NARANG R L Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are four references at the instance of two assessees, R.L. Narang and M. L. Narang. IT Ref. Nos. 205 and 206/72 pertain to the asst. yrs. 1967 -68 and 1968 -69 in the case of R. L. Narang and IT Ref. Nos. 211 and 212/72 pertain to M.L. Narang for the same assessment years. The questions referred in all the four cases are the same which are as follows :

(2.) AS such, it is apparent that the point in issue is, whether the assessees were afforded an opportunity of being heard, before the imposition of penalty, under S. 140A(3) of the INCOME TAX ACT, 1961 (to be referred to in brief as "the Act"). From the record, it appears, that on assessments being made, it was found that the tax payable, on the basis of the return, exceeded Rs. 500 despite giving credit for taxes paid. In these circumstances, it was incumbent upon the assessees to make a voluntary payment within 30 days from the date of furnishing the return of income. But the assessees failed to do so. The ITO, therefore, issued show -cause notices on 31st Jan., 1969. These are said to have been served on

(3.) THE Revenue then preferred appeals before the Tribunal contending that the ITO had been justified in treating the service effected on 3rd Feb., 1969, and reminders sent under postal certificate as sufficient service, thereby giving the assessees a reasonable opportunity of being heard. The Tribunal accepted this contention, mainly based on the fact that the assessees had not filed affidavits categorically asserting that they had not received the notices and that these were delivered to some other persons. It was also of the view that in the normal course notices sent under postal certificates should have reached the assessees at the address mentioned. The appeals were, therefore , allowed. Before us, it has been urged on behalf of the assessees that service was not effected and as such the assessees had no opportunity of being heard. In order to appreciate this contention, it is necessary to examine the provisions of s. 282 of the Act and S. 27 of the General Clauses Act, 1897. Sec. 282 of the Act provides that the service of a notice can be effected either by serving the person concerned by post or as if it were a summons; if the latter, then the procedure to be adopted would be as under the CPC.