Reassessment notice invalid where prior reasons and Commissioner sanction were conditions precedent to jurisdiction under reopening law.

Reopening under section 34(1)(a) of the Indian Income-tax Act, 1922 was treated as jurisdictionally invalid because the Income-tax Officer had to record reasons and, in the relevant class of cases, obtain the Commissioner's satisfaction before issuing notice. The Court applied the principle that these statutory requirements were conditions precedent, not mere procedural steps. As the requisite approval or sanction was not obtained and the recorded reasons were not forwarded for consideration, the reassessment notice and consequent proceedings were held bad in law and invalid at the root.

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Issues: Whether the reassessment notice and proceedings initiated under section 34(1)(a) of the Indian Income-tax Act, 1922 were valid in law in the absence of the Commissioner's approval and compliance with the statutory preconditions.

Analysis: The reference turned on the validity of the reopening under section 34(1)(a). The statutory proviso required the Income-tax Officer to record reasons and, in the relevant class of cases, obtain the Commissioner's satisfaction that the matter was fit for notice. The Court held that these requirements were not merely procedural but conditions precedent to jurisdiction. Since the Tribunal had found that the approval or sanction of the Commissioner was not obtained and the recorded reasons were not forwarded for consideration, the notice and the reassessment proceeding were invalid. The Court rejected the department's construction of the proviso and followed the binding principle that failure to satisfy the statutory preconditions vitiates the reassessment at its root.

Conclusion: The reassessment notice and the proceeding under section 34(1)(a) were bad in law, and the Tribunal was right in holding that the assessment was not valid.

Ratio Decidendi: Where a reassessment provision makes prior recording of reasons and the requisite sanction or satisfaction of the designated authority a condition precedent, non-compliance destroys jurisdiction and renders the notice and the reassessment proceeding invalid.

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