P.L. Kanojia, Accountant Member -
(1.) THESE three appeals have been filed by the assessee against the common order of the AAC relating to the assessment years 1967-68 to 1969-70 wherein it was held that the three appeals filed by the assessee were barred by limitation and hence were dismissed in limine.
(2.) The relevant facts are that the ITO completed the assessments for the assessment years 1967-68 and 1968-69 on 22-2-1973 under Section 144 of the Income-tax Act, 1961 ('the Act'), and the assessment for the assessment year 1969-70 was completed on 30-12-1972 also under Section 144. The notices of demand and challan, etc., for each of the assessment years mentioned above were sent by the ITO by means of registered post AD. All the letters were received back with the remarks of the postal authorities as 'refused to accept'. It appears that later on, the ITO sent these notices through his Inspector and the said notices of demand, challans and copies of the assessment orders were served on the assessee through the Inspector on 16-10-1973. The assessee filed appeals against the ex parte order under Section 144, passed by the ITO on 12-11-1973 in respect of the assessment years 1967-68 and 1968-69 and on 11-10-1973 in respect of the assessment year 1969-70. The AAC fixed these appeals for hearing on various dates such as 5-11-1975, 21-11-1975 and 18-12-1975 but on each occasion, the assessee sought an adjournment on grounds of health. The AAC then fixed the appeal for hearing on 5-3-1976 but on this date also an application was sent by registered post for adjournment because of some case in the Court of Addl. District Magistrate. The AAC by his letter dated 8-3-1976, informed the assessee to appear on 26-3-1976 and to show cause as to why the three appeals filed by him may not be dismissed on grounds of limitation. Even on the above date, i.e., on 26-3-1976, there was no compliance on behalf of the assessee and the AAC, therefore, disposed of these appeals by holding that these appeals were barred by limitation since they were filed long after the date of service (refusal of notices by the assessee was treated as valid service) of the notice of demand and the memorandum of appeals for each of the assessment years under appeal was not accompanied by any petition for condonation of the delay. In dismissing the three appeals in limine, the AAC observed as under:
I find from the records that the assessment for the two years 1967-68 and 1968-69 under appeal were completed simultaneously on 22-2-1973 and that for the year 1969-70 on 30-12-1972. The demand notice and challan for each one of the assessment years in question was sent by Regd. AD. All the registered letters were received back with the remarks 'refused to accept'. It is common knowledge that 'refusal to accept a notice' is considered in the eyes of law as valid service of the notice as has been held in the following judgments. Bhagwan Radha Kishen v. CIT  12 ITR 104 (All.), Balbhadhar Mal Kuthiala v. CIT,  31 ITR 930 (Punj.) and Mangat Ram Kuthiala v. CIT 38 ITR 1 (Punj.).
The dates of the refusal to accept the demand notices sent by the ITO are 3-3-1973 for the assessment years 1967-68 and 1968-69 and 3-2-1973 for the assessment year 1969-70. The appellant filed appeals against the assessment orders for these years, i.e., 1967-68, 1968-69, on 12-11-1973 and that for the assessment year 1969-70 on 11-10-1973. Thus all the three appeals were filed beyond the statutory period of 30 days from the date of the service of notice of the demand. The requirement of Section 249(2) has thus not been complied with. The three appeals are thus barred by limitation.
By my letter dated 8-3-1976, which was duly served, the appellant was given an opportunity to explain why the three appeals be not dismissed on ground of limitation. There is no response. The memorandum of appeals for each one of the assessment years is not accompanied by any petition for condonation of the delay in filing the appeals. Under the circumstances, the three appeals are dismissed in limine.
Aggrieved by the above findings, the assessee has come up in these appeals. The learned counsel of the assessee submitted before us that there was no valid service of the notices of demand, etc., on the assessee on 3-3-1973 and 3-2-1973 as observed by the AAC nor there was any refusal on the part of the assessee to accept these notices. It was pleaded that it was only on 16-10-1973 when the Inspector served the notice of demand, etc., on the assessee, that he came to know about the ex parte orders passed by the ITO and immediately thereafter, the appeals were filed before the AAC well within time. The learned counsel further submitted that certain disputes were going on between the assessee and the Land & Development Officer, culminating in the sealing of the assessee's residential premises on 30-3-1976. Further, it was contended that the assessee was seriously ill and for a considerable time was residing at Meerut and it was under these circumstances, that he could not appeal before the AAC on the various dates fixed for hearing of appeals. The learned counsel further submitted that in view of the adverse circumstances, the assessee could not properly attend to his tax matters and, in these circumstances, the AAC may be directed to re-hear the assessee's appeal on merits and in accordance with the provisions of law. As regard the observations of the AAC that refusal of notices of demand and challan, etc., which were sent at the assessee's address by means of registered post, tantamounts to proper service and the dates of refusal are the dates of proper service of the said notices, the learned counsel of the assessee drew our attention to the decisions reported in AIR 1973 Punj. 139, AIR 1972 Pat. 142, and AIR 1979 All. 366. On the basis of the above authorities, the learned counsel submitted that the mere endorsement of the postman that the service was refused is not to be ipso facto treated as proof of service. It was then argued that summons by registered post, if refused, no ex parte order could be passed unless the postman is summoned and if it is not so done, there are sufficient grounds for setting aside the ex parte order. The learned counsel further drew our attention to the order of the Commissioner (Appeals) relating to the assessment year 1974-75 filed at pages 5 to 8 of the paper book wherein, under similar circumstances the assessment framed by the ITO under Section 144 was cancelled and the ITO was directed to make denovo assessment. On the basis of the above arguments, the learned counsel submitted that the ex parte order passed by the AAC should be set aside and he may be directed to hear the assessee and decide the appeals filed by the assessee against the three orders passed by the ITO under Section 144 on merits and in accordance with the provisions of law. The learned representative of the department, on the other hand, has placed reliance on the order of the AAC.
