1957 (2) TMI 93 - HC - Income Tax

Summary

Issues Involved:
1. Presumption of due service of a registered letter returned with an endorsement of refusal.
2. Validity of Tribunal's order dismissing the appeal for default without hearing the appellant.
3. Jurisdiction of the High Court to consider subsequent events and documents not included in the Tribunal's statement of the case.

Detailed Analysis:

1. Presumption of Due Service of a Registered Letter Returned with an Endorsement of Refusal:
The primary issue is whether a presumption arises of due service when a registered letter is returned by the post office with an endorsement of refusal. The court examined Section 27 of the General Clauses Act, which states that service by post is deemed to be effected by properly addressing, pre-paying, and posting a registered letter, unless the contrary is proved. The court also considered Section 63 of the Indian Income-tax Act, which allows service by post.

The court referred to Section 16 and Section 114 of the Evidence Act, which permit the presumption that the common course of business has been followed, especially in public offices like the post office. The court concluded that the presumption of service applies even when the letter is returned with an endorsement of refusal by the postal peon, as this falls within the "common course of business."

Citing various precedents, the court held that the endorsement "refused" by the postman creates a presumption that the letter was tendered and refused by the addressee. This presumption is rebuttable but stands unless contrary evidence is provided. Therefore, the court answered the first question in the affirmative, establishing that a presumption of due service arises in such cases.

2. Validity of Tribunal's Order Dismissing the Appeal for Default:
The second issue, contingent on a negative answer to the first, addressed whether the Tribunal's order dismissing the appeal for default was null due to lack of opportunity for the appellant to be heard. Given the affirmative answer to the first question, the second issue did not arise for consideration.

3. Jurisdiction of the High Court to Consider Subsequent Events:
The court discussed the jurisdictional limits under Section 66 of the Income-tax Act, emphasizing that the High Court's advisory jurisdiction is confined to questions referred by the Appellate Tribunal. The court cannot consider subsequent events or documents not included in the Tribunal's statement of the case, as these do not arise out of the Tribunal's order under Section 33(4) of the Act.

The court cited Commissioner of Income-tax, Madras v. Mtt. Ar. S. Ar. Arunachalam Chettiar, which held that the High Court's jurisdiction under Section 66(1) and (2) is conditional on there being an order under Section 33(4) and a question of law arising out of such an order. The court reiterated that it could not raise or determine any new questions not referred by the Tribunal.

Conclusion:
The court answered the first question affirmatively, establishing that a presumption of due service arises when a registered letter is returned with an endorsement of refusal. The second question did not arise due to the affirmative answer to the first. The court also clarified its jurisdictional limits, stating that it could not consider subsequent events or documents not included in the Tribunal's statement of the case. The application for including references to subsequent events was dismissed, and no order was made as to costs.