DATTA, J. - The facts of this reference lie in a very narrow compass.
On the 6th day of March, 1951, a notice by registered post was issued by the Income-tax Officer under section 34 of the Income-tax Act, on the ground that certain incomes had escaped assessment. The said notice was served on the lawyer of the assessee. On receipt of the said notice by the lawyer, the assessee filed his return, and thereafter an assessment was made by the Income-tax Officer upon the basis of the said notice under section 34. Thereafter, the assessee being dissatisfied with the order, took the matter to the Appellate Assistant Commissioner, where, for the first time, the assessee took the point that the notice under section 34 was bad in law inasmuch as it did not bear the signature of the Income-tax Officer, for a proper notice under section 34 is a condition precedent in the exercise of jurisdiction by the Income-tax Officer.
It transpired before the Appellate Assistant Commissioner that the Income-tax Officer had taken permission of the Commissioner of Income-tax before issuing notice under section 34 in compliance with the mandatory provisions of one of the sub-sections of the same section. It further transpired that the officer copy of the same notice was not signed by the Income-tax officer. In these circumstances the Appellate Assistant Commissioner negatived the contention of the assessee. This matter, however, did not rest there. The assessee took the matter to the Tribunal. The Tribunal, again, affirmed the order of the Appellate Assistant Commissioner of this point.
Thereafter, an application under section 66(1) was made, and this question was referred to us.
The relevant provisions of the Income-tax Act are as follows :
'34. (1) If -
(a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or
(b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss depreciation allowance has been computed,
he may in cases falling under clause (a) at any time within 8 years and in cases falling under clause (b) at any time within 4 years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section.'
'22. (1) The Income-tax Officer shall, on or before the first day of May in each year, give notice, by publication in the press and by publication in the prescribed manner requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish, within such period not being less than 60 days as may be specified in the notice, a return, in the prescribed form and verified in the prescribed manner, setting forth (along with such other particulars as may be required by the notice) his total income and total world income during that year :
Provided that the Income-tax Officer may in his discretion extend the date for the delivery of the return in the case of any person or class of persons.
(2) In the case of any person whose total income is, in the Income-tax Officers opinion, of such an amount as to render such person liable to income-tax, the Income-tax Officer may serve a notice on him requiring him to furnish, within such period, not being less than 30 days, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) his total income and total world income during the previous year :
Provided that the Income-tax Officer may in his discretion extend the date for the delivery of the return.
63. (1) A notice or requisition under this 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, 1908 (V of 1908).
(2) Any such notice or requisition may, in the case of a firm or a Hindu Sincerely, undivided family, be addressed to any member of the firm or to the manager, or any adult male member of the family and, in the case of any other association of persons, be addressed to the principal officer thereof.'
The relevant provisions of the Civil Procedure Code are as follows :
'Order 5, r. 3. - Every such summons shall be signed by the judge or such officer as he appoints, and shall be sealed with the seal of the court.
Order 5, r. 10 : Mode of service - Service of the summons shall be made by delivering or tendering a copy thereof signed by the judge of such officer as he appoints in this behalf, and sealed with the seal of the court.'
The word 'notice' carries, according to Oxford Concise Dictionary, the meaning 'intimation, intelligence, warning'; the words 'give notice', 'have notice ', mean 'formal intimation of something or instructions to do something'. Hence, according to its ordinary English meaning, a notice need not be in writing. In the case of Maharana Mills (P) Ltd. v. Income-tax Officer, Porbandar, the Supreme Court held, inter alia, that a verbal notice was sufficient to fulfill the requirement of the proviso to section 35(1). In the case of Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Ningashetti His Lordship Dayal J. who delivered the judgment after contrasting the provisions of sub-section (1) and sub-section (2) of section 14 of the Arbitration Act of 1940, observed, inter alia, that : 'The difference in the provisions of the two sub-sections with respect to the giving of notice is significant and indicates clearly that the notice which the court is to give to the parties of the filling of the award need not be a notice in writing. The notice can be given orally.'
It follows from these considerations and decisions that if there is no express provision or provision by necessary implication, that the notice must be in writing and writing only, it is sufficient if a verbal notice is given.
