A. N. GROVER J. - The following question of law has been referred to us by the Income-tax Appellate Tribunal under section 66(1) of the Indian Income-tax Act :
'Whether on the facts and the circumstances of the case the notice under section 34 of the Income-tax Act was properly served on the assessee within the prescribed period ?'
The assessee is a Hindu undivided family and the dispute relates to the year of assessment 1945-46, the accounting period being the year ending Chet Badi 15th, Smt. year 2001. On 29th March, 1954, a notice was issued under section 34 of the Indian Income-tax Act, 1922, by the Income-tax Officer, B-Ward, Amritsar. The process server went to the assessees shop for service on 30th March, 1954, but he could not effect service because the karta of the assessee family was not present. The proses server reported to the Income-tax Officer on the same day that the assessee had refused to accept service. Thereupon the Income-tax Officer on 30th March, 1954, sent a notice by registered post and also ordered substituted service by directing the process server to affix the same at the address of the assessee. There, service was effected by the process server on 31st March, 1954. the registered notice is stated to have been received by the assessee on 5th April, 1954. The assessee objected to the validity and legality of the service but the Income-tax Officer held that the service of the notice by affixture was legal. On appeal, the Appellate Assistant Commissioner held that the service was defective as the copy of the notice had not been pasted on the outer wall of the office room or some other conspicuous place in the court building. The Income-tax Appellate Tribunal, however, held that the notice had been properly served under Order V, rule 20, of the Code of Civil Procedure and as the Income-tax Officer was not a court it was not necessary to affix a copy of the notice on the notice board of the Income-tax Officer.
Now the question which has been referred to us in covered directly by a Bench decision of this court to which my Lord the Chief Justice was a party (Jabar Mal Chokhani v. Commissioner of Income-tax). According to that decision when substituted service by affixture is resorted to for the service of a notice (in that case it was a demand under section 29 of the Indian Income-tax Act, 1922) it is necessary to comply with all the requirements of the provisions of Order V, rule 20, of Code of Civil Procedure which are mandatory. Where what is proved is only that a notice of demand is served by affixture on the assessees residence and it is not shown that the requirement in the Code as to the affixture of a copy thereof in some conspicuous place in the court-house has been correspondingly fulfilled, the service of the service of the notice would not be valid.
In view of the above decision there could be no further room for argument but Mr. D. N. Awasthy who appears for the Commissioner of Income-tax contends that in a very recent decision of the Supreme Court it has been laid down that a notice under section 34 on the facts and circumstances which were very similar to those of the present case could be served even after the expiry of the period of 8 years. According to that decision the clear intention of the legislature in enacting section 4 of the Indian Income-tax (Amendment) Act, 1959, is to save the validity of a notice issued under section 34(1)(a) as well as the assessment from an attack on the ground that the notice was given beyond the prescribed period. It was held that where with respect to the assessment year 1947-48 notices under section 34(1) of the Act dated March 19, 1956, were served on the assessee after 8 years on April 2, 1956, the aforesaid section saved the validity of the notices. In S. C. Prashar v. Vasantsen Dwarkadas also it was held on a construction of section 4 of the Amending Act that it operated and validated the notices issued under section 34(1) (a) of the Act as amended in 1948, even earlier than April 1, 1956. It has, therefore, been decided by the Supreme Court that the notices issued under section 34(1) (a) of the Act before or after April 1, 1956, could not be challenged on the ground that they were issued beyond the time limit of 8 years from the respective assessment years prescribed by the 1948 Amendment Act. Section 4 of the Amending Act of 1959 has been held to have been enacted for the sole purpose of saving the validity of such notices in respect of all escaped income relating to any year commencing from the year ending on March 31, 1941, though they were issued beyond the prescribed time.
