Jharkhand High Court
Milan Poddar vs Commissioner Of Income Tax & on 18 July, 2012
Equivalent citations: 2012 (4) AIR JHAR R 346, (2013) 357 ITR 619 (2013) 2 JCR 107 (JHA), (2013) 2 JCR 107 (JHA)
Author: Prakash Tatia
Bench: Chief Justice, Jaya Roy
IN THE HIGH COURT OF JHARKHAND AT RANCHI
T.A. No. 59 of 2010
Milan Poddar ... ... Appellant
Vrs.
Commissioner of Income Tax, Central Revenue
Building, Main Road, Ranchi & Another ... ... Respondents
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CORAM: HON'BLE THE CHIEF JUSTICE
HON'BLE MRS. JUSTICE JAYA ROY
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For the Appellant: Mr. S.B. Gadodia, Sr. Advocate
Mr. Sandeep Gadodia, Advocate
Mr. Sumeet Gadodia, Advocate
For the Respondents: Mr. Deepak Roshan, Sr. S.C.(I.T.)
Ms. Rupa Kumari, Advocate
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Reportable Dated 18th July, 2012.
Heard learned counsel for the parties.
2. The appellant-assessee submitted his returns of income on 20.03.2007
declaring total income of Rs.2,51,600/- for the period 2006-07 and the said
returns was processed under Section 143(1) of the Income Tax Act, 1961( for
short- Act of 1961). The appellant's case was selected for scrutiny and on
24/25.10-2007, a notice under Section 143(2) of the Act of 1961 was issued to the appellant-assessee. The said notice was issued by "Speed-Post" on 24/25.10.2007 vide receipt no. 4544 and Speed Post No. EE875408254 IN dated 25.10.2007 fixing the date for compliance on 30.11.2007. On fixed dated, i.e.; on 30.11.2007, no body appeared on behalf of the appellant-assessee and this fact was taken note in the order sheet dated 30.11.2007 by the Assessing Officer. Then, on 04.04.2008, it was ordered that notice under Section 142(1) of the Act of 1961 be issued but that order was not complied with. Then, it was again directed to issue notice on 08.08.2008. In response to that notice under Section 142 (1), one person appeared and filed photocopy of office copy of returns of Assessment Year 2006-07, computation of Income, P & L Account and Balance Sheet. However, as per the Assessing Officer, when he was asked to mark his attendance, he refused to mark his attendance. On 13.8.2008, the assessee's representative filed reply to notice under Section 142(1), dated 16/25.07.2008 and in reply, it has been stated that notice under Section 143 (2) was not served within statutory period and therefore, the case under Section 143(3) may be dropped. After considering this objection, the Assessing Officer held that notice was duly served and proceeded to compute the income and passed the assessment order on 17.12.2008 assessing the total income of assessee to the tune of Rs.19,92,440/- and ordered for initiation of penalty proceedings under Sections 271[1] [b] & 271 [1] [c] of the Act of 1961.
3. Against the assessment order dated 17.12.2008, the assessee preferred an appeal before the C.I.T.(Appeals), Ranchi, who vide order dated 4.06.2009 allowed the appeal of the assessee only on the ground that notice under Section 143(2) of the Act of 1961 was not served within the stipulated period of 12 months from the expiry of the end of the month in which the returns was furnished. The C.I.T.(Appeal) in view of this decision, on question of law in favour of assessee, did not choose to decide other issues raised by the assessee with respect to the addition made by the Assessing Officer. Against this decision of the C.I.T.(Appeal) dated 04.6.2009, the Revenue preferred an appeal only on one ground obviously, for the reason that the C.I.T.(Appeal) allowed the appeal of the assessee only on one issue and that issue was relating to the mandatory service of notice under Section 143(2) of the Act of 1961. The following ground was raised in the appeal:
"Whether on the facts and in the circumstances of the ace, the ld. CIT (A) was justified in canceling the assessment under Section 144 of the Income Tax Act, 1961 on the ground that notice under Section 143(2) was not properly served well in time."