It is for this reason that the legislature, when it thinks in its wisdom that a written notice should be given, makes provision in once or more of the sections of the Act itself. Section 7 of the Public Demands Recovery Act, section 14(1) of the Arbitration Act, section 6 of the Parsee Marriage & Divorce Act, section 4(1) of the Revenue Recovery Act, section 106 of the Transfer of Property Act, section 37(1) of the Gift-tax act, section 41 of the Expenditure-tax Act, section 82 of the Estate Duty Act are illustrations of this class. The legislature may again provide for written notice in the Rules. Rule 20 of the Public Demands Recovery Act is an illustration of this class. The legislature may again do it by prescribing a form.
Hence, it is necessary to consider firstly whether section 34 requires a notice in writing. It was at one stage conceded on behalf of the revenue that a notice under section 34 must be in writing. It is however difficult to say in view of the subsequent arguments whether the revenue had stuck to the same concession. Be that as it may, it is clear that the words 'has reason to believe' in section 34(1) suggest the requirement of a written notice, though, by itself, it is not decisive. The words 'serve on the assessee' in section 34 indicates the necessity of a written notice. The paragraph after clause (b) in section 34 incorporates by reference the requirements of a notice under section 22, clause (2). Section 22 provides, inter alia, 'may serve a notice' and 'not being less than thirty days as may be specified in the notice.' This again lends support to the view that a notice under section 22 must be in writing. Therefore, in my view, section 34(1) makes it incumbent upon the Income-tax Officer to give a notice in writing.
The legislature may again not only require that notice should be in writing but further stipulate that such notices in writing must be under the signature of the person or officer issuing it or sending it out or his agent. This is sometimes provided in one or more sections of the Act itself. Section 106 of the Transfer of Property Act is an illustration of this class. This may again be done under the Rules made under the Act. Rule 2 of the Public Demands Recover Act is an illustration of this class. This may again be done by forms prescribed under an Act or the Rules made thereunder.
It is now necessary to consider whether the legislature or the Rules made under the Act require that the notice under section 34(1) must not only be in writing but also bear the signature of the Income-tax Officer.
Section 34 provides, inter alia, that 'He (the Income-tax Officer)........ serve on the assays a notice.. . . . . . . . .'
The word 'serve' in section 34 at once attract section 63(1) and, consequently, in cases 'where it is served as if it were a summons', the provisions of Order 5, rule 10, of the Civil Procedure Code is attracted.
It is a matter of common knowledge that the judge does not serve the summons or notice. Therefore, he cannot sign on the summons when it delivered or tendered. It is signed by the judge or an officer so authorized, when the summons is prepared in the office under Order 5, rule 6(3), of the Civil Procedure Code. Therefore, in a way it was redundant for the legislature to specifically mention that the summons shall bear the signature of the judge in Order 5, rule 10, when it had already commanded that judge shall put the signature on the summons in Order 5, rule 1, clause (3). In my opinion it has been mentioned both in Order 5, rule 1, and Order 5, rule 10, with the object of emphasising that the signature must not only exist before the sending out of the summons but also at the time when it reaches the hands of the defendant or the respondent, as the case may be, for the signature of the officer together with the seal of the court, or may be without it, is the hallmark of genuineness or proof or guarantee that it was issued by the judge from the court. If it is originally put but is effaced before it is served, it would not be a guarantee of its genuineness.
A notice under section 34 cannot be issued mechanically or as a matter of routine, for its seeks, inter alia, to disturb the assessment already made and finalized. Hence, it imposes upon the Income-tax Officer to apply his mind to the matter before seeking to unsettle the matter to the detriment of the assessee. The Income-tax Officer must satisfy that he has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, that income, profits or gains chargeable to income-tax have escaped assessment for that year or have been under-assessed or assessed at too low a rate or has been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed. These again do not give him jurisdiction to issue a notice. He must satisfy himself that it is within a period of eight years in the first class of case and within a period of four years under the second class of case. It is only when these two conditions are satisfied that the Income-tax Officer is competent to issue a notice under section 34. The signature along with the seal below the notice, or may be without it, would be a guarantee beyond doubt that the Income-tax Officer had exercised his mind over the points mentioned in section 34(1). If the notice does not bear his signature, it may be that it was issued from his office by mistake or it may be that he had not applied his mind to the points involved under section 34. Therefore, in many opinion, on a consideration of the second part of section 63(1), read with Order 5, rule 1 and 10, the signature on a notice is not only necessary but an integral part of the notice.
