Reassessment notice fails when the reopening basis is expunged and the notice becomes time-barred, making reassessment void ab initio.

A reassessment notice issued under section 148 was held invalid where it rested entirely on an earlier appellate direction that had already been expunged and had attained finality. The Tribunal treated that earlier decision on identical facts as binding, and found that once the reopening direction ceased to exist, the foundation for reassessment disappeared. It also relied on section 149 to hold that the notice was time-barred and void ab initio. The reassessment orders passed pursuant to that notice therefore could not survive. The Revenue's appeals were dismissed and the assessee's cross-objection was allowed.

---

---

Issues: Whether the reassessment notice issued under section 148 of the Income-tax Act, 1961, on the basis of the earlier appellate direction, and the consequential reassessment orders, were valid in law.

Analysis: The dispute turned on the effect of the earlier Tribunal decision expunging the appellate direction that had formed the basis for reopening, and on the limitation embedded in section 149 of the Income-tax Act, 1961. The Tribunal noted that the Department accepted that the earlier decision on identical facts had attained finality and that no appeal had been filed against it. Following that binding decision, the Tribunal held that the direction to reopen the completed assessment for the earlier year could not survive. Once the foundation for issuance of notice under section 148 disappeared, the notice itself became time-barred and void ab initio, and the reassessment framed on that notice also failed.

Conclusion: The reassessment notice and the reassessment orders were held to be void ab initio, and the Revenue's appeals were dismissed. The assessee's cross-objection was allowed.

---