SABYASACHI MUKHARJI J. - The assessee is a Hindu undivided family. This reference arises out of the reassessments made in respect of the wealth-tax assessment years 1957-58, 1958-59, 1959-60 and 1960-61 for which the relevant valuation dates are 31st March, 1957, 31st March, 1958, 31st March, 1959 and 31st March, 1960, respectively. The assessments had been originally completed under section 16(3) of the said Act on the basis of returns filed by the assessee. The Wealth-tax Officer thereupon took proceedings under section 17(b) of the Wealth-tax Act on the ground that a part of the assessees wealth had escaped assessment. Notices under section 17(b) of the Act were served on one, T. P. Pal, on 15th November, 1960, for the assessment years 1957-58, 1958-59 and 1959-60 and on 30th November, 1960, for the assessment year 1960-61. It appears that Shri T. P. Pal had signed order sheet stating that he had received notices for three assessment years on 30th November, 1960, and for the assessment year 1960-61. No point was taken at the assessment stage that notices were not validity served upon the assessee. The Wealth-tax Officer completed reassessments for the assessment years 1957-58, 1958-59 and 1959-60 on 31st January, 1961, and for 1960-61 on 30th January, 1961, bringing to assessment escaped assets valued at Rs. 3,84,535, Rs. 3,84,535, Rs. 3,47,042 and Rs. 3,37,668 respectively for the four years.
On appeal before the Appellate Assistant Commissioner a ground was allowed to be taken that the notices under section 17(b) had not been validly served on the assessee and consequently the reassessment were bad in law. It was contended that Shri T. P. Pal was not an accredited agent of the assessee and, therefore, the service of notices on him did not constitute proper service. The Appellate Assistant Commissioner rejected that contention and held that, as Sri T. P. Pal was an accountant of the assessee and was regularly attending to the wealth-tax matters of the assessee in all these years and that he had been given written authorisation by the assessee to represent the assessee in all wealth-tax matters, there was a valid service upon the assessee under section 17(b) of the Act by serving notices on Sri T. P. Pal. The Appellate Assistant Commissioner, however, held that even on the footing that there was no proper service, the assessee having filed the returns without objection, had waived any irregularities in service and that the reassessments have to be upheld on that basis.
The assessee preferred a further appeal before the Appellate Tribunal and contended that Sri Pal had no authority to accept service of notices. The Tribunal held that Sri Pal was empowered only to represent the assessee in the Wealth-tax matters and was not granted authority to accept service of any notices on behalf of the assessee. The Tribunal was of opinion that there has been no proper service on the assessee of the said notice under section 17(b) of the Act. The Tribunal held that the service of a notice on the assessee is a condition precedent to the validity of a reassessment made under section 17(b) of the Act; and as valid notices have not been served according to the Tribunal, the proceedings taken by the Wealth-tax Officer in pursuance of invalid notices and consequent orders of reassessments passed thereon were void and inoperative. The Tribunal, therefore, set aside the assessments made on the assessee under section 17(b) of the Act as being void and inoperative.
The following questions have been referred to this court under section 27(1) of the Wealth-tax Act, 1957;
'(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessees accountant, Shri T. P. Pal, was not an agent of the assessee for the purpose of accepting service of any process on the assessee and that accordingly there was no proper service of notice on the assessee ?
(ii) Whether, in any event, having regard to the fact that the assessee had filed returns in compliance with the notices under section 17(b) of the Wealth-tax Act served on the said accountant, the Tribunal was right in holding that the assessments made on the assessee on the basis of the said returns were void and inoperative ?'
Mr. B. L. Pal, learned counsel for the revenue, relied on the decision in the case Commissioner of Income-tax v. Bhanji Kanjis Shop. In that case it was held that the two modes of service of notice mentioned in section 63(1), of the Indian Income-tax Act, were not exhaustive and it was permissible to have a notice served in a way not mentioned in section 63(1) of the Indian Income-tax Act, 1922. The court further observed that even if there was any procedural irregularity in the service of a notice of reassessment, if the assessee admits that he had received the notice, the contention on behalf of such an assessee that the notice was improperly served must be rejected. In that case what happened was that a notice under section 34 (1) (a) of the Indian Income-tax Act, 1922, was served on a temporary agent of an assessee, who was not an authorised agent for receipt of notices on behalf of the assessee. The assessee filed a return in pursuance of the notice and an order of reassessment was passed. In appeal against the order the assessee had contended that the notice or reassessment had been improperly served and so the order of reassessment was bad in law. It was held by the court that in view of the fact that a return had been filed by the assessee in pursuance of the notice served on his temporary employee, it was clear that the notice had been receive by him. The reassessment proceedings had, therefore, been properly instituted. Mr. Pal submitted that, in the facts and circumstances of this case, it was clear that Sri T. P. Pal was the agent of the assessee, authorised to accept service. Mr. Pal further submitted that, in any event, returns having been filed, the assessee has waived irregularity in the manner of service, if any.
