P.K. Goswami, J. -
(1.) THIS reference involving two applications, one under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the old Act") and the other under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the new Act"), is made by the Income-tax Appellate Tribunal, "A" Bench, Calcutta, in respect of the assessment years 1960-61 and 1961-62. The questions which have been referred to us may be set out:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the notices to show cause under Section 33B of the Indian Income-tax Act, 1922, and Section 263 of the Income-tax Act, 1961, for the assessment years 1960-61 and 1961-62 were not validly served on the assessee ?
(2) If the answer to question No. 1 is in the affirmative, then whether the Tribunal was right in holding that the proceedings under Section 33B of the Indian Income-tax Act, 1922, and Section 263 of the Income-tax Act, 1961, were invalid and illegal ?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in refusing to direct the Commissioner to pass fresh orders under Section 33B of the Indian Income-tax Act, 1922, and Section 263 of the Income-tax Act, 1961, after giving the assessee a further opportunity of being heard ?"
(2.) THE facts material for coming to a decision on the above questions may be briefly stated. THE assessee, Smt. Sabitri Devi Agarwalla, filed voluntary returns of income for the assessment years 1949-50 to 1958-59 before the Income-tax Officer, "A" Ward, Special Survey Circle IV, Calcutta, on September 30, 1958, and the assessment for those years was completed by the Income-tax Officer on the same date. THE returns for the years 1960-61 and 1961-62 are also said to be filed on the dates of the assessment orders. THE assessee gave two addresses in her returns, one at P-17, B.L. Pal Avenue, Calcutta, and the other at HA. Haralal Das Street, Calcutta. THE Commissioner of Income-tax, Calcutta, considered that the assessment orders for the years 1960-61 and 1961-62 passed by the Income-tax Officer were erroneous and were prejudicial to the interests of the revenue and he issued a letter dated July 24, 1968, calling upon the assessee to show cause why the order for those assessment years should not be revised under Section 33B of the old Act and Section 263 of the new Act, respectively. THEse notices were attempted to be served by post as well as through an officer of the department, but none could be served on the assessee as it was reported that the assessee was untraced and not known in the addresses given. In this context, the Income-tax Officer in charge, of judicial matters in the office of the Commissioner of Income-tax passed an order on July 25, 1963, to the following effect:
"Shri S.K. Sengupta, Inspector, appears and states that the assessee is not traceable at both the addresses. He is asked to make another attempt to serve the notice on the assessee failing which he is asked to serve it by affixation at both the addresses. "
Another order was passed by the same officer on the following day as follows:
"Shri S.K. Sengupta, Inspector, reports that assessee could not be found in spite of his best efforts. So the notices have been served by affixation. Service is valid."
There is another order of the same date stating;
"Shri S.K. Sengupta, Inspector, appears and affirm service of show cause notice by affixation at Amratola Street and Harlal Das Street addresses. Services are valid."
(3.) THE matter came up before the Commissioner on 5th of August, 1963, which was the date fixed for hearing in the notices which had been issued to the assessee, and as none appeared on that date, the case was posted for the next day when the Commissioner passed his order cancelling both the assessment orders and directing the Income-tax Officer to make fresh assessment according to law after due enquiry. THE assessee preferred appeals against these two orders to the Income-tax Appellate Tribunal and the latter allowed both the appeals holding that there was no proper service of notice under Section 33B, and hence, the entire proceeding was invalid and illegal. THE Tribunal also refused to accede to the prayer of the department for a direction to the Commissioner to take up the matter after issuing proper notices from the stage where the illegality has been found to occur.
In order to determine the question of law involved in this case, we may read Section 33B of the old Act. Section 33B(1) and (2) of the old Act and Section 263(1) and (2) of the new Act are in pari materia except that in Sub-section (2)(a) of the new Act. Section 147 has taken the place of Section 34. We may, therefore, read Section 33B(1) and (2) as also Sub-section (3):
"33B. (1) The Commissioner may call for and examine the record of any proceeding under this Act and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.
(2) No order shall be made under Sub-section (1)-
(a) to revise an order of reassessment made under the provisions of Section 34; or
(b) after the expiry of two years from the date of the order sought to be revised.
(3) Any assessee objecting to an order passed by the Commissioner under Sub-section (1) may appeal to the Appellate Tribunal within 60 days of the date on which the order is communicated to him. "