1967 (3) TMI 5 - SC - Income Tax

Whether the notice u/s. 34 of the IT Act was properly served on the assessee within the prescribed period - The notice was properly served under Or. V r. 20(1) of the CPC and as the ITO was not a Court it was not incumbent on him to affix a copy of the notice on the notice board of the income-tax office - appeal of department is allowed

Summary

Issues:
1. Proper service of notice under section 34 of the Income-tax Act.
2. Interpretation of Order V, rule 20(1) of the Code of Civil Procedure.

Analysis:

Issue 1: Proper service of notice under section 34 of the Income-tax Act

The case involved a dispute regarding the service of a notice under section 34 of the Income-tax Act to the assessee, a Hindu undivided family, for the year of assessment 1945-46. The Income-tax Officer initially attempted to serve the notice in person but was unsuccessful due to the absence of the assessee's karta. Subsequently, the notice was sent via registered post and also affixed at the address of the assessee. The Appellate Assistant-Commissioner found the substituted service invalid as a copy of the notice was not posted on the office room wall. However, the Appellate Tribunal ruled that the notice was properly served under Order V, rule 20(1) of the Code of Civil Procedure, and upheld the service. The High Court, following a previous decision, held the substituted service invalid, leading to the appeal to the Supreme Court.

Issue 2: Interpretation of Order V, rule 20(1) of the Code of Civil Procedure

The crux of the matter revolved around the interpretation of Order V, rule 20(1) of the Code of Civil Procedure concerning the service of summons. The counsel for the revenue argued that the discretion provided in the rule allowed for various methods of service, not limited to affixing copies at specific locations. The Supreme Court agreed with this interpretation, emphasizing that the rule confers discretion on the court to adopt any suitable manner of service ensuring notice to the party being served. The court highlighted the importance of expeditious and effective service, stating that unnecessary steps should be avoided. The court also distinguished previous cases cited by the High Court, asserting that the discretion given to the court aims to facilitate efficient service, even through methods like registered post if deemed appropriate.

In conclusion, the Supreme Court allowed the appeal, set aside the High Court's judgment, and ruled in favor of the revenue, affirming that the notice under section 34 of the Income-tax Act was properly served. The court's decision was based on the interpretation of Order V, rule 20(1) of the Code of Civil Procedure, emphasizing the discretion granted to the court for efficient service of notices.