If the designation 'Income-tax Officer' is without the signature it cannot be said that the notice was by the Income-tax Officer. The designation by itself means nothing. It may refer to any Income-tax Officer. If the district is mentioned it may not be possible to identify the Income-Tax Officer. If the district is mentioned along with the date it may be possible to identify the Income-Tax Officer. Even then there is however the possibility that the Income-Tax Officer may disown the responsibility of having given the notice or issued the notice or served the notice on the assessee. Hence, in may opinion, again, on this reasoning, it is incumbent upon the Income-tax Officer to place his signature on the notice.
Section 34 requires that it must contain all or any of the requirements which may be included in a notice under sub-section (2) of section 22.
Section 22, clause (1), expressly provides for a written notice. The words 'notice by publication in the press and by publication in the prescribed manner' make it abundantly clear.
It does not however expressly or explicitly require the signature of the Income-Tax Officer on the notice. The relative form, made under rule 18 of the Income-tax Rules, specifies the following things after the body of the notice :
Address Date of publication of the notice.
The Income-Tax Officers are appointed under section 5 of the Income-tax Officer Act. Section 2, clause (7), defines 'Income-Tax Officer', which means 'a person appointed to be an Income-Tax Officer under section 5'. The words 'Income-tax Officer' in the form is vague and does not indicate the person. It becomes definite and points out the person when the Income-tax Officer puts his signature. Hence, the words 'Income-tax Officer' in the notice under section 22(1) requires the signature of the Income-tax Officer.
Section 22(2) provides that the Income-tax Officer 'may serve a notice'. The word 'serve' in section 22(2) brings in the necessary element of a signature by the Income-tax Officer on the notice. Hence, the signature becomes a part of the notice.
A notice under section 22(2) which initiates the assessment proceedings requires a signature.
A notice under section 34, inter alia, unsettles the assessment already made, a matter having more far-reaching effect on the assessee than section 22(2). It stands to reason that section 34 should equally require the signature of the Income-tax Officer. In my opinion, there is another approach to the problem which was not referred to at the time of arguments.
Section 34 provides that 'He (meaning the Income-tax Officer)....... serve on the assessee....... a notice'. The words 'Income-tax Officer' means the person appointed to be an Income-tax Officer under section 5. If the words 'Income-tax Officer', referred to the person appointed to be an Income-tax Officer, it must inevitable lead to the conclusion that the notice must bear the signature of that person; otherwise the notice will not be by the person who was appointed as the Income-Tax Officer.
In this connection reference was made to the form of a notice given under section 34 in the Income-tax Manual at page 495. The form ends with the words 'Income-tax Officer' on the right hand side and on the left hand side there is a circle with the words 'seal'. This form appears in the chapter or part which begins with the words 'Notes on the Indian Income-tax Act, 1922, the rules made under that Act and other statutory provisions and orders concerned with the imposition of income-tax, as corrected up to 30th September, 1949'. The form of the notice under section 34 is preceded by the following words : The notice under section 34, i.e., (I.T. 90) is not a prescribed form but may be in the following form. Section 5(8) provides that all officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Central Board of Revenue. Therefore, it is necessary to consider whether this form is in the nature of an order, instruction or direction. In may opinion, though it appears in a part which is headed Notes, it is clear that it is an order or instruction or direction made by the Central Board of Revenue which is expected to be followed by the Income-Tax Officer. The notice in the present case is also on the same terms and in the same form.
The next question for consideration is whether the breach of the order, instruction or direction makes it invalid or it is only a matter between the Central Board of Revenue and the officer concerned so that the Central Board of Revenue may only take such disciplinary action or otherwise as they may think fit against such officer without in any way affecting the assessment or reassessment. In may view having regard to the words of clause (5) of section 5, it is a matter as between the Central Board and the delinquent officer. The Central Board may or may not take steps for the omission of the Income-tax Officer. The assessee cannot take advantage of its breach by the Income-tax Officer.
Therefore, the form in the Income-tax Manual does not make it obligatory upon the Income-tax Officer to place his signature in the notice so that its breach may be taken advantage of by the assessee.
Hence, even though the form in the Income-tax Manual is not helpful to an assessee, the reasons mentioned before make the signature of the Income-tax Officer on the notice under section 34 an essential and/or integral and/or inseparable vital part or requirement of such a notice and, consequently, the notice under section 34 must be signed by the Income-tax Officer and it must bear the signature of the Income-tax Officer when it is served as if it were a summons. In may opinion, if this conclusion is correct, as it is, it necessarily follows that the notice sent by post must likewise be signed and bear the signature of the Income-tax Officer.
