G.P. Singh, C.J.
1. This reference is made by the Income-tax Appellate Tribunal as directed by the High Court in M.C.C. No. 443 of 1974, decided on 16th November, 1979, referring for our answer the following questions of law :
'(1) Whether, on the facts and in the circumstances of the case, the service of notice under Section 148 on the assessee was valid ?
(2) If question No. 1 is answered in the negative, whether the assessment made under Section 147 was valid ?'
2. The facts in so far as relevant and briefly stated are that the reference relates to the year 1967-68. The assessee who is a doctor did not file the return of income under Section 139(1) and the ITO issued a notice under Section 148 on 24th May, 1969. This notice was served on a person on 13th June, 1969. Initials on the office-copy of the notice in token receipt of the notice are not legible. Thereafter, a notice under Section 142(1) was issued. The assessee filed his return on 27th December, 1969. After issuing notice under Section 143(2) and recording the statement of the assessee on oath the ITO computed the income of the assessee at Rs. 44,346 and assessed him to tax accordingly. In the proceedings before the ITO the assessee did not raise any objection that the notice under Section 148 was not served on him. The assessee filed an appeal to the AAC. In the grounds of appeal one of the points taken was that 'there being no proper service of statutory notices, the proceedings are illegal and bad in law. At the stage of argument before the AAC it was stated by the assessee that the signatures on the office-copy for receipt of the notice were not his signatures and the receipt of the notice is by a person not authorised by him.
3. The AAC held that it was difficult to accept this statement of the assessee made at a late stage specially considering the fact that the notice Under Section 142(1) issued on the basis of the notice Under Section 148 was accepted by the assessee all along as correct. In further appeal before the Tribunal the assessee again questioned the validity of the service of the notice. The Tribunal negativing the contentions observed that it was not the contention of the assessee that the notice Under Section 148 issued by the 1TO did not reach him. The Tribunal held that in fact the notice had reached the assessee and he had also complied with it and filed a return in compliance with it on 27th December, 1969. The Tribunal further found that the assessee also complied with the notices Under Section 142(1) and Section 143(2) issued by the ITO and participated in the assessment proceedings throughout without any objection. The Tribunal on these facts concluded that even though the assessee may not have been personally served with the notice and the person who received it might not have also been authorised to receive it on his behalf, yet as the notice in fact reached the assessee and he complied with the same, the service must be held to be valid.
4. It is not in dispute that the service of a notice Under Section 148 is an essential requirement for making the assessment Under Section 147. Section 148 is drafted in mandatory terms leaving no doubt on this question and even if there be any doubt, that is dispelled by the decision of the Supreme Court in CIT v. Thayaballi Mulla Jeevaji Kapasi : 66ITR147(SC) , which is a ruling on the corresponding provisions of the 1922 Act. Service of notice has to be effected as provided in Section 282 as if it were a summons issued by a court under the CPC, 1908. Order 5, Rule 12 of the CPC says that wherever it is practicable service shall be made on the defendant in person, unless he has an agent empowered to accept service, in which case service on such agent shall be sufficient. Order 5, Rule 16 states that where the serving officer delivers or tenders a copy of the summons to the defendant personally, or to an agent or other person on his behalf, he shall require the signature of the person to whom the copy is so delivered or tendered to an acknowledgment of service endorsed on the original summons.
5. The assessee did not raise the question of validity of the service of the notice under Section 148 before the ITO. The assessee filed his returns. He also complied with the notices under Sections 142(1) and 143(2) and participated in the proceedings. It was for the first time in the memo of appeal presented to the AAC that the service of the notice was challenged but there also the challenge was in most ambiguous terms. It was at the stage of hearing before the AAC that the assessee came out with the objection that he was not personally served with the notice and the person receiving the notice was not authorised by him to receive it. The AAC refused to accept the statement of the assessee on the ground that it was made at a very late stage. The Tribunal, in the circumstances, in further appeal, came to the conclusion that the service of notice must be taken to be valid as it had reached the assessee. We agree with the view taken by the Tribunal.
6. The assessee did not dispute before the Tribunal that he in fact received the notice. The assessee participated throughout in the assessment proceedings before the ITO without raising any objection. Even if there was any procedural irregularity in the service of notice in that it was not served by the serving officer on the assessee personally or an agent empowered to receive service that irregularity loses all significance once it is held that the notice was in fact received by the assessee and was acted upon by him before the ITO without raising any objection. Such a procedural irregularity in service of the notice under Section 148 cannot be held to invalidate the assessment. The view taken by us is fully supported by the decision of the Gujarat High Court in CIT v. Bhanji Kanji's Shop : 68ITR416(Guj) . In that case it was observed that (headnote), ' even if there is a procedural irregularity in the service of a notice of reassessment, if the assessee admits that he had received the notice, or from the facts it can be found that he must have received the notice, the contention on behalf of such an assessee that the notice was improperly served must be rejected'. The case of the Gujarat High Court was followed by the Patna High Court in Mahendra Kumar Agrawalla v. ITO : 103ITR688(Patna) . We respectfully agree with the view taken in these cases.
7. The learned counsel for the assessee relied upon Vijay Kumar Jain v. CIT , Fatechand Agarwal v. CWT : 97ITR701(Orissa) and Jayanti Talkies Distributors v. CIT : 120ITR576(Mad) . These cases are distinguishable. In the case of Vijay Kumar Jain, the Punjab & Haryana High Court only held that a Tribunal cannot refuse to consider the validity of the notice under Section 148 even though the ground challenging the same had not been pressed before the AAC. In the case of Fatechand Agarwal : 97ITR701(Orissa) , the Orissa High Court was dealing with the validity of service of assessment order in the context of limitation for filing appeal. In the case of Jayanthi Talkies Distributors : 120ITR576(Mad) , notice for reassessment under Section 148 was served on the manager of the assessee. The manager also wrote for extension of time for filing return. No return was, however, filed by the assessee. The assessment was completed under Section 144 by the ITO. The assessee contended that as there was no service of notice on the person duly authorised to receive the same, the assessment was invalid. This contention succeeded before the Madras High Court.It would be seen from the facts of the Madras case that the assessee didnot act upon the notice nor did he file any return or participate in theassessment proceedings. All these cases relied upon by the learnedcounsel for the assessee are, therefore, not applicable on the facts of theinstant case.
8. For the reasons given above, we answer the questions as follows :
'(1) The service of notice under Section 148 was valid.
(2) The assessment made under Section 147 was valid.'
9. The assessee will pay the costs of this reference. Counsel's fee Rs. 100.