1. This is an assessee's appeal arising out of the assessment for the assessment year 1978-79, the accounting year for which ended on 31-3-1978. Though in the memorandum of appeal grounds were taken challenging the ad hoc addition out of vehicle expenses and charging of interest under Sections 215 and 217(1A) of the Income-tax Act, 1961 ('the Act'), they were not pressed before us at the time of the hearing. The only ground remaining for our decision was that the assessment was barred by limitation.
2. The return of income was filed by the assessee on 31-7-1978 declaring a total income of Rs. 3,23,904. The ITO wanted to make an addition exceeding Rs. 1,00,000 and, therefore, on 30-3-1981, he forwarded a draft of the assessment order to the assessee by registered post, which was served on the assessee on 1-4-1981. The assessee raised certain objections and after referring the matter to the IAC in terms of Section 144B of the Act, the assessment was finally completed on 25-8-1981 on a total income of Rs. 4,60,490. In the ordinary course, the assessment should have been completed by 31-3-1981, but since procedure of reference to the IAC under Section 144B was involved, a period up to 180 days more was available to the ITO in terms of Clause (iv) of Explanation 1 to Section 153 of the Act. The contention of the learned Counsel for the assessee before the authorities below as well as before us was that since the draft order was served on the assessee after the period of limitation prescribed under Section 153 had already expired on 31-3-1981, the exclusion of the period in terms of Clause (iv) of Explanation 1 to Section 153 was not permissible and, thus, the assessment made on 25-8-1981 was barred by time. The ITO as well as the AAC have rejected this contention.
3. We have heard the learned Counsel for the assessee, Shri Ramji Dubey, and the learned departmental representative.
4. Section 144B requires that where in an assessment to be made under Sub-section (3) of Section 143 of the Act, the ITO proposes to make any variation in the income or loss returned, which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under Sub-section (6), the ITO shall, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the 'draft order') to the assessee. Sub-section (2) permits the assessee to send his objections to the draft order to the ITO within 7 days or within 15 days if the time is extended by the ITO. If the assessee makes no objection or intimates his acceptance of the variation, the ITO can complete the assessment accordingly. In case of objections, however, the ITO has to forward the draft order, along with the objections, to the IAC and after receipt of his directions the assessment has to be completed. Section 153 prescribes the time limit within which an assessment has to be completed. Under Section 153(1)(a)(iii), an assessment in the present case was to be completed within two years from the end of the assessment, year. Thus, the last day for the completion of the assessment, as conceded on both sides, was 31-3-1981. Explanation 1 to Section 153 provides for the exclusion of various periods in calculating the period of limitation. Clause (iv) of this Explanation provides that the period (not exceeding 180 days) commencing from the date on which the ITO forwards the draft order under Sub-section (1) of Section 144B to the assesses and ending with the date on which the ITO receives the directions from the IAC under Sub-section (4) of that section or, in a case where no objections to the draft order are received, from the assessee, a period of 30 days shall be excluded. Thus, if the period of limitation prescribed under Section 153(1)(a)(iii) had already expired before the ITO forwarded the draft assessment order to the assessee in terms of Section 144B, no question of exclusion of the period spent in proceedings under Section 144B would arise. The learned Counsel for the assessee contended that the word 'forward' used in Section 144B should be read to mean 'served' and since the draft order was delivered to the assessee admittedly on 1-4-1981 after the period prescribed in Section 153(1)(a)(iii) had already expired, the period cannot be excluded in terms of Clause (iv) of Explanation 1 to Section 153. The argument of the learned Counsel was that the assessee has been given a right to raise objections to the draft order and, therefore, mere forwarding of the draft order would not be enough and it should actually be served on the assessee. It was also contended that when the letter containing the draft assessment order was delivered to the postal authorities for transmission to the assessee, the postal department was the agent of the ITO and in law the article continued to be in possession of the ITO through his agent and under the postal rules, the ITO had a right to get back the postal article before it was delivered to the assessee, and therefore, since the article was in the possession of the ITO till the time it was delivered to the assessee on 1-4-1981, it cannot be said that it had been forwarded to the assessee. It was also argued that the word 'issue' in relation to issue of notices has, at times, been interpreted to mean 'served' and in the same manner, the word 'forward' in Sub-section (1) of Section 144B should also be read to mean 'served' or 'delivered'.
5. It is no doubt true that when an article is delivered to the postal authorities for transmission and delivery to another person, the postal authorities act as the agents of the sender and the article is deemed to be in the constructive possession of the sender. This, however, is not important for our purposes because we have merely to find whether the word 'forward' used in Section 144B means 'delivered'. The word 'forward' according to Webster's New Collegiate Dictionary, Indian edition, means to help onward : to send forward : transmit : mail to the new address. Thus, according to the plain dictionary meaning, the word 'forward' means to put in course of transmission to the person to whom the article is intended to be ultimately delivered. In forwarding an article an intermediary agency would be necessary. The agency employed may act as an agent of the sender or of the service, depending upon the facts of each case. It is true that the postal department was an agent of the ITO but that does not make the act of forwarding ineffective particularly because the use of the postal authority is one of the most common, independent and reliable methods of forwarding a letter or an article that can be sent by post. Sending letters by post is the commonest practice adopted by people and, therefore, when the draft assessment order is sent by registered post to the assessee, the forwarding is complete. In this case, admittedly, the draft assessment order, was put in the course of transmission on or before 31-3-1981, i e., within the period of limitation.