It seems that the point which has been raised by Mr. Awasthy has a good deal of substance in it, but there big hurdle in his way for asking us to allow him to raise this matter at this stage. Before the Tribunal and at all previous stages before the income-tax authorities the only question that was agitated was whether the notice which had been served by affixation without any copy having been pasted outside the office of the Income-tax Officer etc. could be regarded to be a valid notice within the prescribed period. It being admitted that the notice which was sent by registered post was served after the period of 8 years had expired, it was taken for granted that if the notice was served beyond the period of 8 years or if it had not been served in accordance with law within that period, the proceedings under section 34 could not be regarded to have been validly served within 8 years as was the case of the departmental authorities would be quite different from saying that there was no question whatsoever of the notice being served within the prescribed period as it was not necessary under the law to issue the notice or effect service thereof within a period of 8 years as is being contended now owing to the decision given by the Supreme Court. Mr. Awasthy has sought to rely on Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd. in which the following observations of Chagla C.J. in Madan Lal Dharnidharka v. Commissioner of Income-tax were set out and according to Mr. Awasthy were approved :
'In my opinion it is necessary clearly to re-state the jurisdiction of this court. This is not a court of appeal. This court merely exercises an advisory jurisdiction. Its judgments are in the nature of advice given on the questions submitted to it by the Tribunal. Its advice must be confined to questions referred by the Tribunal to this court and those questions must be questions of law which must arise out of the order made by the Tribunal. Now, looking at the plain language of the section apart from any authority, I should have stated that a question of law arose out of the order of the Tribunal if such a question was apparent on the order itself or it could be raised on the facts found by the Tribunal and which were stated in the order. I see no reason to confine the jurisdiction of this court to such questions of law as have been argued before the Tribunal or are dealt with by the Tribunal. The section does not say so and there is no reason why we should construe the expression arising out of such order in a manner unwarranted by the ordinary grammatical construction of that expression. This court has no jurisdiction to decide questions which have not been referred by the Tribunal. If the Tribunal does not refer a question of law under section 66(1) which arises out of the order then the only jurisdiction of the court is to require the Tribunal to refer the same under section 66(2). It is true that the court has jurisdiction to resettle questions of law so as to bring the real issue between the parties but it is not open to the court to raise new questions which have not been referred to it by the Tribunal.'
But the law was summed up by their Lordships after discussion of all relevant cases as follows at page 611 :
'(1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order.
(2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order.
(3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order.
(4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it.
Stating the position compendiously, it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order.'
As regards the observations of Chagla C.J. what is stated at page 613 is material :
'Indeed the very order of reference shows that the Tribunal was conscious that this point also might bear on the controversy so that it cannot be said to be foreign to the scope of the question as framed. In the result, we are of opinion that the question of the applicability of the proviso is really implicit, as was held by Chagla C.J. in the question which was referred, and, therefore, it was one which the court had to answer.'
In the present case, it is obvious that the question of law which is now sought to be raised by Mr. Awasthy was neither raised before the Tribunal nor considered by it, and, therefore, according to paragraph 4 of the summary given above, it will not be a question arising out of the order of the Tribunal notwithstanding that it may arise on the finding given by it. The observations of Chagla C.J. have to be kept in mind in the light of what their Lordships finally laid down and they were applied to the case because it was considered that the Tribunal was conscious that the new contention which had been raised also might bear on the controversy so that it could not be said to be foreign to the scope of the question as framed. Mr. Awasthy does not say that the question of law which he has endeavoured to raise before us was raised before the Tribunal but it failed to deal with it, nor can it be said that the Tribunal dealt with it although it was not raised before it. Thus, there is no escape from the conclusion that the aforesaid question was neither raised before the Tribunal nor considered by it, and, therefore, it is not possible for us to allow Mr. Awasthy to raise it for the first time before us in this reference.
In the result, the question must be answered in the negative for the reasons given in the previous Bench decision (Jhabar Mal Chokhani v. Commissioner of Income-tax).
D. FALSHAW C.J. - I agree.
Question answered in the negative.