A.D.AHMED, J. - (1.) THIS is a reference by the Tribunal at the instance of the assessee under s. 66(1) of the IT Act, 1922. The facts of the case are that the assessee in response to two notices submitted a return of his income for the year of assessment 1944-45, and another return in respect of asst. yr. 1945-46. In the forms of return submitted by the assessee his address was stated as Khanpur, Narayanganj. Income-tax was duly assessed by the ITO and two notices of demand were sent by the IT Department to the assessee by registered post at the address given by him in his return. The notice of demand relating to the year 1944-45 was received at Khanpur by one M. Bhaumick who signed for the assessee on the 14th Oct., 1949. The other notice which was also served at Khanpur was received by B. Banerjee on the 11th Nov., 1949, who also signed for the assessee. The assessee applied for copies of the orders on the 1st of Dec., 1949, and received them on the 15th June, 1950, and he filed his petition of appeal to the Asstt. CIT on the 5th July, 1950. On the 30th August, 1950, the petition of appeal was put up to the AAC and was ordered to be registered and the ITO was called upon to report on the petition of appeal by the 20th Sept., 1950. What happened on the 20th Sept., 1950, we do not know but the second order recorded is "Issue notice fixing 5th March 1951/10th March,1951, for hearing at Dacca subject to admission of appeal." An objection appears to have been taken to the appeals on the ground that they were out of time and the nature of the objection of the Department appears from an order, dt. 6th April, 1951, of the AAC, to be that the office had reported that no application was made by the appellant for copies of the orders and therefore the appeals were out of time. In order No. 8, dt. 6th April, 1951, aforesaid, the AAC states : "............Seen report dt. 4th April, 1951, from IAC. According to this no application was filed by the assessee for copy of the relevant assessment orders. If that be the case then the appeal stands clearly long barred by limitation. I would ask the appellant to show-cause by tomorrow why the appeal should not be treated as 'outof time' and therefore rejected." At the next hearing which was fixed for the 7th April, 1951, the order passed was: "Seen written explanation of date and also heard the learned representative in details. For orders". At this stage evidently the AAC had heard the parties on the preliminary objection and had reserved the case for orders but on the next date, namely, the 30th July, 1951, it appears that both parties were again heard and then orders were passed rejecting the appeal on the ground of limitation.
(2.) IT appears that at the second hearing which was on the 30th July, 1951, elaborate arguments were heard by the Asstt. CIT on the question of limitation involving various questions of law including that of agency. In the petition of appeal, the assessee did not ask for condonation of any delay in filing the appeal, but stated that he had received the notice of demand on the 28th of Nov., 1949, and excluding the time taken in obtaining the copies of the orders, to which he would be entitled under s. 67A of the IT Act, his appeal was in time. The question, therefore, canvassed before the Asstt. CIT was whether limitation in the circumstances of the case was to run from the date on which M. Bhaumick and B. Bannerjee received the notices on behalf of the assessee or the date on which the assessee himself received the notices. The appellant at the hearing denied that Bhaumick and Bannerjee or either of them was his agent duly authorised to receive postal articles on his behalf. The assessee also denied that he had any place of business at Khanpur, Narayanganj, but there was an office of a trust known as Kumudini Welfare Trust of Bengal Ltd. of which he was the founder and a director. These denials by the assessee were made by his authorised representative, who is a registered accountant and was qualified under s. 61(1) of the Act to act as such and appeared with an advocate. No evidence of any kind was adduced on the sworn testimony of any one personally acquainted with those facts or an affidavit by any such person. On the above facts two questions with regard to the two cases relating to the two years of assessment have been referred for the decision of this Court, namely, with regard to the asst. yr. 1944-45 : "Whether on the findings recorded by the Tribunal, the service of notice of demand on Mr. Bhaumick was a valid service as contemplated by s. 63 of the IT Act, r/w O. V, r. 12, of the CPC, so that the starting point of limitation for an appeal to the AAC can be said to be that 14th Oct., 1949 ?" If the answer to the above question be in the affirmative, the second question referred is : "Whether, in the circumstances of the case, the order of the AAC refusing to condone the delay is an order falling within s. 30(2) and, if so, whether the appeal to the Tribunal against the refusal to condone the delay was incompetent ?" Two questions on the same lines have been also referred in the case relating to the asst. yr. 1945-46. The two questions are identical except that in the first question instead of Mr. Bhaumick, the name of Mr. Bannerjee is put down and instead of 14th Oct., 1949, as the date of receipt, 11th Nov., 1949, as the date of receipt, 11th Nov., 1949, is mentioned. Otherwise, the two questions are the same. The period of limitation for appeals in such cases is laid down in s. 30, sub-s. (2), of the IT Act, which provide that "the appeal shall ordinarily be presented within thirty days.........of receipt of the notice of demand relating to the assessment...........but the AAC may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within that period." It was urged on behalf of the assessee that inasmuch as the notices of demand were received by him on the 28th Nov., 1949, the limitation of one month was to run from that date and after allowing the time that was taken in delivering the copy to