R.K.UPADHYAYA versus SHANABHAI P. PATEL

Citation: [1987] 3 S.C.R. 42 · Decided: 28-04-1987 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
R.K.UPADHYAYA 
v. 
SHANABHAI P. PATEL 
APRIL 28, 1987 
[RANGANATH MISRA AND G.L. OZA, jJ.] 
Income Tax Act, 1961/Income Tax Act, 1922-Sections 147, 148 
and 149/Section. 34--Notice for reassessment-Issuance of-'!Ssue of 
notice' and 'service of notice'-Distinction between-Reassessment not 
to be made until there has been service-Requirement of issue of notice 
C satisfied when a notice is actually issued. 
D 
The respondent challenged the notice for reassessment issued 
under s. 147(b) of the Income Tax Act, 1961 for the assessment year 
1965-66. The High Court quashed the notice holding that the action of 
the Income Tax Otlicer was barred by limitation prescribed by the Act. 
Allowing the appeal of the Revenue, 
HELD: I. The scheme of the 1961 Act so far as notice for reas-
sessment is concerned is quite different. What used to be contained in s. 
34 of the 1922 Act has been spread out into three sections, being ss. 147. 
E 148 and 149 of the 1961 Act. 
2. A clear distinction has been made out between "issue of 
notice" and "service of notice" under the 1961 Act. Section 149 
prescribes the period of limitation. It categorically prescribes that no 
notice under s. 148 shall be issued after the prescribed limitation has 
F lapsed. Section 148(1) provides for service of notice as a condition 
precedent to making the order of assessment. Once a notice is issued 
within the period of limitations, jurisdiction becomes vested in the 
Income Tax Otlicer to proceed to reassess. The mandate of s. 148(1) is 
that reassessment shall not be made until there has been service. The 
requirement of issue of notice is satisfied when a notice is actually 
G issued. 
Banarsi Debi & Anr. v. I. T. 0. District W, Calcutta & Ors., 53 
ITR 100; Ianni v. Indu Prasad Bhat, 72 ITR 595 and C.I. T. v. Robert, 
48 ITR 177, distinguished. 
H 
In the instant case, notice was issued within the prescribed period 
42 
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R.K. UPADHYAYA v. SHANABHAJ [MISRA, J.] 
43 
or limitation as March 31, 1970 was the last day or that period. Service 
under the new Act is not a condition precedent to conferment of juris-
diction in the Income Tax Ollicer to deal with the matter but it is a 
condition precedent to making or the order or assessment. The High 
Court lost sight or the distinction and under a wrong basis felt bound by 
the judgment in Banarsi Debi & Anr. v. I. T.O., District IV, Calcutta & 
Ors., ( 53 ITR 100). As the Income Ta" Otlicer had issued notice within 
limitation the order or the High Court is vacated. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 544 
of 1975. 
From the Judgment and Order dated 20.8.1973 of the Gujarat 
High Court in Special Civil Application No. 631 of 1970. 
A 
B 
c 
{__ 
C.M. Lodha and Miss Subhashini for the Appellant. 
·~ 
.. · .<,.,,.,. 
',.:_ 
I 
The Judgment of the Court was delivered by 
D 
RANGANATH MISRA, J. This is an appeal by the Revenue by 
special leave and is directed against the judgment of the Gujarat High 
Court dated August 20, 1973 in a writ petition. The High Court 
quashed the notice for reassessment issued under section 147(b) of the 
Income-tax Act, 1961 (hereinafter referred to as 'the Act') for the 
assessment year 196.5-66. Inspite of service of notice, the assessee-
E 
respondent has not appeared. 
The High Court has quashed the notice by accepting the asses-
see's contention that the action of the Income-tax Officer was barred by 
limitation prescribed by the Act. There is no dispute that the notice in 
this case under section 147(b) of the Act was issued by registered post 
F 
on March 31, 1970, and was received by the assessee on April 3, 1970. 
To the facts of the case, section 147(b) of the Act applies. The two 
relevant provisions are in sections 148 and 149 of the Act which 
provide: 
"148(1)-Before making the assessment, reassessment or G 
recomputation under section 147, the Income-tax Officer 
shall serve on the assessee a notice containing all or any of 
the requirements which may be included in a notice under 
sub-section (2) of section 139; and the provisions of this 
Act shall, so far as may be, apply accordingly as if the 
notice were a notice issued under that sub-section. 
H 
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1
A 
B 
c 
44 
SUPREME COURT REPORTS 
(1987] 3 S.C.R. 
(2) 
"149(1) -No notice under section 148 shall be issued, 
(a) 
(b) In cases falling under clause (b) of section 147, at 
any time after the expiry of four years from the end of 
the relevant assessment year. 
(2) The provisions of sub

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