4. The Income Tax Appellate Tribunal, Circuit Bench, Ranchi by a detailed order held that notice under Section 143(2) was duly served upon the assessee and finding recorded by the C.I.T.(Appeal) was reversed. However, in spite of the fact of reversal of the finding on preliminary issue challenging the jurisdiction of the Assessing Officer, the learned Tribunal itself did not choose to remand the matter to the C.I.T.(Appeal) for deciding the other points raised by the assessee and observed that since the assessee did not prefer any cross objection or appeal before the Tribunal, the matter cannot be remanded to the C.I.T.(Appeal). However, the C.I.T.(Appeal) observed that the assessee may, if he is so advised, approach the learned C.I.T.(Appeal) seeking adjudication on the other grounds of appeal, which were specifically taken before C.I.T.(Appeal) but not decided by C.I.T.(Appeal). In this fact situation, this appeal has been preferred by the assessee and admitted for hearing on following substantial questions of law:-
(a) Whether the Tribunal was right in arriving at the conclusion that the notice under Section 143(2) of the Income Tax Act deemed to have been served upon the assessee in spite of the fact that no postal receipt of sending the notice by speed post was before the Assessing Officer and the Income Tax Appellate Tribunal?
(b) Whether the Income Tax Appellate Tribunal was right in rejecting the contention of the petitioner on merits about the correctness of addition made by the A.O. only on the ground that since C.I.T.(Appeal) set aside the assessment order on the ground of jurisdiction and, therefore, without filing any cross-
objection or appeal in the matter where the order passed by the C.I.T. (Appeal) was in favour of the assessee, the Tribunal has no jurisdiction to address the issue about the correctness of addition made by the A.O.?
5. The first question, according to learned counsel for the appellant, is a question of jurisdiction of the Assessing Officer, as notice was not served within the stipulated period as provided under Section 143(2) (ii) of the Act of 1961 and it is settled law that unless a notice is served upon the assessee within a period of 12 months (as the limitation prescribed at the relevant time), the Assessing Officer cannot proceed to make an assessment order. According to learned counsel for the appellant, the C.I.T.(Appeal) gave cogent reasons and held that there was no valid service of notice under Section 143 (2) of the Act of 1961 whereas the Tribunal ignored the relevant provisions of law and particularly, Section 292 BB of the Act of 1961, which provides that in a case where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and in that situation the assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was not served upon him or not served upon him in time or it was served upon him in an improper manner. According to learned counsel for the assessee, revenue cannot take help of this provision in view of the fact that, in the same Section it has been provided that such deeming provision will not apply, if the assessee raised the objection of service before making amendment order by Assessing Officer. Here in this case, the appellant-assessee came to know about the proceedings taken by the Assessing officer before completion of the assessment and submitted an objection clearly stating that notice under Section 143 (2) of the Act of 1961 was not served upon the assessee. The provision clearly says that upon furnishing such objection by the assessee, deeming clause will not come into operation so as to declare the service to be valid.
6. Learned counsel for the appellant drew our attention to the order-sheet wherein the Assessing Officer has taken note of the objection of the assessee in the order sheet dated 10.9.2008. It is submitted that finding substance in the objection of the assessee, the Assessing Officer issued notice to the Post- Master of the area concerned i.e.; G.P.O., Doranda, from where notice under section 143(2) alleged to has been sent through Speed-post. Not only this but a letter under Section 133 (6) of the Act of 1961 was also served upon Post- Master, G.P.O., Doranda. The Post-Master gave reply to the notice and submitted that the request of the Income Tax Department is time barred as the record of the 'Speed-post' is not kept after expiry of three months. According to learned counsel for the appellant, in view of the above facts, it is clear that the presumption under Section 292 BB of the Act of 1961, cannot be taken and there was no material available on the record to prove that the notice was served upon assessee at all, what to say of in time.
7. Learned counsel for the appellant submitted that in view of the specific provision in the Act of 1961 itself, no help could be taken for the purpose of finding out how the service will be effected in the notice under the provision of the Act of 1961, whereas the Tribunal committed serious error of law in interpreting the law with the help of the provisions of General Clauses Act, 1897. It is also submitted that in General Clauses Act also, there is a reference of "Registered Post Service". It is submitted that in this case, the post was not sent by 'Registered post" but was sent by 'Speed-post", therefore, that service is not the service by "Registered post". It is also submitted that once the help of the presumption of Section 292 BB was taken, it was for the Income Tax Department to prove the service of the notice and the said Department miserably failed to prove the service of notice.
