RAI H R Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference is made by the Tribunal as directed by the High Court in M.C.C. No. 443 of 1974, decided on 16th November, 1979, referring for our answer the following questions of law:

(2.) THE facts in so far as relevant and briefly stated are that the reference relates to the year 1967-68. THE assessee who is a doctor did not file the return of income under s. 139(1) and the ITO issued a notice under s. 148 on 24th May, 1969. This notice was served on a person on 13th June, 1969. Initials on the office-copy of the notice in token receipt of the notice are not legible. THEreafter, a notice under s. 142(1) was issued. THE assessee filed his return on 27th December, 1969. After issuing notice under s. 143(2) and recording the statement of the assessee on oath the ITO computed the income of the assessee at Rs. 44,346 and assessed him to tax accordingly. In the proceedings before the ITO the assessee did not raise any objection that the notice under s. 148 was not served on him. THE assessee filed an appeal to the AAC. In the grounds of appeal one of the points taken was that "there being no proper service of statutory notices, the proceedings are illegal and bad in law. At the stage of argument before the AAC it was stated by the assessee that the signatures on the office-copy for receipt of the notice were not his signatures and the receipt of the notice is by a person not authorised by him. THE AAC held that it was difficult to accept this statement of the assessee made at a late stage specially considering the fact that the notice u/s. 142(1) issued on the basis of the notice u/s. 148 was accepted by the assessee all along as correct. In further appeal before the Tribunal the assessee again questioned the validity of the service of the notice. THE Tribunal negativing the contentions observed that it was not the contention of the assessee that the notice u/s. 148 issued by the ITO did not reach him. THE Tribunal held that in fact the notice had reached the assessee and he had also complied with it and filed a return in compliance with it on 27th December, 1969. THE Tribunal further found that the assessee also complied with the notices u/s. 142(1) and s. 143(2) issued by the ITO and participated in the assessment proceedings throughout without any objection. THE Tribunal on these facts concluded that even though the assessee may not have been personally served with the notice and the person who received it might not have also been authorised to receive it on his behalf, yet as the notice in fact reached the assessee and he complied with the same, the service must be held to be valid.

(3.) THE assessee did not dispute before the Tribunal that he in fact received the notice. THE assessee participated throughout in the assessment proceedings before the ITO without raising any objection. Even if there was any procedural irregularity in the service of notice in that it was not served by the serving officer on the assessee personally or an agent empowered to receive service that irregularity loses all significance once it is held that the notice was in fact received by the assessee and was acted upon by him before the ITO without raising any objection. Such a procedural irregularity in service of the notice under s. 148 cannot be held to invalidate the assessment. THE view taken by us is fully supported by the decision of the Gujarat High Court in CIT vs. Bhanji Kanji's Shop (1968) 68 ITR 416. In that case it was observed that (headnote)," even if there is a procedural irregularity in the service of a notice of reassessment, if the assessee admits that he had received the notice, or from the facts it can be found that he must have received the notice, the contention on behalf of such an assessee that the notice was improperly served must be rejected". THE case of the Gujarat High Court was followed by the Patna High Court in Mahendra Kumar Agrawalla vs. ITO 1975 CTR (Pat) 33 : (1976) 103 ITR 688. We respectfully agree with the view taken in these cases.