This income-tax reference has been placed before us in pursuance of the order dated April 29, 1965, passed by a Division Bench of which I was a member. The question which we are called upon to answer was formulated by the Income-tax Tribunal (Delhi Bench), in the following terms :
'Whether on the facts and in the circumstances of the case the service of the notice under section 34 on the assessee was invalid at law as copy of the notice was not affixed at any conspicuous place in the courthouse or at any conspicuous place in the Income-tax Officer.'
The facts have been stated in the referring order, but I may briefly recapitulate them for our present purpose. The assessee, Seth Bal Kishan Dass was assessed originally in February, 1948. Later, the Income-tax Officer had reason to believe at that certain immovable property and shares in the companies acquired by the assessee during the accounting period had escaped assessment because the same had not been disclosed in the original return. A notice for personal service under section 34(1)(a) of the Indian Income-tax Act (No. XI of 1922) was accordingly issued to the assessee on March 28, 1956. On the same day, a notice was also issued by registered post which was received by the assessee on April 2, 1956. The process-sever who had taken the notice for personal service reported to the Income-tax Officer on March 28, 1956, that he had tendered the notice to the assessee personally on the same day, but the assessee had declined to receive the same. The Income-tax officer, thereupon, directed service of notice by affixation. The notice was accordingly affixed on the outer door of the residence of the assessee on March 31, 1956. No copy of the notice was, however, affixed on any conspicuous place in the Income-tax office or in the court-house. There is no controversy about these facts which are undisputed.
The submission strongly pressed before us by Shri Chetan Dass, learned advocate for the assessee, is that the service which the department has relied upon is the service effected by means of affixation on the outer door of the residence of the assessee under the provision of Order V, rule 20, Code of Civil Procedure, and this service is, in the absence of affixation a copy of the notice on some conspicuous place in the court-house or on some conspicuous place in the income-tax office, invalid. The learned counsel has based this contention on the plain language of section 63, Indian Income-tax Act, 1922, and of rule 20 of Order V, Code of Civil Procedure. According to him, court-house, as used in rule 20, should, for the purpose of the present case, be deemed to mean income-tax office because the word 'court' has a varied import. The counsel has referred us to the Oxford English Dictionary, according to which the word 'court' means the place, hall or chamber in which justice is administered. The place where the Income-tax Officer holds assessment proceedings may well according to the learned counsel, mean court-house. Stress has in this connection been laid on the argument that the department did not care to rely on the refusal by the assessee to accept the service of the notice when personally tender to him by the process-server; nor did the department rely on the notice dispatched by registered post, which though issued on March, 28, 1956, was received by the assessee on April 2, 1956. Support for the challenge to the validity of the notice has been sought by Dewan Chetan Dass from two Bench decision of this courts. The first case is reported as Jhabar Mal Chokhani v. Commissioner of Income-tax. This is followed in the second decision which is reported as Deulat Ram Khanna v. Commissioner of Incomes-tax. The contrary view adopted by a Bench of Saurashtra High Court in Menon Aba Isa Haji Adhreman Dharar v. Menon Mohad Haji Sulaiman Chamadia according to the counsel, is unsound. On behalf of the assessee, it is also submitted that the jurisdiction which this court exercises in reference proceedings is advisory sand the only function this court has to perform is to answer the precise question refereed and to consider or answer any other question of law. Reliance for this submission is placed on Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd.
The respondents learned counsel has, on the other hand, questioned the correctness of the view taken in the two bench decision of this court mentioned above. He has for his submission placed reliance on the decision of the Saurashtra High Court in Menon Abas case. The argument briefly put is that procedural formalities requiring service of notice are not to be rigidly adhered to and they are mandatory only to the extent to which they may by considered necessary for effectuating the real purpose of informing the persona to be served of the contents of the tax office could not have been more effective than affixation on the outer door of the residence of the assessee; and when the assessee had also declined to receive a copy of the notice, service of the notice should not be held to be invalid merely because of omission to affix a copy in the court-house or in the income-tax office. According to the counsel, Order V, rule 20, has to be construed in a practical way and being a rule of procedure, it should be so construed as to subserve the real purpose and should not be allowed to obstruct or defeat the cause of justice. The counsel has also controverted the submission urged on behalf of the assessee that the income-tax office should in the present context be considered to be a court-house within the contemplation of Order V, rule 20, Civil Procedure Code. In the alternative, it is submitted that the service of notice on the facts and circumstances of the present case is, in any event, valid independently of the provision of Orders V, rule 20, Code Procedure. It has been emphasised that the question framed for answer by this court is very comprehensive and the real controversy to be considered in answering the question is whether the service of notice on the facts and circumstances of this case is valid, notwithstanding the fact that no copy of the notice was affixed on some conspicuous place in the court-house or in the income-tax office. The question referred, according to the counsel, is not confined within the narrow limits of the scope and effect only of Order V, rule 20, Code of Civil Procedure, for the purpose of determining the validity of the notice. For this submission, support is sought from a decision of the Supreme Court in Bansari Debi v. Income-tax Officer and also from the decision of the Supreme Court in the case of ScIndia Steam Navigation Co. Ltd. mentioned above. The learned counsel has fortified his arguments from another decision of the Supreme Court in Commissioner of Income-tax v. Ogale Glass Works Ltd. nd from a decision of the Bombay High Court in Commissioner of Income-tax v. Breach Candy Swimming Bath Trust. Passing reference has also been made to page 919 of the Law and Practice of Income-tax by Kanga (5th edition), where it is stated that it is on to the court without raising new and difference question to resettle or reaffirm the question formulated by the Tribunal before answering them so as to bring out the real issue between the parties.
