Income Tax Appellate Tribunal - Nagpur
Commissioner Of Income-Tax, C.P. vs Baxiram Rodmal. on 6 April, 1934
Equivalent citations: [1934]2ITR438(NAG)
ORDER
The Commissioner of Income Tax, in compliance with this Courts order, has referred certain questions under Section 66 (2), Income Tax Act, for our decision. The Income Tax Officer issued a notice under Section 23 (2) of the Act to the assessee, a joint Hindu family. This was served on Asaram, the accountant of the joint family business. In response to that notice Kisanlal, a member of the joint family, appeared on response to that notice Kisanlal, a member of the joint family, appeared on 19th December, 1930 and asked for further time in which to produce his accounts. It is not apparent from the order sheet exactly what happened but it has been conceded before us that the Income Tax Officer told him that an extension would be allowed and that the date for further hearing would be intimated to him. A notice, in the form used for notices under Section 23 (2), was issued to the joint family and served on Asaram at the joint family shop. The date fixed was 8th January, 1931, and on that date no one appeared. The Income Tax Officer accordingly made an ex parte assessment under Section 23 (4) On 28th February, 1931, the assessee applied under Section 27 to have the assessment cancelled and affidavits were filed by Asaram and Kisanlal stating that the contents of the second notice were not communicated by Asaram to Kisanlal. The Income Tax Officer held that Asaram had implied authority to accept notices and that therefore Kisanlal had a reasonable opportunity to comply with the notice. On appeal the Assistant Commissioner held that a notice to Asaram was a valid notice to the assessee and also that no notice was in fact necessary.
Under Section 63 (1) of the Act a notice or requisition under this Act may be served on the person therein named either by post or, as if it were a summons issued by a Court, under the Civil Procedure Code, and such notice or requisition may, in the case of a Hindu undivided family, be addressed to any adult male member of the family. Order III, Rule 2, Civil Procedure Code, defines "recognized agents" and Rule 3 provides that processes served on the recognized agent of a party shall be as effectual as if the same had been served on the party in person. Order V, Rule 12 provides that service shall, wherever it is practicable, be made on the defendant in person, unless he has an agent empowered to accept service in which case service on the agent shall be sufficient. Order III, Rule 6 provides that, besides the recognized agents described in Rule 2, any person may be appointed as agent to accept service of process, but such appointment must be made by an instrument in writing signed by the principal. It is not suggested that Asaram was a recognized agent or had been appointed an agent to accept service by an instrument in writing, and the petitioner has therefore urged that there was no valid service on the assessee.
The Commissioner of Income Tax has supported the finding of the Assistant Commissioner that it was incumbent on the assessee to find out for himself the date to which the case had been adjourned and that it was not necessary for the Income Tax Officer to inform him of that date. Ordinarily it may be the duty of the assessee who applies for an adjournment to find out the date fixed, but when the Income Tax Officer tells the assessee than an adjournment will be allowed and that the adjourned date will be intimated to him, we are of opinion that it is not incumbent on the assessee to find out that date but that he is entitled to a wait the promised information : Commissioner of Income Tax, Madras v. Perianna Pillai. It appears that Asaram has received notices on behalf of the assessee on previous occasions and has appeared before the Income Tax Officer on behalf of the assessee. In giving evidence Asaram stated :
"I used to take income-tax notices addressed to my master. Whenever the owner was in the shop he used to take them but in his absence I was not taking the notices but the process server threatened me that he would return the notice with the remark that the assessee refuses to take the notice though he is present. I had therefore to take the notice."
The mere fact that Asaram had acted on some occasions in this way would not constitute him an agent on whom a notice or requisition under the Act could be validly served, nor would any statement made by him bind the assessee, and we see no reason why a notice informing the assessee of the adjourned date should be deemed to be validly served when it was merely served on Asaram. The decision in Jangai Bhagat Ramawtar v. Commissioner of Income Tax Bihar and Orissa, to which reference has been made, does not help the Commissioner of Income Tax because the assessee in that case contended that he had to be served personally and it was held that service on a gomastha, who was his accredited agent, was valid service; it is not clear whether the gomastha was a recognized agent or had been authorized in writing to accept service, and there is no discussion of this point.
The Commissioner of Income Tax has stated that he does not believe the affidavits stating that the contents of the notice were not communicated by Asaram to Kisanlal; but even if these affidavits be disbelieved, a point which has not been considered by the Income Tax Officer and Assistant Commissioner, there is no evidence to show that the notice did in effect reach Kisanlal. We do not think it unreasonable to insist that Income Tax Officers, in doing the very important work of assessing income tax, must take the elementary precaution of seeing that the person with whom they are dealing is in fact authorized to represent the assessee, and they are not entitled to assume this merely because such person has on occasions signed a notice, possible under pressure, or produced account books for inspection. Our answers on the points referred to us are :- (1) and (2) : The service of the notice on Asaram was not a valid service on the assessee. (3) : The assessee had not a reasonable opportunity to comply with the notice. The assessees petition must therefore be allowed with costs. Counsels fee Rs. 50.
Petition allowed.