1965 (12) TMI 1 - HC - Income Tax

notice under section 34 - service of the notice - validity - contention that law as 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

Summary

Issues:
Validity of service of notice under section 34 of the Indian Income-tax Act, 1922.

Analysis:
The case involved a question of whether the service of notice under section 34 on the assessee was invalid due to the notice not being affixed at any conspicuous place in the court-house or income-tax office. The Income-tax Officer had reason to believe that certain assets had escaped assessment and issued a notice for personal service on the assessee. The notice was tendered personally but declined by the assessee, leading to service by affixation on the door of the assessee's residence. The main argument by the assessee's counsel was that the service through affixation was invalid without a copy being affixed in the court-house or income-tax office. The counsel relied on the language of the Indian Income-tax Act and Code of Civil Procedure, contending that the term "court-house" should include the income-tax office. The counsel also referenced previous court decisions to support the challenge to the validity of the notice.

On the other hand, the respondents' counsel argued that procedural formalities for notice service should not be rigidly adhered to and are mandatory only to the extent necessary to inform the person being served. The counsel emphasized that affixation on the residence's door was effective, especially since the assessee had declined to receive the notice. Additionally, the counsel contended that the question referred was not limited to the scope of the Code of Civil Procedure and should be considered more broadly to determine the validity of the notice. References were made to various court decisions to support this argument.

The court held that the service of notice was valid, emphasizing that section 63 of the Indian Income-tax Act allows for service by post or as if it were a summons issued by a court. The court noted that the notice was issued within the prescribed time frame and the service through post was valid. The court rejected the argument that the question referred was limited to the Code of Civil Procedure, stating that the notice served by registered post was also valid. The court answered the question in the negative, ruling in favor of the revenue and awarding costs.

In conclusion, the court determined that the service of notice under section 34 was valid, rejecting the contention that affixation without a copy in the court-house or income-tax office rendered the notice invalid. The decision was based on the provisions of the Indian Income-tax Act and broader interpretations of the question referred, ultimately ruling in favor of the revenue.