, sale particulars, PANs, and addresses of the counterparties were not available for effective independent verification under section 133(6). At the same time, the Tribunal considered that the assessee's plea that the amounts arose from sale of shares had not been properly examined in a fair manner, and that a fresh opportunity should be granted. The matter was therefore sent back to the Assessing Officer for de novo consideration with liberty to draw adverse inference if the assessee failed to furnish the required material.

Conclusion: The addition was not finally sustained and the issue was remanded for fresh adjudication, in favour of the assessee to that extent.

Final Conclusion: The appeal succeeded only to the limited extent of remand on the addition issue, while the challenge to reopening failed.

Ratio Decidendi: For reassessment, timely issue of notice under the Income-tax Act, 1961 is distinct from service of notice, and an unexplained cash credit dispute may be remanded where the assessee's claim requires fresh factual verification but the existing material is insufficient for a final finding.

---