Dr. Devi Prosad Pal, learned counsel for the assessee, on the other hand, contended that service of a notice under section 17(b) of the Wealth-tax Act was a condition precedent for the assumption of jurisdiction and if the said notice has not been properly served the Wealth-tax Officer would have no jurisdiction. He further submitted that the service must be strictly in compliance with the provisions of section 41 of the Wealth-tax Act, that is to say, it must be in compliance with the Code of Civil Procedure. He drew our attention to the decision in the case of Sewlal Daga v. Commissioner of Income-tax. In that case this court held that service of requisite notice on the assessee was condition precedent to the validity of any reassessment made under section 34 of the Indian Income-tax Act, 1922, and if valid notice was not issued as required, the proceedings taken by the Income-tax officer in pursuance of an invalid notice and consequent orders of reassessment passed by him would be void and inoperative. Reliance was also placed on the decision in the case of Ramendra Nath Ghosh v. Commissioner of Income-tax.
Section 41 of the Wealth-tax Act is in pari materia with section 63 of the Indian Income-tax Act, 1922. These provisions require that notices under the said Acts may be served either by post or in the same manner as summonses under the Code of Civil Procedure are served. Under Order 5, rule 12 of the Code of Civil Procedure, service should be made on the defendant in person, whenever practicable, unless he has an agent empowered to accept service, in which case service on such agent would be deemed to be sufficient. Before service of summons on a person other than the defendant is held to be sufficient under Order 5, rule 12, it must be established by evidence that the person had been duly authorized to accept service on behalf of the defendant. Order 3, rule 2 of the Code, states who are the recognized agents by whom appearances, applications and acts may be made. Order 3, rule 3, of the Code of Civil Procedure, states :
'Processes served on the recognized agent of a party shall be as effectual as if the same had been served on the party in person, unless the court otherwise directs.'
The authority given to Shri pal by the assessee appears at page 18 of the paper book which is as follows :
'I, Amitava Pal Choudhuri of 64, Lake Place, Calcutta 29, hereby authorise under section 44 of the wealth-tax Act of 1957, Sri Tara Pada Pal, our accountant, to represent us in connection with our wealth-tax assessment and/or appeal and/or review proceedings for the assessment year 1958-59 and produce the accounts and documents connected therewith.
His explanation and statement will be binding on us.'
It is admittedly the position that Shri Pal was the accountant of the assessee. Shri Pal also has accepted the service as it would appear from the order sheet as mentioned in page 20 of the paper book. The returns were also filed before the Wealth-tax Officer by the assessee pursuant to these notices received by Shri Pal addressed to the assessee. No pint was taken that the assessee was not properly or validly served. In the original grounds taken before the Appellate Assistant Commissioner also this point had not been taken. Taking the cumulative effect of all these factors together, it appears that there is sufficient evidence to establish that Shri T. P. Pal had been duly authorised to accept service of notices on behalf of the assessee in respect of the wealth-tax matters including the notices of reassessment under section 17(b) of the Wealth-tax Act. If that is the position, then under Order V, rule 12 of the Code, service on Shri Pal would be sufficient and in compliance with the provisions of the Code of Civil procedure and, as such, would be a proper service under section 41 of the Wealth-tax Act.
In that view of the matter, we are of the opinion that Shri Pal was an agent of the assessee for the purpose of accepting service and there has been a proper service on the assessee and, consequently, the reassessments have been validly made. The question No. 1 referred to this court is, therefore, answered in the negative. In view of the answer given to question No. 1, the question No. 2 does not arise and need not be answered.
The assessee will pay the costs of this reference to the Commissioner of Wealth-tax.
SANKAR PRASAD MITRA J. - I agree.