8. Learned counsel for the Revenue tried to justify the reasons given in the impugned order of the Tribunal whereby it has been held that service of the notice upon assessee was valid.
9. We have considered the submissions of the parties on this issue. It will be relevant to mention here that as per Section 282 of the Act of 1961, notice can be served either by post or in the manner in which the summons are issued by the Courts under the provisions of Code of Civil Procedure. Therefore, if the argument of the learned counsel for the appellant, that Income Tax Act of 1961 is special Act and it contains the provisions for service of notice, according to which only a notice can be served upon assessee; then in that view of the matter, the only recourse is that notice should be issued either by post or it may be served as is served under the provisions of Code of Civil Procedure. In this case, a notice under Section 143 (2) of the Act of 1961 was alleged to has been sent by post, which includes sending notice by Ordinary Post, Post under Certificate, Registered Post, Registered A/D or by Speed Post and this fact is not in dispute that notice was sent by "Speed Post" and, therefore, notice was in accordance with law under Section 282 (1) of the Act of 1961.
10. Section 292 BB of the Act of 1961 is a deeming Clause, which is quoted as under:
"[292BB.Notice deemed to be valid in certain
circumstances- Where an assessee has appeared in any
proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was-
(a) not served upon him; or
(b) not served upon him in time; or
(c) served upon him in an improper manner:
Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.] A bare perusal of Section 292 BB of the Act of 1961 reveals that it applies to the case where the assessee has appeared in a proceeding and cooperated in any inquiry relating to an assessment or reassessment. In that situation, it has been declared that such conduct of the assessee shall deem that no notice under the provisions of the Act of 1961 has been duly served upon the assessee as well as it was served within time. Therefore, in this Section even if no notice was issued and was not served upon the assessee but he voluntarily by any reason, appeared in assessment or reassessment proceeding, he is precluded from taking objection with respect to the service in time. Here in this case, the authorities below have not relied upon this conduct of the assessee of merely taking part in assessment proceedings or reassessment proceedings, but specifically has set-up a case that notice was issued to the assessee by post and i.e.; through "Speed-post" and, therefore, all the three Authorities below proceeded to decide whether it is a valid service of the notice in fact or not ? Therefore, it is a question of fact which was under consideration of all the three Authorities below.
11. Be that as it may, according to learned counsel for the appellant, by virtue of the provisions of Section 292 BB, the service cannot be treated to be valid service as there is no benefit of the presumption in favour of the Income Tax Department. In the facts of the case, we are of the considered opinion that the Revenue rightly did not rely upon any presumption under Section 292BB of the Act because the assessee raised objection before the completion of the assessment in the present case.
12. The next question arose is whether in the facts of the case, the Tribunal has committed error of law in holding that the service was valid?, which is the question number 1 framed in this appeal.
13. Though, prima-facie, above is question of fact but learned counsel submitted that it is a case of wrong drawing of presumption from the undisputed fact, therefore, this is a question of law. Since there is no presumption available in favour of the Department, we have to see evidence available on record with respect to the issuance of notice upon assessee.
14. From a bare perusal of the order-sheets, shown to us by the assessee, started from dated 24.10.2007, it is clear that in the order-sheet dated 24.10.2007, on the top of it, the name and address of the assessee was mentioned and thereafter it was ordered that notice under Section 143 (2) be sent. The notice, in fact, was sent on 24/25.10.2007 and its receipt number is given in the order of the Assessing officer which is, receipt no. 4544 and "Speed post" number is also given which is EE875408254 IN, dated 25.10.2007. So far as dispatch of the notice under Section 143 (2) of the Act of 1961 is concerned, that question is fully proved.
15. Learned counsel for the appellant vehemently submitted that mere proof of dispatch of post is not the proof of service of the notice upon the receiver.
16. In a matter of service through post, there are certain ways whereby notices are sent through department of post. In this case, as we have already discussed that in the order sheet, name and address of the assessee was mentioned and address is wrong was not the plea of the assessee. Therefore, Department sent the notice under Section 143 (2) of the Act to the Assessee on the assessee's address, and that too through Speed Post which is more reliable mode therefore, it is required to be presumed that notice was delivered to the addressee.