It is now necessary to consider the effect of the omission on the part of the Income-tax Officer concerned to put his signature in a notice issued by him under section 34 of the Income-tax Act.
The language of section 34, prima facie, suggests that no Income-tax Officer can proceed to reassess on the grounds mentioned in section 34 with out issuing a notice to the assessee in terms of the provisions of section 34.
In the case of Commissioner of Agricultural Income-tax v. Sultan Ali Gharami, the Calcutta High Court had occasion to consider section 34 of the Bengal Agricultural Income-tax Act, 1944, which substantially corresponds with section 34 of the Indian Income-tax Act. In that case, a notice was given to the assessee under section 22(2) and in compliance with that notice the assessee made a return and the Income-tax Officer assessed the assessee under section 34. In those circumstances, the question arose whether the assessment was a valid assessment under section 34 or not. The Privy Council (sic.) held that the assessment was bad for want of a notice under section 34.
In a Bombay case, Commissioner of Income-tax v. Ramshukh Motilal, the notice under section 34 gave only six days though the section required that 30 days time should be given. None the less the assessee appeared, field his return and was assessed. In these circumstances, a Bench of the High Court presided over by Chagla C.J. held that it was not a mere procedural irregularity but a defect going to the root of the jurisdiction for a valid notice under section 34 is a condition precedent to he assumption of the jurisdiction by the Income-tax Officer.
In the case of Narayana Chetty v. Income-tax Officer, Gajendragadkar J., as he then was, who delivered the judgment of the court, laid down the general law on the subject in these words :
'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.'
Consequently, the service of a valid notice under section 34 is a mandatory requisite of assessment or reassessment under section 34 of the Income-tax Act going to the root of the jurisdiction.
Hence, it is now necessary to determine whether the notice in the instant case without the signature of the Income-tax Officer is an invalid notice affecting jurisdiction or is a mere imperfect notice tantamounting to an irregularity.
There are no direct cases on the point under section 34 and in fact none was cited before us. In the course of arguments however, both parties referred to us several decisions, some of which require examination, for they may throw light on the precise point before us. In the case of Commissioner of Income-tax v. Swaminathan Chettiar, it was held by a Bench of the Madras High Court that the omission to state in the notice that it was directed against him as karta of the family was a mere irregularity when the assessee the return as such and did not agitate the point as to defective notice before the matter reached the Income-tax Tribunal. In the case of Commissioner of Income-tax v. Banarsilal Rajgarhia, the assessment year 1948-49 was clearly specified in one part of the notice but in another part beginning with the words 'whereas I have reasons to believe that your income assessable to income-tax for the year ending 31st March, 1948, has escaped assessment', a different assessment year was indicated. It was held by the Patna High Court on the facts that as the Income-tax Officer with all intents and purposes issued a notice to reassess the assessees income for the assessment year 1948-49, and it was understood by the assessee and as there was no violation of any condition precedent for the assumption of jurisdiction under section 34, the obvious clerical mistake in the notice in mentioning the year of assessment did not invalidate the notice or the reassessment proceeding taken in pursuance thereof or the order of reassessment. In the case of Commissioner of Income-tax v. Ramsukh Motilal, already referred to, the notice was held invalid, for the requisite period of 30 days to file the notice was not correctly stated in the notice. In the case of Tansukhrai Bodulal v. Income-tax Officer, Nowgong, it was held that if the notice under section 34 does not give the prescribed period of 30 days, the notice is invalid. In the case of Sewlal Daga v. Commissioner of Income-tax, the assessee was liable to be assessed as legal representative of his father who was the karta of the family but he was described in the notice under section 34 as Messrs. Chandrabhan Johurmull (karta Sewlal Daga). In these circumstances, their Lordships Mr. Justice Mitter and Mr. Justice K. Sen held that the notice under section 34 was illegal and void.
In the case of Commissioner of Income-tax v. Thayaballi Mulla Jeevaji Kapasi, it was held that if a notice under section 34 is not properly served, it is also an invalid notice.
In may opinion, the cases of the Madras High Court and the Patna High Court can be distinguished on facts found there on the ground that there was a mere irregularity or clerical mistake.
