ANSARI C.J. - This reference has been made on the application of the Commissioner of Income-tax under section 66(1) of the Income-tax Act, herein referred to as the Act. The assessee has been doing business in Malabar produce, cloth, etc., in Kozhikode and had for the assessment year 1945-46 submitted a return, showing Rs. 7,960 as losses. The assessment on him for the aforesaid year was, however, concluded on a total income of Rs. 8,009. Seven years later the Income-tax Officer obtained information regarding large deposits having been made in the assessees name in the Abdul Rehman Branch of the Central Bank of India Ltd., in Bombay, and thereupon issued on March 18, 1954, the notice under section 34 of the Act. It was served on the assessees son on March 22, 1954, and the Income-tax Officer, treating the service insufficient, issued another notice, which was affixed in the business premises of the assessee, because he was said to be then in Bombay or Ceylon. Subsequently, the assessee filed a return and the reassessment was concluded under sections 23(3) and 34 of the Act, Rs. 61,036 being then levied as the tax. One of the objections in the appeal before the Appellate Assistant Commissioner was that the entire reassessment proceedings had been illegal and void, inasmuch as notice under section 34(1)(a) of the Act had not been properly served. That objection was not sustained and on further appeal the Income-tax Appellate Tribunal has upheld it. Therefore, the appeal was allowed, but without decisions on other issues raised in the appeal. The relevant extracts from the Tribunals order are as follows :
'It was stated before us by the learned counsel for the assessee that he gave the Bombay address of the assessee on March 8, 1954, and we have no reason to doubt this statement and, therefore, it passed our comprehension why the Income-tax Officer did not move in the matter quickly except that he believed in the affixture as a good aid in the last resort. With this knowledge of the whereabouts of the assessee it is futile to borrow the words of their Lordships in Myitkyina Trading Depot v. Deputy Tahsildar, Paramakudi, to look for the assessee at Calicut or to claim that he could not to be found at Calicut. Recourse to substituted service is not to be resorted to as a matter of routine. It should be shown that the party was avoiding such service. There is no evidence to show that this was so. Moreover, the notice by affixture is vitiated in that the identity of the witnesses could not be established in the absence of the addresses. The assessees counsel requested an opportunity to examine the witnesses, but no such opportunity was given to him.
We are, therefore, of the opinion that there was no proper service of the notice on the assessee...'
Thereafter, the Commissioner of Income-tax applied and the following question has been referred :
'Whether on the facts and in the circumstances of the case, the reassessment for the year 1945-46 made on March 9, 1955, was valid ?'
On January 2, 1961, a Division Bench of this court, of which one of us was a party, had found additional facts to be necessary for answering the question. It had been then held that the jurisdiction of the Income-tax Officer under section 34 of the Act did not depend upon the issue of the notice, but that the notice was a condition precedent to the assumption of jurisdiction vested in the Income-tax Officer. Consistently it was found that, should the assessee waive the absence of notice, the Income-tax Officer would not be considered to have made an invalid assessment, and a further statement as to whether there had been such waiver by the assessee to cure the infirmity in the notice was necessary. Therefore, the Tribunal was asked to and has submitted a further statement. Therein the assessees several requests subsequent to the affixation of the notice at his business premises on March 24, 1954, are given in some detail and finally the Tribunal finds that, from the facts so set out, there is no conscious waiver.
The learned Government Pleader for the Income-tax Commissioner has urged that the earlier service of notice on the son was sufficient service, with the result of the subsequent improper service on the assessees premises becoming immaterial for deciding whether the assessment was after proper notice to the assessee. In support of this argument he relied on Haji Wali Mohammed Haji Moosa Saya v. Commissioner of Income-tax, where a Division Bench, of which one of us was a party, had held that an erroneous conclusion by the Income-tax Officer, about the service of the earlier notice not being sufficient, would not invalidate the assessment that followed a second notice, which had not been properly served. In other words, it was held that even though the taxing authority making the assessment had erroneously found the earlier notice to be improperly served, the condition precedent to the notice being properly served would be complied with, should a notice, though not immediate, be properly served. It is, therefore, clear that the case would be of no assistance unless the earlier notice on the assessees son in this reference be found to be sufficient; but that cannot be said, because of the earlier information of the assessee being absent in Bombay and the service on the son in these circumstances becoming an idle formality. The Tribunal, therefore, has rightly relied on Myitkyina Trading Depot v. Deputy Tahsildar, Paramakudi, which has also been relied on in the argument of the assessees learned advocate before us. The legislature, by directing in section 34 service of notice on the assessee, has intended such notice not to be a bare procedural requirement, and it would not be satisfied where the assessees earlier departure to a known place would preclude his obtaining immediate information of such notice having been issued. Indeed the Income-tax Officer with the information thought that the service on the son would in the circumstances not be sufficient and that conclusion is not incorrect. It follows that the earlier notice had not been properly served and it would, therefore, not justify the exercise of jurisdiction under section 34 of the Act.
So far as the subsequent affixation of notice on the premises is concerned it should be recalled that under section 63 of the Act a notice under the Act may be served as if it were a summons issued under the Civil Procedure Code and the aforesaid Code provides for affixation without courts order only when the person could not be found after all due and reasonable diligence. As the condition precedent has been not proved the affixation on the house would not under the Code be sufficient. It would at this stage be of advantage to refer to what has been said in Narayana Chetty v. Income-tax Officer in order to emphasis the importance of notice for proceeding under section 34 of the Act. Here the legal position has been stated in these words :
'The argument is that the service of the requisite notice on the assessee is a condition precedent to the validity of any reassessment made under section 34; and if a valid notice is not issued as required, proceedings taken by the Income-tax Officer in pursuance of an invalid notice and consequent orders of reassessment passed by him would be void an inoperative. In our opinion, this contention is well founded. The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void.'
We would not circumscribe the words 'invalid notice' by holding what is invalid, because of being not properly served, would still sustain proceedings under assessee 34; for, a notice, in our opinion, is invalid either because of its being incorrectly issued or through being improperly served. We would, therefore, not accept as correct the argument pressed before us by the learned Government Pleader that procedural defects would not invalidate a notice. In this case, it is clear that the second notice has not been properly served, because the affixation has not been shown in the case to be legally correct. It follows that proceedings started on such invalid notice would not be upheld.
For the purposes of our answer we need not decide whether the assessment is vitiated by total lack of jurisdiction or its exercise is bad due to the failure to observe the condition precedent, because, on the assumption of issuing a notice to be only the condition precedent, no waiver of the failure to observe it has taken place here. We have already referred to the conclusion of the Tribunal about such waiver not having been established in the case. The learned Government Pleader has urged that waiver is a question of law and, therefore, it is open to him to argue that several steps taken by the assessee legally amount to such waiver. The rule of what amounts to waiver is well settled and we need refer only to the observation in Basheshar Nath v. Commissioner of Income-tax, which has been already quoted in our earlier order, that had called for further statement of facts. It was said in that case that there must be a conscious an intentional relinquishment of an existing right and, therefore, such relinquishing of the right must be established. The several acts of the assessee narrated in the fresh statement of facts do not lead to the only conclusion of the assessee having relinquished his objections to the invalid notice. He was undoubtedly anxious to send a return and was asking for time; but that may be to avoid penal consequences. Therefore, waiver of the right, raising from the failure of compliance with the direction of serving notice on the assessee, is not established. It follows that the answer to the question in this reference is that reassessment for 1945-46 made on March 9 is invalid and that be sent. The assessee will get costs, counsels fee being fixed at Rs. 100.