BALKISHAN DAS Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THIS income-lax reference has been placed before us in pursuance of the order dated 29-4-1965 passed by a Division Bench of which I was a member. The question which we are called upon to answer was formulated by the Income-tax tribunal (Delhi Bench) in the following terms: "whether on the facts and in the circumstances of the case the service of the notice under Section 34 on the assessee was invalid at law as a copy of the notice was not affixed at any conspicuous place in the Court-House or at any conspicuous place in the Income-tax Office. " the facts have been stated in the refering order, but I may briefly recapitulate them for our present purpose. The assessee Seth Bal Kishan Dass was assessed originally in February, 1948. Later, the Income-tax Officer had reason to believe that certain immovable property and shares in companies acquired by the assessee during the accounting period had escaped assessment because the same had not been disclosed in the original return. A notice for personal service under section 34 (1) (a) of the Indian Income-tax Act (No. XI of 1922) was accordingly issued to the assessee on 28-3-1956. On the same day, a notice was also issued by registered post which was received by the assessee on 2-4-1956. The process-server who had taken the notice for personal service reported to the income-tax Officer on 28-3-1956 that he had tendered the notice to the assessee personally on the same day, but the assessee had declined to receive the same. The Income-tax Officer thereupon directed service of notice by affixation. The notice was accordingly affixed on the outer door of the residence of the assessee on 31-3-1956. No copy of the notice was, however, affixed on any conspicuous place in the Income-tax Office or in the Court-House. There is no controversy about these facts which are undisputed.

(2.) THE submission strongly pressed before us by Shri Chetan Dass, learned advocate for the assessee, is that the service which the department has relied upon is the service effected by means of affixation on the outer door of the residence of the assessee under the provisions of Order 6, Rule 20, Code of Civil procedure, and this service is, in the absence of affixation of a copy of the notice on some conspicuous place in the Court-House or on some conspicuous place in the Income-tax Office, invalid. The learned counsel has based this contention on the plain language of Section 63, Indian Income-tax Act 1922 and of Rule 20 of order 5, Code of Civil Procedure. According to him, Court-House, as used in Rule 20, should, for the purpose of the present case, be deemed to mean Income-tax office because the word "court" has a varied Import. The counsel has referred us to the Oxford English Dictionary, according to which the word "court" means the place, hall or chamber in which justice is administered. The place where the Income-tax Officer holds assessment proceedings may well, according to the learned counsel, mean Court-House. Stress hag in this connection been laid on the argument that the department did not care to rely on the refusal by the assessee to accept the service of the notice when personally tendered to him by the process-server; nor did the department rely on the notice despatched by registered post, which though issued on 28-31956, was received by the assessee on 2-4-1956. Support for the challenge to the validity of the notice has been sought by Dewan Chetan Dass from two Bench decisions of this Court. The first case is reported as jhabar Mal v. Commr. of Income-tax, AIR 1963 Punj 486. This is followed in the second decision which is reported as Daulat Ram Khanna v. Commr. of Income-tax, 1964 Cur LJ 528 (Punj ). The contrary view adopted by a Bench of the Saurashtra high Court in Memon Aba Isa Haji Adreman Dharar v. Memon Mamad Haji sule-man Chamadia, AIR 1956 Sau 28, according to the counsel is unsound. On behalf of the assessee, it is also submitted that the jurisdiction which this Court exercises in reference proceedings is advisory and the only function this Court has to perform is to answer the precise question referred and not to consider or answer any other question of law. Reliance for this submission is placed on the commr. of Income-tax v. Scindia Steam Navigation Co. Ltd. , AIR 1961 SC 1633.

(3.) THE respondents' learned counsel has on the other hand questioned the correctness of the view taken in the two Bench decisions of this Court mentioned above. He has for his submission placed reliance on the decision of the Saurashtra high Court in Memon Aba's case, AIR 1955 Sau 28. The argument briefly put is that the procedural formalities requiring service of notice are not to be rigidly adhered to and they are mandatory only to the extent to which they may be considered necessary for effectuating the real purpose of informing the person to be served of the contents of the notice. In the case in hand, affixation in the court-House or in the Income-tax Office could not have been more effective than affixation on the outer door of the residence of the assessee; and when the assessee had also declined to receive a copy of the notice, service of the notice should not be held to be invalid merely because of omission to affix a copy in the court-House or in the Income-tax Office. According to the counsel, Order 5, Rule 20, has to be construed in a practical way and being a rule of procedure, it should be so construed as to subserve the real purpose and should not be allowed to obstruct or defeat the cause of justice. The counsel has also controverted the submission urged on behalf of the assessee that the Income-tax Office should in the present context be considered to be a Court-House within the contemplation of Order 6, Rule 20, C. P. Code. In the alternative, it is submitted that the service of notice on the facts and circumstances of the present case is, in any event, valid independently of the provisions of Order. 5, rule 20, Code of Civil Procedure. It has been emphasised that the question framed for answer by this Court is very comprehensive and the real controversy to be considered in answering the question is whether the service of notice on the facts and circumstances of this case is valid, notwithstanding the fact that no copy of the notice was affixed on some conspicuous place in the Court-House or in the Income-tax Office. The question referred, according to the counsel, is not confined within the narrow limits of the scope and effect only of Order 5, Rule 20, Code of Civil Procedure, for the purpose of determining the validity of the notice. For this submission support is sought from a decision of the Supreme Court in Banarsi Debi v. Income-tax Officer, (1964) 53 ITR 100: (AIR 1964 SC 1742), and also from the decision of the supreme Court in the case of Scindia Steam Navigation Co. Ltd. , AIR 1961 SC 1633, mentioned above. The learned counsel has fortified his arguments from another decision of the supreme Court in Commr. of Income-tax v. Ogale Glass Works Ltd. , (1954) 25 ITR 529: (AIR 1954 SC 429), and from a decision of the Bombay High Court in commr. of Income-tax, Bombay v. Breach Candy Swimming Bath Trust, Bombay, (1955) 27 ITR 279: (AIR 1955 Bom 250 ). Passing reference has also been made to p. 919 of the Law and Practice of Income-tax by Kanga (5th Edition), where it is stated that it is open to the Court without raising new and different questions to resettle or reaffirm the question formulated by the Tribunal before answering them so as to bring out the real issue between the parties.