him, he was within time in both these appeals. It was also urged that Bhaumick and Bannerjee were not his agents authorised in writing to receive notices on his behalf and therefore the date on which he actually received the notices should be the starting point of limitation. The whole thing turns on the question whether in the eye of law the delivery of notices to Bhaumick and Bannerjee would amount to service of notices on the assessee himself. The mode of service of notice under the IT Act is provided by s. 63, for which we are in the present case concerned with only sub-s. (1), which runs as follows : "A notice or requisition under this Act may be served on the person therein named either by post or, as if it were a summons issued by a Court, under the CPC, 1908." It was urged by the learned advocate appearing for the assessee that this section provides that in serving notice, the IT Department was bound to follow the procedure laid down for service of a summons under the CPC and that under O. V, r. 12, of the said Code which regulates.......the service of summonses, it is essential that the service must be on the assessee in person when practicable unless he had an agent empowered to accept service in which case service on such agent shall be sufficient, and it was urged that in this case it was not shown that it was not practicable to effect the service in person or that the persons on whom the service was actually made were agents of the assessee empowered to accept service on his behalf. It was, therefore, argued that limitation would run from a later date when the assessee actually received those notices. In support of this argument two cases were relied upon by the learned advocate for the assessee, namely, the case of CIT vs. Dey Bros. (1935) 3 ITR 213 (Rang) : TC 70R.612 and CIT vs. Baxiram Rodmal (1934) 2 ITR 438 (Nag) : TC 70R.615. But both these cases were cases in which the notices were served as summonses and were not sent by post and therefore they are distinguishable from the facts of the present case. To my mind from the language of s. 63, sub-s. (1), of the IT Act, it is clear that one of two alternative modes of service of notice has been made available for service of any notice under the Act, namely, (1) it may be sent by post, and (2) it may be served by way of a summons issued by a civil Court. The two modes of service are disjunctive and are governed by different principles of law. If the mode of sending the notice by post is adopted, all that is necessary to be done by the sender is to properly address the letter, pre-pay the posting charges and post it and if it is by registered post, the service of the letter containing the notice shall be deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post. This is provided for in s. 27 of the General Clauses Act under which is which in such circumstances the notice would be deemed to have been served on the addresses and at the time when the letters are ordinarily delivered unless the contrary is proved. Under the Post Office Act, s. 3(c), the delivery of a postal article at the house or office of the addressee, or to the addresses of his servant or agent or other person considered to be authorised to receive the article according to the usual manner of delivering postal articles to the addressee, shall be deemed to be delivery to the address. So when the IT Department chooses to send a notice by registered post, they can rely on the presumption of service at the proper time unless the presumption is rebutted by positive evidence.
(3.) IT is only when the second mode of serving the notice under s. 63(1) is adopted, i.e., when it is served by way of a summons, that the sender of the Department has to prove that the service has been effected in accordance with the provisions of O. V, r. 12, of the CPC. In the present case the notices having been sent under registered post, the alternative provisions of s. 63(1) which provides for service of notice by way of summons does not come into play and the part of the first question referred to us viz., the qualification r/w O V, r. 12, of the CPC is redundant to the facts of the present case in the view of s. 63(1) which I have stated above. As no rebutting evidence has been given, the presumption in favour of due service stands and the date of service on Mr. Bhaumick in the one case and B. Bannerjee in the other case will be the dates of service of the notices on the assessee. IT was, however, argued on behalf of the assessee that even though no evidence was adduced by his client in this behalf, the very fact that the notice were served not on the assessee himself but on two other persons, namely, Bhaumick and Bannerjee itself is sufficient to rebut the presumption of service under s. 27 of the General Clauses Act. In reply, the learned Advocate for the IT authorities has relied on the decision of the Privy Council in the case of Harihar Banerji vs. Ramshashi Roy (1919) ILR 46 Cal 458 where it was held that : "the presumption that the notice so served has been received is greater when the letter is registered as in the present case, and is not rebutted but strengthened by the fact that a receipt for it is produced signed on behalf of the addressee by some person other than the addressee himself." I may here also refer to In the matter of Desouza (1932) 54 All 548 where a notice was sent by registered post under s. 63 (1) of the IT Act and was received by the assessee's minor son who did not even sign for his father but received the notice by signing only his name, where it was held that the service of notice was a good service. In this connection our attention was also drawn to para 113 of the Postal Guide published in 1946 where postmen are directed to deliver postal articles to agents who are authorised in writing to receive them. We have looked up an earlier Postal Guide of the year 1936 where the words "authorised in writing" do not appear. IT has not been shown under what authority the Postal Guide has been prepared; on the other hand we were