In the present case there was more than a mere irregularity or a clerical mistake for, in my view, a notice without the signature lacks an essential and/or an integral and/or an inseparable vital part or requirement of a notice under section 34, a notice in terms of which is a condition precedent to the assumption of jurisdiction by the Income-tax Officer. It is notice with a body but without a soul. Hence, it is an invalid notice and consequently equivalent to no notice.
It is now necessary to turn to the cases under the Public Demands Recovery Act which were referred to before us.
Rule 2 of Schedule II of the Act dealing with mode of service provides, inter alia, that the 'service of a notice..... shall be made by delivering or tendering a copy thereof, signed by the Certificate Officer or such Ministerial Officer as he authorises in this behalf......'
In the case of Abanindra Kumar Maity v. A. K. Biswas, the Certificate Officer did not put his signature on the notice in his own hand. The notice however bore a rubber stamp signature of the Certificate Officer. It was urged before their Lordships in these circumstances that the notice was invalid and consequently the proceedings thereunder were void. Their Lordships held that a signature by a rubber stamp does not fulfill the requirements of the Act and was consequently void. In a later case in Satish Chandra Bhowmick v. Union of India, a Bench of this High Court had to consider whether a signature by a rubber stamp was sufficient to fulfill the requirements of the Public Demands Recovery Act. Their Lordships held that since there was explicit mention of a signature in the prescribed form, the provision of section 2(20) which provides that a signature includes a 'stamp' does not apply to such a case. Hence, their Lordship held that the notice was invalid. In a later case, the case of Sethani Chhoti Debi v. Union of India, which was heard by a Bench consisting of Bachawat J. and Chatterjee J., their Lordships had to consider whether a facsimile signature was sufficient to fulfill the requirements of the Public Demands Recovery Act. Their Lordships, after referring to the relative provisions of the General Clauses Act and cases on will, came to the conclusion that a signature can be made by a rubber stamp and need not be in the handwriting of the officer issuing the notice. In this view of the matter their Lordships dissented from the view expressed in the case of Abanindra Kumar Maity v. A. K. Biswas, and preferred to follow the earlier case of Hara Prasad Gain v. Gopal Chandra Gain.
It will, however, be noticed that all those three cases proceeded on the basis that the requirement of the signature was mandatory and accordingly a condition precedent. The only question which they decided was whether a signature in the handwriting of the officer issuing the notice or any other authorised person is sine qua non or whether a signature in a rubber stamp put on the notice complies with the requirements of the prescribed form. Hence, in reality these cases did no directly deal with the point before us but they clearly suggest that where a statute or rule requires that the notice in writing must bear the signature of the officer its absence makes it invalid. Hence, these cases lend support to the view expressed by me.
It is next necessary to consider, whether the omission to place the signature in a notice under section 34 can be waived by the assessee after filing a return pursuant to the invalid notice and obtaining an order of assessment on the basis of the invalid notice, without challenging the same at any earlier stage of the proceedings before the Income-tax Officer.
In the case of Dhirendranath Ghorai v. Sudhir Ch. Ghose, a case which raised the question of waiver in relation to Order 21, rule 90, of the Civil Procedure Code and section 35 of the Bengal Money Lenders Act, the general principles regarding waiver in relation to statutory provisions were discussed at some length. It was observed there that this raises the question whether such a sale is a nullity. 'If a provision of statute is only directory, an act done in contravention of the provision is manifestly not a nullity. Section 35 of the Act is couched in a mandatory form and it casts in terms a duty on the court to comply with its provisions before a sale is held. Prima facie, the provision is mandatory, at any rate we shall assume it to be so for the purpose of the appeal.'
Their Lordships, after referring to several decisions and relative observations, finally summarized the matter in these words :
'Whether the court acts without inherent jurisdiction a party affected cannot by waiver confer jurisdiction on it, which it has not, when such jurisdiction is not wanting a directory provision can obviously be waived. But a mandatory provision can only be waived if it is not conceived in the public interests, but in the interest of the party that waives it. In the present case, the executing court had inherent jurisdiction to sell the property...'
In may opinion, section 34 is couched in a mandatory form in the public interest. Hence, there cannot be any question of waiver in respect of a breach of a provision under section 34.
In the case of Ramsukh Motilal, it was suggested that the omission cannot be waived and the point can be taken at any stage of the proceeding. The case of Narayana Chetty makes it abundantly clear that the notice cannot be waived.