The notice sent through "Speed-post" did not return to the Income Tax Department as undelivered and since Income Tax Department sought information from the Postal Department with respect to the actual service of the post upon the assessee after the expiry of a period of three months and by that time, the record was weeded out, the only evidence, which could have been produced by the Department, is the proof of the dispatch of the notice and not of not-receiving the said post bade by the Department. Against this evidence of Department, there is only word of mouth of the assessee that he did not receive the notice under Section 143 (2) of the Act. In that fact situation, the Assessing Officer as well as the Tribunal were fully justified in accepting the contention of the Income Tax Department that notice was duly sent and since it was not returned back as undelivered, it was deemed to have been delivered to the assessee.
17. So far as dispute with respect to the interpretation of the "Post", "Registered Post" and "Speed Post" are concerned, the Tribunal has considered the issue in detail. We would like to quote the relevant paragraphs from the order of the Tribunal, which are as under :-
11. Section 27 of the General Clauses Act: Section 27 of the General Clauses Act, 1897, worded on the lines of section 26 of the Interpretation Act, 1889 (UK), deals with the "Meaning of service by post"
and says that where arty Central Act or Regulation authorizes or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered Post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. It is evident on bare perusal of section 27 of the General Clauses Act that it creates a legal fiction by which the service of a document is deemed to be effected once the said document is properly addressed, prepaid and poster by registered post. The said legal fiction can be displaced only by proving the contrary. The aforesaid legal fiction follows automaticaly on the fulfillment of the conditions precedent for attracting the legal fiction. It is not the case of the assessee that the envelope containing the said notice was not properly addressed or prepaid.
According to the assessee, the only ingredient of section 27 which is not satisfied is that the impugned notice was sent by "speed post" and therefore section 27 of the General Clauses Act would not apply as it applies to notices sent by "registered post" alone. The issue that arises for consideration is therefore whether notice by registered post includes notice by speed post also within the meaning of section 27 of the General Clauses Act. It may be noted that section 27 does not require the mail to be sent by "registered post together with acknowledgment due (AD)" and hence "AD" cannot be read as a requirement for the applicability of section 27. What is required by section 27 is posting of document by "registered post."
12. As Lord Steyn said, in law, context is everything. In Mayawati v. CIT, (2009) 222 CTR 117 (Delhi), the context in which section 27, General Clauses Act has been enacted has been explained thus: "Wherever service of a notice is essential or critical, experience shows that it is a most difficult task to achieve. It is for this reason that section 27 of the General Clauses Act creates a statutory presumptioll to the effect that if a letter is properly addressed, it must be deemed to have been served." It is to overcome the insurmountable task of proving service of notice in such difficult situations that section 27 has been enacted to provide for statutory presumption of service in a case where the notice is sent by registered post as the notice sent by registered post would in all probability be delivered to the addressee". The context in which the term "registered post" has been used in section 27 can best be ascertained by reference to the object it seeks to achieve, i.e., to ensure safe delivery of the mail and nothing else. What has therefore to be seen is whether the context in which the term "registered post" has been used in section 27 would also include notice by "speed post".
13. Meaning of "Registered Post": The term "registered post" has not been statutorily defined. We have therefore to turn to its ordinary meaning. In common parlance, "registered" means recorded as in a register or book while "post" means an established system for collection and delivery of mail. The term "registered post" as used in section 27 of the General Clauses Act, 1897 has a generic meaning, would therefore embrace within itself the entire class of posts/mails under an established system in which their receipt and delivery are recorded with a view to assure safe delivery. The term "registered" in the context of post/mail has been defined at page 2528 of the Second Volume of "The New Shorter Oxford English Dictionary" (edited by Lesley Brown) (1993 Ed.) published by Clarendon Press, Oxford, as follows:
"the term "registered" means "Recorded, officially set downn, entered in a register, spec. (of a postal item) recorded at the point of dispatch. And indemnified against loss or damage." At page 964 of Black's Law Dictionary (Seventh Ed.), "registered mail" is defined as the "Mail that the US PostalService records at the time of mailing and at each point on its route so as to guarantee safe delivery." Thus, it can safely be concluded that "registered post" is the mail that is registered by the post/mail office when sent in order to assure safe delivery.