We have carefully considered the rival contentions and have gone through the records and also the paper book filed by the learned counsel of the assessee. The crucial question for decision before us is whether the appeals filed by the assessee before the AAC on 12-11-1973 in respect of the assessment years 1967-68 and 1968-69 and on 11-10-1973 in respect of assessment year 1969-70 are within time or beyond the statutory period of 30 days from the date of service of the notices of demand as per requirements of Section 249(2) of the Act. The AAC, in this connection, has strongly relied on the endorsement on the registered covers sent by the ITO with the postal remarks 'refused'. The ITO issued the notices of demand, etc., by means of registered post AD and properly addressed to the assessee. Since the postal remark on these notices was 'refused', the date of refusal for the assessee was treated by the AAC as the date of service of the notices of demand. In taking this view, the AAC has relied on the following authorities : Bhagwan Radha (supra), Balbhadhar Mal (supra) and Mangat Ram (supra). In Bhagwan Radha (supra), a notice fixing the date of hearing of the appeal was sent to the assessee by the Tribunal by a registered post at the address given for service. The notice came back with the endorsement by the postal authorities as 'refused'. The High Court held that the mere endorsement of refusal made by the postal authorities was sufficient in the eye of law to justify the presumption of service of the notice on the assessee. In Balbhadhar Mai's case (supra), a notice giving intimation of the date of hearing of an appeal before the Tribunal, which was sent by registered post, was returned by the postman with the remark that the addressee refused to accept the notice. The Tribunal dismissed the assessee's appeal for default of appearance. When the matter was taken to the High Court, their Lordships held that the Tribunal was right in holding that the notice was validly served and in dismissing the appeal for default of appearance and it was further held that the High Court had no power to direct the Tribunal to state a case relating to the order dismissing the application for restoration. Their Lordships further held that where a notice addressed to a person and served by a registered post is returned to the sender with an endorsement 'refused' made by the postman, the notice would be presumed to have been duly served upon the assessee without the examination of the postman or other evidence, regarding the tender and refusal. In Mangat Ram's case (supra), the Punjab High Court took a similar view and the ratio of the decision of the Allahabad High Court in the case of Bhagwan Radha (supra), was applied. In view of the settled law as laid down by the ratio of the above decisions, we have no hesitation in upholding the findings of the A AC that the refusal on the part of the assessee to accept registered AD letters containing the notices of demand, challan and copies of the assessment orders for the assessment years 1967-68 to 1969-70 were proper and valid services on the assessee on 3-3-1973 and 3-2-1973 (date of refusal) and hence the appeals filed by the assessee before the AAC on 12-11-1973 for the assessment years 1967-68 and 1968-69 and on 11-10-1973 for the assessment year 1969-70 were barred by limitation and the AAC was not competent in law to condone the delay, particularly when there was no specific request on the part of the assessee for condonation of the delay in filing the appeals along with the memorandum of appeals.
(3.) THE learned counsel of the assessee in pressing home his point of view that there were adverse circumstances due to which the assessee could not attend to his tax matters and that the endorsement 'refused' on the registered AD letters should not be treated as proper and valid service of the notices of demand, etc., has relied on the decisions of the Punjab, Patna and Allahabad High Courts in cases reported in AIR 1973 Punj. 139, AIR 1972 Pat. 142 and AIR 1973 All. 366, but, in our opinion, in view of the direct authorities referred to earlier in Bhagwan Radha's case (supra), Balbhadhar Mal's case (supra) and Mangat Ram's case (supra), we are of the view that the authorities cited by the learned counsel do not advance his case and are distinguishable on facts. THE reference by the learned counsel to the order of the Commissioner (Appeals) for the assessment year 1973-74 is also not helpful since the said decision of the Commissioner (Appeals) was against the order under Section 146 of the Act passed by the ITO but the present appeals are against the assessments under Section 144 made by the ITO. THEre is also no rebuttal from the assessee before the AAC that the remarks 'refused' endorsed by the postman on the registered letters addressed by the ITO to the assessee were incorrectly made, that the letters were not properly addressed or that the assessee had in fact not refused to take delivery of the notices. In view of the above facts, we have no hesitation in holding that the appeals filed by the assessee before the AAC on 12-11-1973 relating to the assessment years 1967-68 and 1968-69 and on 11-10-1973 relating to the assessment year 1969-70 were filed beyond the statutory period of 30 days from the date of service of the notice of demands for these years. In these circumstances, the AAC was fully justified in treating these appeals as time-barred and in dismissing the same in limine.;