V.S. Desai, J.
1. The questions, which have been referred to us on this reference, arise on an application which was made by the assessee under section 27 of the Income-tax Act for cancelling the ex parte assessment and for making a fresh assessment order under section 23. His application was rejected by the Income-tax Officer and the decision of the Income-tax Officer has been confirmed by the Appellate Assistant Commissioner and also by the Tribunal. The assessee is a firm of four partners with equal shares manufacturing and selling bidis at Nasik. For the assessment year 1952-53 for which the corresponding accounting year was Samvat year 2007, the assessee submitted a return of its total income on 19th February, 1953. Thereafter notices under sections 22(4) and 23(2) for the production of the assessee's books of accounts and explaining the return were issued to the firm by the Income-tax Officer and as many as sixteen adjournments were given for the purpose at the request of the assessee extending over a period of about four years. Finally, an ex parte assessment order was made under section 23(4) on 31st January, 1957, assessing the total income at Rs. 1,64,000. The Income-tax Officer also started penalty proceedings against the assessee. It was thereafter on 15th March, 1957, that an application under section 27 was made by the assessee out of which the present reference arises.
2. In this application the assessee alleged that the Income-tax Officer's letter dated 24th January, 1957, fixing the appointment for 30th January, 1957, was served on the assessee's gumasta, Sri Parasare, on 29th January, 1957, and the said gumasta being then sick could not intimate the date to the assessee. It was, therefore, contended that the assessee had sufficient reason not to be present on 30th January, 1957, before the Income-tax Officer. It was also contended that the gumasta was not authorised to receive any notice or summons on behalf of the assessee and, therefore, the service was bad in law. It was found by the Appellate Assistant Commissioner that on 29th January, 1957, Sri Parasare was attending the assessee's shop and, therefore, was not ill as alleged by the assessee. As to the second contention raised by the assessee, it was held that Parasare, the manager of the assessee's firm, had received the notice and letters on behalf of the firm throughout the proceedings relating to the assessment year 1952-53 and the service on the manager of such letters and notices was accepted by the assessee. The manager had also accepted the demand notice and the challan, the assessment order and the notice under section 28(3) for levy of penalty and many other processes without any objection from the assessee firm. The notice under section 23(2) along with the Income-tax Officer's letter dated 4th January, 1957, fixing the appointment for 18th January, 1957, and directing the assessee to produce all evidence and informing the assessee that no further adjournment would be given were also served on the manager, Sri Parasare, and the assessee had admitted service of this notice and the letter. In view of these facts, the Tribunal came to the conclusion that Sri Parasare was acting as duly accredited agent in his dealings with the Income-tax Officer throughout, and, therefore, had the implied authority to accept service of notice on behalf of the firm. It was also pointed out by the Tribunal that since the assessee had admitted the receipt of the letter and the notice of the Income-tax Officer dated 4th January, 1957, by which the appointment was fixed for 18th January, 1957, it was incumbent on him to be present before the Income-tax Officer on that date or in any event enquire whether the prayer for adjournment had been granted or not by the Income-tax Officer. The assessee, however, remained absent on 18th January, 1957, as usual, and apparently made no effort to know whether or not the adjournment prayed for was allowed. This was in keeping with the contumacious conduct the assessee had betrayed throughout the course of the proceedings. The Tribunal, therefore, took the view that the assessee was not entitled to any indulgence.
At the instance of the assessee two questions have been referred by the Tribunal to this court. They are as follows :
'Whether on the facts and circumstances of the case and in view of the past conduct of Parasare, the service of the notice dated January 4, 1957, and letter dated January 24, 1957, on Parasare is a valid service
(2) Whether on the facts and in the circumstances of the case there was material before the Tribunal to hold that there was no sufficient cause for failure to comply with the statutory notices ?'
3. Mr. Palkhivala, learned counsel for the assessee, has urged before us two contentions. It is argued in the first place that in order that there should be a valid service, the person on whom the service is effected must have authority given to him in writing to received such service and the mere implied authority will not be enough. Secondly, he has argued that if implied authority be held as sufficient, there was no such implied authority in the present case.
Section 63(1) of the Indian Income-tax Act states :
'A notice or requisition under this Act may be served on the person therein named either by post or, as if it were a summons issued by a court, under the Code of Civil Procedure, 1908 (5 of 1908).'
4. Mr. Palkhivala's argument, therefore, is that in this case the service was neither by post nor in the manner provided for the service of summons under the Code of Civil Procedure and, therefore, was not a proper and legal service. The manner for service of summons under the Code of Civil Procedure is by service either on the person himself or on his duly authorised agent to whom the authority to receive such summons has been given in writing. Admittedly, in the present case there is no such authority in writing and, therefore, Mr. Palkhivala argues that the service in the present case on Parasare was not service as contemplated by law.
5. The mode of service of notice or requisition provided in section 63(1) of the Income-tax Act is, in our opinion, not exhaustive and it is permissible to have the notice effected in a way other than the two modes mentioned in section 63(1). That also is the view taken in an earlier decision of this court in Ramnivas Hanumanbux Somani v. S. Venkataraman. The contention, therefore, of Mr. Palkhivala that the manager, Parasare, on whom the notice was served, had no authority in writing to receive the same and, therefore, the service of the notice was invalid, cannot be accepted. Moreover, it must be noted that the notice under section 23(4), which was issued on 4th January, 1957, was admittedly received by the assessee. It was after receipt of this notice that he had represented to the Income-tax Officer that the date mentioned in that notice was not convenient to him and that another date should be given. The letter dated 24th January, 1957, which was in reply to this request of the assessee was not a notice or requisition under section 63 and no grievance can be made on the ground that this letter was not served on a person who had no authority in writing to receive the notice under section 23(2) issued on 4th January, 1957, but as we have already pointed out, the receipt of that notice was admitted by the assessee. Even assuming, therefore, that there was some procedural be deemed to have waived that irregularity by admitting that he had received the same and having thereafter proceeded to obtain a further adjournment. For these reasons, in our opinion, the contention raised by Mr. Palkhivala that there was not a proper and valid service of notice in the present case, because the manager on whom the notice and the letter were served had no authority in writing to receive the same is unsustainable.
6. The next question is whether the manager had an implied authority to receive notice and communications from the Income-tax Officer. On that question the Tribunal on the facts and circumstances of the case and considering the conduct of the assessee and the manager has recorded a finding that the manager had such implied authority. This is a finding of fact and there is no reason whatsoever to interfere with the same even on merits, assuming we could have done so.
7. In the circumstances, the first question, which has been referred to us by the Tribunal must be answered in the affirmative.
8. If the service of the notice and the letter was good and valid, the only ground which has been put forth on behalf of the assessee for his failure to remain present on 30th January, 1957, is that the manager, Parasare, being ill had not informed him of the said date. With regard to that the finding is that the manager, Parasare, was not ill but had attended the work on 29th January, when he had received the communication from the Income-tax Officer. The finding of the Tribunal, therefore, that there was no sufficient cause for failure to comply with the notice is perfectly justified.
9. The answer to the second question, therefore, which has been referred to us on this reference, must also be in the affirmative.
10. The assessee to pay the costs of the Commissioner.