14. It is well established that it is the substance that gives meaning to a word or phrase. A phrase or word without substance would be meaningless. Let us therefore have a look at the substance in the term "registered post". There are two principal attributes of registered post: one, there is established system in which receipt of the mail is recorded; and two, movement of such mail as also its delivery is recorded. If the aforesaid attributes of registered post are present in any other class of mail or post forming part of an established system, that mail or post would, in substance, be registered post notwithstanding the nameby which it may be called. "Speed post' is a part of established system of delivery in which the receipt of mail as also its movement and delivery are recorded. "Speed Post" has all the principal attributes of "registered post". Like "registered post", receipt of mail by "speed post" is also recorded, its movement as also delivery is tracked, and the loss on account of delay in delivery or damage to or loss of article is indemnified. The major differences between "registered post" and "speed post are that while "speed post" is delivered with speed, delivery of registered post takes much longer time and secondly while the facility of "registered post" is availableat all places and thus has wider reach, the facility of "speed post"
does not have such a wider reach in this country. It is in view of the inherent advantages of assured and quick delivery of mail through speed post that the Government Departments, Courts, corporate enterprises and people in general prefer to send their mails/articles by speed post and courier services because they, apart from having all the major advantages of registered post, have also the advantage of quick delivery. Since all principal attributes of "registered post" are inherently present in "speed post", both of them, in substance, belong to the same genus. We therefore hold that the term "registered post" in section 27 of the General Clauses Act, 1897 takes within its sweep "speed post". In this view of the matter, notice by registe'red post wouId also cover the notice sent by speed post by the AO.
15. Principle of updating construction: It is however contended that that notice by speed post is not specifically included in section 27 of the General Clauses Act and hence the meaning of "registered post" as used therein cannot be extended to cover speed post. We have carefully considered the aforesaid submission. GencralClauses Act was enacted in 1897 when speed post and courier services as they are available now were unknown at that time in this country. There was no established system of sending the mails by speed post at that time. All these methods of communication have come into vogue in this country in recent times. Age of the text is crucial to the interpretive process. The relevant issue therefore is whether the term "registered post" as used in section 27 of the said Act should be updated by adopting ambulatory approach so as to reflect changed conditions and human progress.
16. In 1793, Immanuel Kant, wellknown German philosopher, demanded that even permanently unalterable laws should not be allowed to hold back progress. It is to take care of such situations that section 6 of the Interpretation 1999 of New Zealand specifically provides thus: "Enactments apply to circurrostarIces as they arise." Thus the ambulatory approach as a tool in interpreting elderly legislations is well recognized. Legislation normally continues in force until amended or repealed, regardless of changes in social, technological or other conditions. Over time, the meaning that it bore in the context in which it was enacted may come to produce anachronistic results, or fail to fulfill its purposes, Parliament has a clear mandate to update legislation but systematic legislative updating has proved impossible because of its institutional limitations and the sheer number of statutes. Therefore, the courts have assumed an ambulatory role, updating statutes to reflect changed conditions. Unforeseen innovations and developments, such as developments in technology, or novel social or commercial practice, would need to be accommodated within existing legislation if its text and purpose allow.
17. As stated earlier, age of the text is crucial to the interpretative process. While a newly created legal text needs to be interpreted according to the intent of its author but as time passes the same text may warrant interpretation according to the intention of the system within the the language of those texts. The reason behind using the phrase "registered post"
in section 27 of the General Clauses Act was not to cover each and every type of mail but to cover only those types of mails the receipt and delivery of which were recorded to assure their safe delivery. Thus, the term "registered post" as used at that time referred to that class of mail in which receipt of mail and its movement was recorded to assure safe delivery. This was necessary to ensure that the presumption of law created by section 27 of the General Clauses Act was available in genuine cases, i.e., in cases where there was reasonable certainty that the mail would be delivered by recording its receipt, movement and delivery. At the time when General Clauses Act was enacted, the aforesaid purpose could be achieved only though "registered post" and hence the term "registered post" was used in section 27 thereof. The object behind using the phrase "registered post" in section 27 was simply to ensure safe delivery so that the statutory presumption created thereunder was consistent with the ground reality, i.e., a document sent by registered post would be received by the addressee. It is that objective purpose which needs to be taken into account while interpreting the phrase "registered post". The same objective purpose, which was sought to be realized through "registered post" at the time when the General Clauses Act was enacted in 1897, is equally, rather more effectively, realized now when the mails are sent through speed post or courier services. What was possible at that time to achieve through "registered post" is now possible to achieve as a result of changes taking place over time through "speed post" and "courier services".
