SABYASACHI MUKHARJI, J. - (1.) THE assessee is an HUF. This reference arises out of the reassessments made in respect of the wealth-tax asst. yrs. 1957-58, 1958-59, 1959-60 and 1960-61 for which the relevant valuation dates are 31st March, 1957, 31st March, 1958, 31st March, 1959 and 31st March, 1960, respectively. THE assessments had been originally completed under s. 16(3) of the said Act on the basis of returns filed by the assessee. THE WTO thereupon took proceedings under s. 17(b) of the WT Act on the ground that a part of the assessee's wealth had escaped assessment. Notices under s. 17(b) of the Act were served on one, T.P. Pal, on 15th Nov., 1960, for the asst. yrs. 1957-58, 1958-59 and 1959-60 and on 30th Nov., 1960, for the asst. yr. 1960-61. It appears that Shri T. P. Pal had signed order sheet stating that he had received notices for three assessment years on 30th Nov., 1960, and for the asst. yr. 1960-61. No point was taken at the assessment stage that notices were not validily served upon the assessee. THE WTO completed reassessments for the asst. yrs. 1957-58, 1958-59 and 1959-60 on 31st Jan., 1961, and for 1960-61 on 30th Jan., 1961, bringing to assessment escaped assets valued at Rs. 3,84,535, Rs. 3,84,535, Rs. 3,47,042 and Rs. 3,37,668 respectively for the four years.
(2.) ON appeal before the AAC a ground was allowed to be taken that the notices under s. 17(b) had not been validly served on the assessee and consequently the reassessment were bad in law. It was contended that Shri T. P. Pal was not an accredited agent of the assessee and, therefore, the service of notices on him did not constitute proper service. The AAC rejected that contention and held that, as Sri T. P. Pal was an accountant of the assessee and was regularly attending to the wealth-tax matters of the assessee in all these years and that he had been given written authorisation by the assessee to represent the assessee in all wealth-tax matters, there was a valid service upon the assessee under s. 17(b) of the Act by serving notices on Sri T.P. Pal. The AAC, however, held that even on the footing that there was no proper service, the assessee having filed the returns without objection, had waived any irregularities in service and that the reassessments have to be upheld on that basis. The assessee preferred a further appeal before the Tribunal and contended that Sri Pal had no authority to accept service of notices. The Tribunal held that Sri Pal was empowered only to represent the assessee in the wealth-tax matters and was not granted authority to accept service of any notices on behalf of the assessee. The Tribunal was of opinion that there has been no proper service on the assessee of the said notice under s. 17(b) of the Act. The Tribunal held that the service of a notice on the assessee is a condition precedent to the validity of a reassessment made under s. 17(b) of the Act; and as valid notices have not been served according to the Tribunal, the proceedings taken by the WTO in pursuance of invalid notices and consequent orders of reassessments passed thereon were void and inoperative. The Tribunal, therefore, set aside the assessments made on the assessee under s. 17(b) of the Act as being void and inoperative. The following questions have been referred to this Court under s. 27(1) of the WT Act, 1957 : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee's accountant, Shri T. P. Pal, was not an agent of the assessee for the purpose of accepting service of any process on the assessee and that accordingly there was no proper service of notice on the assessee ? (ii) Whether, in any event, having regard to the fact that the assessee had filed returns in compliance with the notices under s. 17(b) of the WT Act served on the said accountant, the Tribunal was right in holding that the assessments made on the assessee on the basis of the said returns were void and inoperative ?"
(3.) MR. B. L. Pal, learned counsel for the Revenue, relied on the decision in the case CIT vs. Bhanji Kanji's Shop (1968) 68 ITR 416 (Guj) : TC51R.1937. In that case, it was held that the two modes of service of notice mentioned in s. 63(1), of the Indian IT Act, were not exhaustive and it was permissible to have a notice served in a way not mentioned in s. 63(1) of the Indian IT Act, 1922. The Court further observed that even if there was any procedural irregularity in the service of a notice of reassessment, if the assessee admits that he had received the notice, the contention on behalf of such an assessee that the notice was improperly served must be rejected. In that case what happened was that a notice under s. 34(1)(a) of the Indian IT Act, 1922, was served on a temporary agent of an assessee, who was not an authorised agent for receipt of notices on behalf of the assessee. The assessee filed a return in pursuance of the notice and an order of reassessment was passed. In appeal against the order the assessee had contended that the notice of reassessment had been improperly served and so the order of reassessment was bad in law. It was held by the Court that in view of the fact that a return had been filed by the assessee in pursuance of the notice served on his temporary employee, it was clear that the notice had been receive by him. The reassessment proceedings had, therefore, been properly instituted. MR. Pal submitted that, in the facts and circumstances of this case, it was clear that Sri T.P. Pal was the agent of the assessee, authorised to accept service. MR. Pal further submitted that, in any event, returns having been filed, the assessee has waived irregularity in the manner of service, if any. Dr. Devi Prosad Pal, learned counsel for the assessee, on the other hand, contended that service of a notice under s. 17(b) of the WT Act was a condition precedent for the assumption of jurisdiction and if the said notice has not been properly served the WTO would have no jurisdiction. He further submitted that the service must be strictly in compliance with the provisions of s. 41 of the WT Act, that is to say, it must be in compliance with the Code of Civil Procedure. He drew our attention to the decision in the case of Sewlal Daga vs. CIT (1965) 55 ITR 406 (Cal) : TC51R.1810. In that case this Court held that service of requisite notice on the assessee was condition precedent to the validity of any reassessment made under s. 34 of the Indian IT Act, 1922, and if valid notice was not issued as required, the proceedings taken by the ITO in pursuance of an invalid notice and consequent orders of reassessment passed by him would be void and inoperative. Reliance was also placed on the decision in the case of Ramendra Nath Ghosh vs. CIT (1967) 66 ITR 414 (Cal) : TC57R.585 since affirmed by the Supreme Court in (1971) 82 ITR 888 (SC) : TC57R.583.;