In this connection greater reliance was placed by the revenue on the case Central Potteries Ltd. v. State of Maharashtra, a case under C. P. & Berar Sales Tax, 1947. In that case it was held that '. . . even if the proceedings for assessment were taken against a non-registered dealer without the issue of a notice under section 10(1) that would be a mere irregularity in the assumption of jurisdiction and the orders of assessment.. . . cannot be held to be without jurisdiction.. .'
Hence, these cases do not militate against the principle that there can be no waiver where the condition precedent for assumption of jurisdiction is not fulfilled.
There is a further point for consideration. It was suggested that the point must have been known to the lawyer from the beginning and it was not taken deliberately and fraudulently until the expire of eight years and thereby has prejudiced the department. Hence, the assessee should not be allowed to take advantage of his lawyers fraud.
There is no evidence that the point was raised fraudulently and deliberately at this belated stage. The fact at the most raises a suspicion. Even assuming that the point was kept in the sleeves deliberately and taken at a time when it will prejudice the department, it cannot confer jurisdiction when there is none.
There is a further point for consideration on the assumption that there could not be a waiver of such an invalid notice.
The findings are that the advocate received the notice, appreciated the defect in the notice, deliberately did not take the point of invalidity of the notice under section 34 till the prescribed period of limitation, to wit, eight years, had expired and the he in fact took it 11 days after the prescribed period of eight years had expired. In these circumstances it was said that the assessees lawyer waived the assessees right to challenge the irregularity of the notice. In other words, the question for consideration is whether the knowledge of the lawyer and his intentional relinquishment of the right on behalf of his client is sufficient to fasten it on the client himself when he is not aware of the position in law and does not in fact relinquish his right voluntarily with knowledge of the same. In my opinion, no warrant of attorney is worded in such wide terms as to enable a counsel or a lawyer to waive the rights of the client without referring the matter to him. There is no evidence that the matter was referred to the assessee or that he had knowledge of the same. Hence, in my opinion, in law again Mr. Banerjee was not competent to waive the right which his client had.
In the result, the answers must be in favour of the assessee. The assessee will get the costs of this application.
LAIK J., - In this reference, the assessment was originally completed on September 23, 1946, under section 23(3) of the Income-tax Act, 1922, on a total income of Rs. 10,000 and odd. On February 3, 1951, a notice under section 34 of the Act was served on the assessee for the encashment of high denomination notes, worth Rs. 14,000, in the year of account, calling upon the assessee to file a return, which was done on March 20, 1951.
It is contended broadly, on behalf of the assessee, that the notice under section 34 is not signed by the Income-tax Officer and, therefore, the same is altogether bad and the proceedings are void ab initio.
The Appellate Assistant Commissioner gave effect to the said contention. As the Appellate Tribunal took the other view, the instant reference, at the instance of the assessee, is the result.
With these short facts for its foundation. an interesting argument was addressed before us. It is resolutely challenged by Mr. Meyer appearing for the revenue that there is nothing in section 24 of he Income-tax Act that the notice is to be signed and that there is nothing specific therein that the notice under the said section must be in writing. But in my view, on the language of the section it cannot be disputed, and in fact, it is rightly conceded by Mr. Meyer, at the end that an oral notice under the said section is insufficient.
Coming to the Rules under the Act and the Forms, etc., it is stated that the Income-tax Manual, 10th edition, was issued by the Central Government and not by the Central Board of Revenue and that also after the amendment of 1948. It contains certain notes on the Act, which include the instructions. Part III of the said Manual contains instructions (pages 447 and 449). In my opinion the notes in respect of section 34, do not come under the category of instruction or directions within the meaning of section 5(8) of the Act, though they are indeed popularly used and commonly called the instructions. I. T. Form No. 90, which is strongly relied on, is not prescribed by the Rules. If the other Forms (save immaterial exception) are scrutinized, it would also appear that in most of the cases, where there occurs the expression 'assessee', there is a provision for the signature, but where there occurs the expression 'Income-tax Officer', no signature is provided for. Further scrutiny reveals that there is no provision for the seal in the Act. Even an order under section 18A of the Act, it is argued, does not require to be signed by the Income-tax Officer. On the other hand, it appears that the notice under section 34(1B) of the Act is prescribed by rule 49, but not so the notice under section 34. Still one must ask oneself as to whether any principle could be deduced from all these, as there is not logical consistency as to the provisions of signing and non-signing, in the Act, Rules, Instruction, Notes, Forms, etc., though the revenue authorities are presumed to act conformably to them.