18. In Victor Chandler International Ltd. v. Customs and Excise Commissionerr;(2000) 1 WLR 1297, the question in the context of section 9(1) (b) of the Beeting and Gaming Duties Act, 1981 (UK) was whether advertising by teletext was covered by the prohibition on advertising by offshore bookmakers. Adopting the ambulatory approach, it was held that the information sent from computers to teletext screens was a 'document' despite the fact that teletext had been introduced subsequently to the enactment of the legislation. It was further held that its regulation fell within the purposes of the Act, and the word 'document' was capable of covering such projections. The aforesaid decision has been cited with approval by the Hon'ble Supreme Court in Union of India v. Naveen Jindal, 2004 (2) SCC 510; AIR 2004 SC 1559 as under:
"In Victor Chandler International vs. Customs and Excise Commissioners arid another [(2000) 2 All ER 315 at p. 322], it was stated:
"27. There are, of course, some gaps in legislation that cannot be filled by judge made law. But it is now a well known rule of statutory construction that an 'ongoing' statutory provision should be treated as 'always speaking'. The principle is set out in Bennion Statutory Interpretation (3rd edn, 1997), p.686:
(2) It is presumed that Parliament intends the court apply to an ongoing Act a construction that continuously updates its wording to allow for changes since, the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking (3) A fixed time Act is intended to be applied in the same way whatever changes might occur after its passing. Updating construction 'is not therefore applied to it.
28. These principles received the endorsement of the Court of Appppeal in, R. v. Westminster City Council, ex p A(1997) 9 Admin LR 504 at 509, where Lord Woolf MR described the National Assistance Act 1948 as "a prime example of an Act which is "always speaking" and so should be construed" on a construction, that continuously updates its wording to allow for changes since the Act was initially framed".
19. In M/s SIL Import, USA v. M/s Exim Aides Silk Exporters, AIR 1999 SC 161213, it was contended in the context of section 138 of the Negotiable Instruments Act that notice by fax was not valid. Rejecting the aforesaid contention, the Hon'ble Supreme Court has held as under:
"Francis Bennion in Statutory Interpretation has stressed the need to interpret a statute by giving allowances for any relevant changes that occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters.
For the need to update legislations, the Courts have the duty to use interpretative process to the fullest extent permissible by the enactment. The following passage at page 167 of the above book has been quoted with approval by a three JudgeBench of this Court in State vs. S.J. Chaudhary (1996 2 SCC 428):
"It is presumed that Parliament intends the court to apply to on ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed inccordance with the need to treat it as current law.
So if the notice envisaged in clause (b) of the proviso to Section 138 was transmitted by fax it would be compliance with the legal requirement."
20. At page 102 of "Maxwell on The Interpretation of Statutes" (Twelfth Ed,. by P. St. J. Langan), it is stated that the "language of the statute is generraicy extended to new things which were not known and could not have been contemplated when the Act was passed, when the Act deals with a genus and the thing which afterwards comes into existence was a species of it." Thus, where an Act of 1790 (which was deemed to be a public Act) exempted ferry proprietors from assessment to any "tax .... whatsoever" in respect of the ferry, it was held in Pole Carew v. Craddock (1920) 3 KB 109 that the exemption extended to incometax even though that tax was first imposed after 1790: extracted from the said page of Maxwell on The Interpretation of Statutes.
21. In view of the aforesaid principles, the phrase "registered post"
appearing in section 27 of the General Clauses Act needs to be construed on a construction that continuously updates its sweep to allow for changes after the said Act: was passed. It has been observed at page 99 of "Maxell on The Interpretation of Statues" (supra) that "Provisions regarding the giving of notice often receive a liberal interpretation." The aforesaid observations have been cited, with approval, by the Hon'ble Supreme Court in V Raja Kumari v. P Subbarama Naidu, AIR 2005 SC 109. We therefore hold that the phrase "registered post" in the said section 27 would take within its sweep not only "speed post" but also all other mails forming part of established system of mails in which their receipt and movement are recorded to assure their safe delivery. So if a notice envisaged in section 143(2) of the Income tax Act or for that matter in any other section is posted well in time by "Speed post", it would be sufficient compliance with the legal requirement of sending it by "registered post" and its service would be deemed to be effected at the time at which the letter would be delivered in the ordinary course of post.