handed a copy of the Post and Telegraph Manual issued by the Government of India, 3rd Edn., 1941, in which r. 63 at p. 56, Vol. I, Part, I, provides: "No registered article shall be delivered to the addressee unless and until he or his agent has signed a receipt for it in such form that the Director General shall prescribe." The above rule was made by the Central Government under the rule-making power given to it by s. 74 of the Post Office Act. So, if there is anything in para 113 of the Guide, which is contrary to this rule or to s. 3 of the Post Office Act where authorisation of the agent in writing is not required, it may be taken as Departmental instructions to the employees of the Post Office and not affect the validity and the legality of service and delivery in accordance with the provisions of law. For the reasons the answer to question (I) in both the cases is in the affirmative. I would now deal the second question. Strictly speaking this question does not very well arise from the facts of the present case inasmuch as the assessee throughout the appeal took up the position that he was within time and did not apply for condonation of the delay in filing the appeal. But as the Asstt. CIT has himself raised this question in the last paragraph of his judgment in the following words " "Besides, the question of condonation can come only when one comes with a clean breast. That element being absent in this case, this, in the circumstances, cannot be treated as a fit case for condonation," I may as well deal with this question. In support of the proposition that an order refusing to condone delay comes under s. 30, sub-s. (2), of the IT Act and not under s. 31 of the Act and therefore is not appealable, reliance has been placed on a member of cases and particularly on the case of Dewan Chand vs. CIT (1951) 20 ITR 621 (Punj) : TC 8R.195 in which it was held that when the AAC refuses to condone the delay and rejects the appeal as time- barred on the date of the hearing, the order is one passed under s. 30(2) and not one under s. 31 and that the mere issue of a notice informing the petitioners of the date on which their appeal would be considered does not mean that their appeal had been admitted. All the cases on which reliance has been placed in support of this point of view were cases in which the Asstt. CIT was held not to have entertained the appeal and in some of those cases the appeals were admittedly presented out of time with a prayer for condonation of the delay. In this connection reference was also made to the case of K.K. Porbunderwalla vs. CIT (1952) 21 ITR 63 (Bom) : TC 8R.196, in which it was held not without some inconsistency that the portion of the AAC's order dismissing the appeal was appealable under s. 31 but the portion of the order refusing to condone the delay fell under s. 30(2) and was not appealable. To my mind, it is not the nature of the order that makes it appealable under s. 31 or not appealable under s. 30(2), but it is the stage at which the order is made that determines the right of appeal. Sec. 30(2) contemplates rejection of the petition of appeal for some formal defects, such as that of verification, signature or where the appeal is prima facie and admittedly time-barred which does not require any elaborate hearing and in which the appeal is rejected for such defects in limine. But if the assessee insists that he is within time and he has been heard on that point, on questions of fact and law, the rejection will be deemed to have been made after hearing the appeal and will come under s. 31 of the IT Act. The IT Act does not provide for any preliminary hearing of the appeal for the purpose of admission but the memorandum of appeal which is in form and apparently in order will be taken to have been admitted and will be heard in due course. I may quote here the observation of Chagla, C.J. in Porbunderwalla's case (supra) which appears at p. 66 of Vol. 21 of the Income Tax Reports and which runs as follows : "An intermediate stage between the presentation of the appeal and the hearing of the appeal is provided by the last clause of s. 30(2) and that intermediate stage relates to those appeals which are out of time but in which the appellant asks for condonation of delay from the AAC and it is left to the decision of the AAC whether to condone or not to condone the delay. If he is satisfied that there is sufficient ground for condoning delay then he might condone the delay; on the other hand, if he is satisfied that there is no sufficient cause then he might not condone the delay. It is only after he condones the delay that the appeal is admitted and on admission the appeal comes on for hearing under s. 31. But in all other cases, except the case to which I have just referred, the statute does not provide for any intermediate stage between presentation of the appeal an the hearing of the appeal. Every appellant has a statutory right to have his appeal heard under s. 31 and once the appeal is heard under s. 31 every order, whatever the nature of it may be, that is made by AAC is under s. 31,.........Looking at it from another point of view the legislature has chosen to given finality to the judgment of the AAC only in one specific case and that case is whether the AAC refuses to condone the delay on the ground that there is no sufficient ground. The view taken by the legislature is that in such a case there should be no further appeal and the party should abide by the decision of the AAC. But it is clear that it was not the intention of the lislature that in a case where the AAC takes the view that the appeal is barred by limitation his view should be final and should not be challenged before the Tribunal. The AAC may take the view that the appeal is barred by limitation on various grounds; he may hold that the appeal is barred on appreciation of evidence as to facts, he may consider that the appeal is barred by limitation on an interpretation of the law, but in every case his decision is subject to a challenge before the Tribunal." ;