It is argued by Shri Awasthy that according to the decision of the Supreme Court in S.C. Prashar v. Vasantsen Dwarkadas, it is the date on which the notice is issued which is important for the purpose of determining the validity of reassessment from the point of the period of limitation postulated by section 34(1). If, therefore, the notice in the instant case was issued by registered post on March 28, 1956, then merely because it was actually received by the assessee on April 2, 1256, would not invalidate the notice on the ground of its having been served after the expiry of eight years. It may at this state be pointed out that the objection to the validity of the notice on the ground of its having been served dafter the expiry of eight years. It may at this state be pointed out that the objection to the validity of the notice in question at the instance of the assessee is apparently designed to found the plea of time-bar against reassessment on the ground that eight years prescribed for reopening the assessment of 1948 expired on March 31, 1956. It is in this context that Shri Awasthy has invited our attention to the Supreme Court decision in the case of S.C. Prashar which clinches the matter in his favour.
In our opinion, it is unnecessary to express any opinion on the challenge to the correctness of the two Bench decision of this court dealing with the question whether affixation of a copy of notice on the court-house or the income-tax office is mandatory when service in assessment proceedings is sought to be effected under Order V, rule 20, Code of Civil Procedure. Section 63 of the Indian Income-tax Act of 1922, so far as relevant for our purpose, lays down that a notice or requisition under the 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. Merely because the authorities concerned took the doubt precaution of issuing notice both by post and through the process-server would not, in my opinion, invalidate the service of the notice effected by post. If, therefore, the notice was actually issued within eight years, as it was in the present case, the service a of the notice would be perfectly valid, and we so hold. Incidentally, I may point out that even under the Code of Civil Procedure, service can in the very first instance be effected by registered post is clear from the proviso added by this court to rule 10 of Order V, Code Procedure, service can in the very first instance be effected by registered post as is clear from the proviso added by this court to rule 10 of Order V, Code of Civil Procedure.
The objection that the question referred does not justify this court in taking the view we propose to take appears to me to be untenable. The question referred merely relates to the validity of the service of notice under section 34 and is not confined to the consideration of Order V, rule 20, Code of Civil Procedure, alone. In the statement of the case forwarded to this court by the Appellate Tribunal, the fact of a notice having been sent to the assessee by registered post on March 28, 1956, and received by the assessee on April 2, 1956, is clearly stated. Indeed, this fact also appears from the order of the Appellate Tribunal dated March 20, 1962, passed on appeal by the revenue. It is true that the Tribunal only proceeded to consider the provision of Order V, rule 20, but merely for this reason it cannot be said that the validity of the notice served by registered post does not arise as a question of law from the order of the Tribunal and the facts admitted or proved. The question related to the validity of the notice under section 34 of the Indian Income-tax Act, 1922, and each aspect of the question of validity of notice cannot be a distinct questioned of law for the purpose of section 66(1) of the Income-tax Act so as to require it to be separately formulated and stated for answer by this court. The contention that the question formulated has implicit in its language read in the context, rule 20, Code of Civil Procedure, is unacceptable because except for the bald assertion at the bar, we find no cogent reason for thus restricting the scope of the question framed and for declining to answer it on all the facts established on the record. The notice was, in our opinion, validly served on the assessee and is not trained by any invalidity. The answer to the question referred must, therefore, be in the negative and we so answer the reference. The revenue is entitled to its cost which we fix at Rs. 250.
Question answered in the negative.