22. Statutory presumption of service u/s 27: We shall now deal with the observation of the learned CIT(A) that receipt signifying dispatch of mail by post is no indication of service in the absence of acknowledgement of notice by the assessee. We are unable to endorse the aforesaid view for the reason that section 27 of the General Clauses Act creates a legal fiction by which the service of a document is deemed to be effected once the said document is posted after properly addressing and prepaying by registered post irrespective of whether any acknowledgement due is received from the addressee or not. For raising the statutory presumption of service u/s 27, what is relevant is whether the notice sought to be served, was sent after properly addressing and prepaying by registered post or speed post to the addressee irrespective of whether the receipt of notice was acknowledged by the sendee or not. In this connection, we may fruitfully refer to a few judgments of the Hon'ble Supreme Court.
23. In Har Charan Singh v. Shiv Rani, AIR 1981 SC 1284, the Hon'ble Supreme Court has observed as under:
"Sec. 27 of the General Clauses Act, 1897 deals with the topic 'Meaning of service by post' and says that where any Central Act or regulation authorizes or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The section thus raises a presumption of due service or proper servrice if the document sought to be served is sent by properly addressing, prepaying and posting by registered post to the addressee and Such presumption is raised irrespective of whether any acknowledgement due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected it means the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without anything more. Similar presumption is raised under Illustration (f) to s. 114 of the Indian Evidence Act whereunder it is stated that the Court may presurne that the, common course of business has been followed in a particular case, that is to say, when a letter is sent by post by prepaying and properly addressing it the same has been received by the addressee. Undoubtedly the presumptions both under s. 27 of the General Clauses Act as well as under section 114 of the Evidence Act are rebuttable but in the absence of proof to the contrary the presumption of proper service or effective service on the addressee would arise.
24. In D Vinod Shivappa v. Nanda Beliappa, AIR 2006 SC 2179, the Supreme Court has held as under:
"If a notice is issued and served upon the drawer of the cheque, no controversy arises. Similarly if the notice is refused by the addressee, it may be presumed to have been served. This is also not disputed. This leaves us with the third situation where the notice could not be served on the addressee for one or the other reason, such as his non availability at the time of delivery, or premises remaining locked on account of his having gone elsewhere etc. etc. If in each such case the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act."
25. In C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555, a bench of three Judges of the Hon'ble Supreme Court, in the context of service of notice section 138 of the Negotiable Instruments Act, has observed thus,:
"14. Sec. 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This court has already held that when a notice is sent by registered post and is returned with a postal endorsement 'refused' or `not available in the house' or 'house locked' or 'shop closed' or "addressee not in station', due service has to be presumed. {Vide Jagdish Singh vs. Natthu Singh (1992) I SCC 647; Slate of MP. vs. Hiralal (1996) 7 SCC 523 and V. Raja Kumari vs. P. Subbarama Naidu (2004) 8 SCC 774]. It is, therefore, manifest that in view of the presumption available under s. 27 of the Act, it is not necessary to aver in the complaint under s. 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved."
26. The aforesaid judgments lay down in no uncertain terms that, in terms of section 27 of the General Clauses Act, unless and until the contrary is proved by the. addressee, service of notice is deemed to be effected at the time at which the letter would have been delivered in the ordinary course of business when it is sent to the addressee at his address by registered post. Details given in the assessment order as also receipt of speed post make it clear that all the conditions stipulated by secction 27 of the General Clauses Act are satisfied and hence service of the impugned notice would be deemed to have been effected well before the expiry of time limit stipulated by section 143(2) as the said notice was sent several months before the expiry of period stipulated by the time provision of section 143(2).
