ivil Appeal No 544 of 1975
From the Judgment and Order dated 208
1973 of the Gujarat High Court in Special Civil Application No 631 of 1970
CM Lodha and Miss Subhashini for the Appellant
The Judgment of the Court was delivered by 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 147b of the Income tax Act 1961 hereinaf ter referred to as the Act  for the assessment year 1965 66
Inspite of service of notice the assessee respondent has not appeared
The High Court has quashed the notice by accepting the assessee 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 147b of the Act was issued by registered post on March 31 1970 and was received by the assessee on April 3 1970
To the facts of the case section 147b of the Act applies
The two relevant provisions are in sections 148 and 149 of the Act which provide 1481 Before making the assessment reas sessment or 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
44 2       1491 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 as sessment year
2 The provisions of sub section 1 as to the issue of notice shall be subject to the provisions of section 151 The High Court relied upon the decision of this Court in the case of Banarsi Debi  Anr
T 0 District IV Cal cutta  Ors where the validity of a notice under section 341 of the Incometax Act 1922 and the scope of section 4 of the Income tax Amendment Act of 1959 by which sub section 4 was introduced into section 34 were considered
This Court indicated keeping the provisions of section 34 in view that there was really no distinction between issue and service of notice
Section 34 sub section 1 as far as relevant provided thus 341 If a       b   he may in cases falling under clause a at any time within 8 years and in cases falling under clause b at any time within four years at the end of that year serve on the assessee   and may proceed to assess or reassess such income    Section 34 conferred jurisdiction on the Income tax Officer to reopen an assessment subject to service of notice within the prescribed period
Therefore service of notice within limitation was the foundation of jurisdiction
The same view has been taken by this Court in Janni vs Indu Prasad Bhat as also in CIT vs Robert The High Court in our opinion went wrong in relying upon the ratio of in disposing of the case in hand
The scheme of the 1961 Act so far as notice for reassessment is concerned is quite different
What used to be contained in section 34 of the 1922 Act has been spread out into three sections being sections 147 148 and 149 in the 45 1961 Act
A clear distinction has been made out between issue of notice  and service of notice  under the 1961 Act
Section 149 prescribe the period of limitation
It categorically prescribes that no notice under section 149 shall be issued after the prescribed limitation has lapsed
Section 1481 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 Officer to proceed to reassess
The mandate of section 1481 is that reassessment shall not be made until there has been service
The require ment of issue of notice is satisfied when a notice is actu ally issued
In this case admittedly the notice was issued within the prescribed period of limitation as March 31 1970 was the last day of that period
Service under the new Act is not a condition precedent to conferment of jurisdic tion in the Income tax Officer to deal with the matter but it is a condition precedent to making of the order of as sessment
The High Court in our opinion lost sight of the distinction and under a wrong basis felt bound by the judg ment in As the Income tax Officer had issued notice within limitations the appeal is allowed and the order of the High Court is vacated
The Income tax Officer shall now proceed to complete the assessment after complying with the requirements of law
Since there has been no ap pearance on behalf of the respondents we make no orders for costs
APJ Appeal allowed


Summary:
The respondent challenged the notice for reasessment issued under section 147b 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 Officer was barred by limitation prescribed by the Act
Allowing the appeal of the Revenue HELD 1
The scheme of the 1961 Act so tar as notice for reassessment is concerned is quite different
What used to be contained in section 34 of the 1922 Act has been spread out into three sections being sections 147
148 and 149 of the 1961 Act
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 categor ically prescribes that no notice under section 148 shall be issued after the prescribed limitation has lapsed
Section 1481 provides for service of notice as a condition prece dent to making the order of assessment
Once a notice is issued within the period of limitations jurisdiction be comes vested in the Income Tax Officer to proceed to reas sess
The mandate of section 1481 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 issued
Banarsi Debi  Anr
vs L TO District IV Calcutta  Ors  Janni vs Indu Prasad Bhat and CIT vs Robert  distinguished
In the instant case notice was issued within the prescribed period 43 of limitation as March 31 1970 was the last day of that period
Service under the new Act is not a condition prece dent to conferment of jurisdiction in the Income Tax Officer to deal with the matter but it is a condition precedent to making of the order of assessment
The High Court lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Debi  Anr
T 0 District IV Calcutta  Ors  As the Income Tax Officer had issued notice within limitation the order of the High Court is vacated