6. It is no doubt true that the word 'issue' has been interpreted as 'served' in some cases. The rule of interpretation, as laid down by the Hon'ble Supreme Court in R.L. Arora v. State of U.P. AIR 1964 SC 1230 and relied upon by the learned Counsel for the assessee, is that in a statute the Court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used in a provision to the statute. In Banarsi Debt v. ITO  53 ITR 100 (SC) the provisions of Section 4 of the Indian Income-tax (Amendment) Act, 1959, came for interpretation before the Hon'ble Supreme Court and it was held that the word 'issued' used in Section 4 meant 'served' as well and that the expressions 'issued' and 'served' are used as interchangeable terms in the legislative practice of our country and they are sometimes used to convey the same idea. The Hon'ble Supreme Court approved the principle of interpretation that in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. The Hon'ble Supreme Court also approved the observations of Lord Russel of Killowen, CJ in Attorney-General v. Carltan Bank  2 QB 158 that the duty of the Court is to give effect to the intention of the Legislature as that intention is to be gathered from the language employed having regard to the context in connection with which it is employed. Similarly, in Sri Niwas v. ITO  30 ITR 381 (All.), the words 'serve notice on the assessee' used in Section 34 of the Indian Income-tax Act, 1922 ('the 1922 Act') were interpreted to mean due service of the notice and not merely the issue of a notice.
Further, the word 'issue' in Sub-section (3) of Section 34 was held to mean 'serve'. Both these decisions are in respect of Section 34 where, in one clause the word 'serve' was used and in another clause the word 'issue' was used and it was held that both the words meant the same thing.
7. In the case before us, the Legislature in its wisdom has used a different word 'forward'. The word 'serve' has also been used at various places in the Act and, therefore, it is apparent that the distinction between the words 'forward' and 'serve' was in contemplation of the Legislature. In Sub-section (2) of Section 139 of the Act, when the ITO wants an assessee to file its return of income, the ITO has to 'issue a notice to him and serve the same upon him'. The words used in this section clearly indicate that the Legislature was even alive to the misunderstanding that the word 'issue' may cause and, therefore, it has specifically added the word 'serve'. Section 148 of the 1961 Act, which is equivalent to Section 34 of the 1922 Act, also requires the ITO to serve on the assessee a notice. Here also, the Legislature has specifically provided for service of the notice. In contradistinction to this, in Section 144B the word used is merely 'forward'. Then, in Explanation 1 to Section 153 also the word 'forward' has been used in prescribing the period that would be excluded. The period for exclusion begins from the date on which the ITO forwards the draft to the assessee and ends with the date on which the ITO receives the directions from the IAC. It was contended that the right given to the assessee under Sub-section (2) to make an objection against the draft would be defeated if mere forwarding of the draft was enough and, therefore, reading the provisions of Sub-sections (1) and (2) of Section 144B together, the word 'forward' has to be read as 'served'. It may be that mere forwarding of the draft assessment order without actual service may make an assessment irregular. But here we are concerned with the provisions of Clause (iv) of Explanation 1 to Section 153. This clause restricts the total period for exclusion to 180 days and the period begins from the date on which the ITO forwards the draft and ends with the date on which the directions of the IAC are received by the ITO. It was not even contended before us that the word 'forwards' used in Clause (iv) of Explanation 1 should also be read as 'served'. That would make the provision unworkable in many cases because the period of 180 days or a major part of it may be spent in the service of the notice itself. The Legislature did not want to unduly extend the period for completion of the assessment and that is why the period has been restricted to a maximum of 180 days and the period starts from the date when the ITO forwards the draft to the assessee and it comes to an end on the date the ITO receives the directions from the IAC. Neither the ITO has any option to extend the time for objections beyond a period of 15 days nor the IAC has the opportunity or discretion of keeping the matter pending with him as long as he likes. Therefore, Clause (iv) of Explanation 1 specifically deals with the period which has to be excluded in computing the period of limitation and the word 'forward' used in this clause has its natural meaning, i.e., put in the course of transmission and cannot be read to mean 'served', as contended on behalf of the assessee. If the word 'forwards' was intended by the Legislature to have the same meaning as 'served', then the Legislature would not have restricted the period of exclusion to a maximum of 180 days because the Legislature would have contemplated that service of the draft order on the assessee may take a long time and either the whole of the period of 180 days may be spent in the service of the draft order itself or the service may be made at a time that no time was left for making of a reference to the IAC and for the IAC to give his proper attention to the matter. We, therefore, hold that in terms of Clause (iv) of Explanation 1, the whole time commencing from the date on which the draft order is put in the course of transmission to the assessee and ending on the date on which the directions of the IAC are received by the ITO has to be excluded. Since in the case before us, admittedly, the draft assessment order was put in the course of transmission to the assessee before 31-3-1981, i.e., within the period of limitation, it cannot be said that the assessment had become time barred because the draft assessment order was served on the assessee on 1-4-1981. It was not contended before us or before the authorities below that even if the period prescribed under Clause (iv) of Explanation 1 of Section 153 is excluded, the assessment made on 25-8-1981 was barred by time.
8. In view of the above discussion, this appeal has no force and is liable to be dismissed.