It has been contended that it is difficult to follow the reasoning of Chakravartti C.J. in the case of R. K. Das & Co. v. Commissioner of Income-tax, particularly the place at the top of page 449. But it should be remembered that the general principles in the said case as well as in the case of Commissioner of Income-tax v. Ramsukh Motilal, are approved by the Supreme Court in Narayana Chettys case which also speaks of prescribed notice. Mr. Meyer strongly relies on Bench decision of this court, where Bachawat J. (as his Lordship then was) sitting with Chatterjee J. held, in the case of Sethani Chhoti Debi v. Union of India, referred to by my learned brother, to the effect that even rubber stamp signature was sufficient. The principal reason, which weighed with their Lordships for the said decision, was that the person issuing the notice was identified. It should be stated that the said Division Bench, contrary to the principles of judicial decorum, laid down by the Supreme Court in the case of Mahadeolal Kanodia v. Administrator-General of West Bengal, did not follow another earlier Division Bench decision of this court in the case of Abanindra Nath Maity v. A. K. Biswas (also a case of rubber stamp signature) which held that the signature was essential and the rubber stamp signature was not sufficient. Another Bench decision of this court in the case of Satish Chandra Bhowmick v. Union of India, was also cited. No opinion need be expressed on the said decisions, as they do not directly touch the present issue.
Mr. Meyer refers to the provisions of signature in many other statutes referred to by my learned brother. In my view such reference, in most of the other enactments, would not be of much help For example, the Public Demands recovery Act relies on its own rules, whereas the Income-tax Act refers to the Code of Civil Procedure. Similarly, according to section 94 of the Negotiable Instruments Act, the notice might be oral, which is not so in section 34. In the Revenue Recovery Act, the seal is treated as signature. There is difference again in some of the statutes between the service and the giving of the notice.
Mr. Meyers next argument is that if the strict requirement of the signature is insisted upon, serious consequences might follow in certain cases. The said submission, in my view, should not be accepted on the principle laid down by K. C. Das Gupta and Bachawat JJ. (as both of their Lordships then were) in the case of Gopiram Agarwalla v. First Additional Income-tax Officer.
If we look at the matter from another aspect, it appears that there is difference in principle as to the notice between section 35 and section 34 of the Act. The notice in section 35 is to be judged from the principle of natural justice, whereas the notice under section 34 creates jurisdiction. The notice under section 14(2) of the Arbitration Act cannot be brought in for comparison as the same does not give jurisdiction to the court and, therefore, section 42 of the said Act is not comparable to section 63 of the Income-tax Act.
Accordingly, my opinion is that the notice under section 34 of the Income-tax Act, 1922, to be a proper, valid and legal notice, requires to be signed by the Income-tax Officer, non-compliance of which would make it bad and all the proceedings started thereafter would be without jurisdiction.
Mr. Meyer, however, in the last resort contended that in the facts of this case, the assessee in any event, waived the notice. The expression 'wavier' has a professional meaning. It is true that the notice was duly served and was said to have been received by the assessee, but it is determined on high authority, that the notice under section 34 (I mean a valid notice) is a condition precedent for the assumption of jurisdiction. A notice under section 34 is therefore, not merely a procedural requirement. In its absence, it does not become a case of procedural defect. The difference between the cases of want of jurisdiction and those of irregular exercise of jurisdiction, is to be remembered in this context.
The notice under section 34 of the Act is not an executive document, directing something to be done or not to be done. It might be true that everybody understood the notice alright. One might be struck also by the facts that prior sanction of the Commissioner of Income-tax was obtained and that the assessee was not misled by the notice; and the non-signing might be a case of inadvertent omission. Still in my view, it is not a mere irregularity that can be cured. Non-signing of a notice under section 34 of the Income-tax Act does not come within the formula of an obvious clerical mistake. As the finality of the assessment is one of the main principles to be followed in tax cases and as the re-opening of the assessment under section 34 is a matter of public policy (though I am not unmindful that it is not a case of fundamental right) and as a right under section 34 is not intended to be conferred only for the benefit of the assessee (though it might dominate and condition the right of the assessee), i.e., it is not a private right, meant merely for individual benefit, there is a prima facie difficulty in my way to hold that there can be waiver of the notice under section 34 of the Income-tax Act. The subsequent conduct of the assessee is also of no moment.
For these reasons the answer given by my learned brother in favour of the assessee along with the order for costs, has my entire concurrence.