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TMI Blog1965 (4) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee came forward with a disclosure under the voluntary disclosure scheme in March, 1952. On the basis of this disclosure an assessment was made on an amount of ₹ 49,091. The Income Tax Officer thereafter came to know that the assessee had encashed high denomination notes worth ₹ 18,000 after the ordinance of January, 1946 and that he had also made certain deposits in the Midnapore Bank Ltd. which had not been disclosed before. He issued a notice under section 34 (1) (a) of the Act on March 4, 1955, with the previous approval of the Commissioner of Income Tax. An attempt was made to serve this notice though the process-server who reported on March 9, 1955, that the notice could not be served as the assessee was not available. A second attempt made by the process-server on March 11, 1955, was also not successful and the other inmates of the house of the assessee refused to accept the notice. The Income Tax officer thereafter directed service of notice by registered post. The notice was put in the post on March 14, 1955. As no acknowledgment or service was received from the postal authorities even on March 29, 1955, the Income Tax Officer ordered that the notice be ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under rule 16 : where the serving officer delivers or tenders a copy of the summons to the defendant personally or to an agent or other person on his behalf, he shall require the signature of the person to whom the copy is so delivered or tendered to an acknowledgment of service endorsed on the original summons. Under rule 17 : where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgment, or where the serving officer, after using all due and reasonable; diligence, cannot find the defendant, and there is no agent empowered to accept service of the summons on his behalf, nor any other person on whom service can be made, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain.... The facts relating to the service of the notice as appearing in the order of the Income Tax Officer are as follows : A notice under section 34 dated March 4, 1955, was issued after getting the necessary satisfaction of the Commissioner of Income Tax, Calcutta. This notice was sent for service through the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e outer door or some other conspicuous part of the house in which the assessee ordinarily resided was in order. It is not suggested in this case that the address of the assessee to which the notice was went was not his proper address, nor that he had any agent to whom he had given instructions to receive such notices on his behalf. In my view, reasonable diligence had been used to find the assessee without any avail and the circumstances justified the service of the notice by affixing a copy of it on the outer door or some other conspicuous part of the house in which the assessee lived. Reliance was placed on a judgment of the Division Bench of this court in Gopiram Agarwalla v. First Additional Income Tax Officer in support of the contention that the service by affixation is not good service unless all efforts to trace the assessee are found to be unsuccessful. Then the facts were as follows : When the serving officer went with the notice to the address of the assessee he found that the assessee was out. He offered the notice to a person who was pointed out to him as the assessees son and on the latters refusal to accept the service he affixed the notice on the premises. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) (c) could have been issued on February 21, 1952, because no assessment had been made on the return filed in 1949. Further, no assessment could have been made in 1952, because the four-year period had expired in 1951 If the assessment made in 1952 was a nullity, the Income Tax Officer could not proceed on the basis of any Income escaping assessment in 1955, so as to sanction the issue of a notice under section 34. The learned advocate for the assessee drew our attention to certain observations in the case of Commissioner of Income Tax v. Ranchhoddas Karsondas and Commissioner of Income Tax v. S. V. Angidi Chettiar in aid of his contentions. In the first case the assessee had not made a return of his income in response to a public notice under section 22 (1) of the Act on or about May 1, 1945. He submitted a voluntary return on January 5, 1950 of his income for the accounting year 1944-45 (assessment year 1945-46), showing a total net income of ₹ 1,935 below the taxable limit. The Income Tax Officer did not act on this return but on February 27, 1950 he purported to issue a notice under section 34 calling upon the assessee to submit his return. This notice was served on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons specified in clause (a), (b) or (c) before the proceedings are concluded. The proceeding to levy penalty has however, not to be commenced by the Income Tax Officer before the completion of assessment proceedings by the Income Tax Officer. Satisfaction before conclusion of the proceedings under the Act and not the issue of a notice or initiation of any step for imposing penalty is a condition for the exercise of jurisdiction. There is no evidence on the record that the Income Tax Officer was not satisfied in the course of the assessment proceeding that the firm had concealed its income . These two cases however do not help the assessee before us. Under section 34, as it stood at the material time, no order of assessment under section 23 or of assessment or reassessment under sub-section (1) of the section could be made after the expiry, in any case to which clause (c) of sub-section (1) of section 28 applied of eight years and in any other case of four years from the end of the year in which the income, profits or gains were first assessable. The statement of the case before us show that it was after the provisional assessment in November, 1949, that the Income Tax Officer ..... 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