27. Nonrebuttal of Statutory Presumption: The legal fiction created by section 27 of the General Clauses Act by which service is deemed to have been effected would continue to be operative unless the party denying the service proves that it was not really served and that he was not responsible for such the absence of proof by the party denying the service that he has not received it or that he was not responsible for its nonservice, the legal fiction created by section 217 of the General Clauses Act cannot be displaced. In V Raja Kumari v. P Subbararna Naidu, AIR 2005 SC 109, the Hon'ble Suprme Court has, in the context of section 138 of the Negotiable Instruments Act, held as under:
"No doubt Section 138 of the Act does not require that the notice should be given only by "post". Nonetheless the principle incorporated in Section (quoted above) can profitably be imported in a case where the sender has dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it was not really served and that he was not responsible for such nonservice. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategyof subterfuge by successfully avoiding the notice."
28. In the case before us, the assessee has led no evidence to prove that the impugned notice was not received by him or that he was not responsible for its nonservice. The details given by the AO in the assessment order included not only the receipt no. under which speed post was sent but also the tracking code. Perusal of the assessment order shows that the AO had apprised the assessee of the afooresaid facts in the course of assessment proceedings also. It was therefore for the assessee to adduce relevant evidence to prove that the said notice was not served upon him and also that he was not responsible for its nonservice. However, the assessee has not adduced any evidence to prove so in spite of the fact that he could have done so with the help of details made available in the assessment order and also in the notice issued to him in the course of the assessment proceedings. Additionally, the AO has verified his records and found that the impugned notice was not received back in his office. In this view of the matter, the legal fiction by which the service of the impugned notice is deemed to be effected on the assessee stands on a much stronger footing.
We are in full agreement with the reasons given by the Tribunal with respect to the interpretation given by the Tribunal on various issues decided by the Tribunal which we have quoted above.
18. In view of the reasons discussed above, we are of the considered opinion that the notice under Section 282 the Act of 1961, can be sent by post including "Ordinary post","Registered post" as well as "Speed-post". The post is a generic word and its species are "Ordinary post","Registered post", "Speed-post" and "Under Certificate of Posting" etc. Learned Tribunal rightly relied upon page 102 of "Maxwell on The Interpretation of Statutes" (Twelfts Ed. By P.St. J. Langan), wherein it has been stated that the "language of the statute is generally extended to new things which were not known and could not have been contemplated when the Act was passed, when the Act deals with a genus and the thing which afterwards comes into existence was a species of it." The Speed Post is a new mode of sending post, and therefore, this new postal mode if is not mentioned in Statute specifically, even then because of above reason that service by Speed Post is included in generic word "Post" or "Registered Post".
19. In view of absence of any rebuttal, we do not find any reason to hold that notice under Section 143 (2) of the Act of 1961 was not served upon the assessee in time.
Issue No.1 is, therefore, answered that the Tribunal was right in arriving at a conclusion that notice under Section 143 (2) of the Act of 1961 was validly served upon the assessee.
20. So far as Issue no.2 is concerned, we are of the considered opinion that it is settled law that when any authority decides the matter on preliminary issue and if finding on that preliminary issue is reversed, then normally, the matter is required to be remanded for deciding the remaining issues, if the remanding authority/Court itself is not deciding the other issues.
21. We will take help of the Order XLI Rule 23 of Code of Civil Procedure, which clearly provides that where the Court from whose decree an appeal is preferred, has disposed of the suit upon a preliminary point and the decree is reversed in appeal, the Appellate Court may, if it thinks fit, by order remand the case, and may further direct what issues shall be tried in the case so remanded. Otherwise also, when appeal was preferred by the Revenue only on one question of law which was decided against the Revenue and upon reversal of the findings of the Appellate Authority by the Tribunal, the appellant-assessee automatically gets right to agitate the matter before the first Appellate Authority on all the issues which were not considered and decided by the first Appellate Authority. Therefore,Issue No.2 is decided in favour of the assessee and the order of the Tribunal is modified and now the matter is remanded to the C.I.T. (Appeal), Circuit Bench, Ranchi for deciding all the issues raised by the appellant-assessee in the appeal.
This appeal is partly allowed accordingly.
22. The parties shall appear before the Appellate Authority on 01.08.2012. The Appellate Authority is expected to decide the appeal expeditiously.
(Prakash Tatia,C.J.) (Jaya Roy, J.) Sudhir