Mandatory assessment notice defect does not nullify proceedings where jurisdiction exists; fresh assessment may be directed.

Failure to issue the notice required for completing an income-tax assessment did not, by itself, make the assessment proceeding a nullity where the assessing authority otherwise had jurisdiction. The defect prevented completion of the assessment in the prescribed manner, but it did not require annulment under the provision governing annulment of assessments. The appellate authority was therefore entitled to set aside the assessment and direct a fresh assessment, and that course was valid because the assessment order showed some enquiry and consideration of material before completion.

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Issues: Whether the Appellate Assistant Commissioner was justified in setting aside an assessment made without a notice under section 23(2) of the Income-tax Act, 1922 and directing a fresh assessment, or whether the assessment ought to have been annulled.

Analysis: The absence of notice under section 23(2) did not deprive the Income-tax Officer of ab initio jurisdiction over the assessment proceedings. The defect prevented completion of the assessment under section 23(3), but it did not render the entire proceeding a nullity in the sense required for annulment under section 31(3)(a). The Appellate Assistant Commissioner was therefore entitled to proceed under section 31(3)(b) and set aside the assessment with a direction for a fresh assessment. The assessment order also disclosed some enquiry and consideration of material before completion, supporting the view that the order could be set aside rather than annulled.

Conclusion: The Appellate Assistant Commissioner correctly exercised power under section 31(3)(b) and the direction for fresh assessment was valid.

Final Conclusion: The reference was answered in favour of the Revenue, and the appellate authority's order setting aside the assessment and directing a fresh assessment was upheld.

Ratio Decidendi: Failure to issue a mandatory notice required for completing an assessment does not, by itself, make the assessment proceeding a nullity; where the assessing authority had overall jurisdiction, the appellate authority may set aside the assessment and direct a fresh assessment rather than annul it.

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