Judgement

SIKRI, J. : This appeal by special leave is directed against the judgment of the High Court of Punjab, Chandigarh, in Income-tax Reference No. 23 of 1962, made to it by the Income-tax Tribunal under S. 66 (1) of the Indian Income-tax Act, 1922. The following question was referred to the High Court :

"Where on the facts and the circumstances of the case the notice under section 34 of the Income-tax Act was properly served on the assessee within the prescribed period.

2. The relevant facts, in brief, are that the respondent, Shri Daulat Ram Khanna, hereinafter referred to as the assessee, is a Hindu undivided family, and the dispute relates to the year of assessment 1954-55. Proceedings under S. 34 of the Income-tax Act were started by the Incomes-tax Officer, B Ward, Amritsar, against the assessee by issue of a notice on March 29, 1954. The Process Server went to the assessee s shop for service of the notice on the assessee on March 30, 1954 but he could not serve it on the assessee because the karta of the assessee was not present. The Process Server reported to the Income-tax Officer on the same day that the assessee had refused to accept the service of the notice. On receipt of the said report, the Income-tax Officer, on the same day, i,e., March 30, 1954, sent the notice per registered post and also ordered substituted service of the notice directing the Process Server to affix the same at the address of the assessee. The notice was affixed on March 31, 1954. We need not give the facts regarding the service of the notice by registered post because it was received by the assessee on April 5, 1954. In view of the fact that the notice was affixed according to the directions of the Income-tax Officer, he, after recording the statement of the Process Server, held that the service of the notice by affixture was proper.

3. The assessee appealed. The Appellate Assistant Commissioner inter alia held that as a copy of the notice was not pasted on the outer wall of the office room of the Income-tax Office, the substituted service was invalid.

4. Further on appeal, the Appellate Tribunal held that the notice was properly served under O. V. R. 20 (1) of the Code of Civil Procedure, and as the Income-tax Officer 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. The Tribunal, therefore, held that the notice was properly served and set aside the order of the Appellate Assistant Commissioner.

5. The High Court, following its earlier decision in Jhabar Mal Chokhani v. Commr. of Income-tax, (1963) 49 ITR 391: (AIR 1963 Punj 486), held that the substituted service was invalid and answered the question in the negative. It also refused to allow the counsel for the Revenue to raise the point that the notice under S. 34 had been served in time even if the service be taken to have been effected after March31, 1954. He had relied before the High Court on the Indian Income-tax (Amendment) Act, 1959, and the decision of this Court in S. C. Prashar v. Vasantsen Dwarkadas, (1963) 49 ITR (SC) 1.

6. The learned counsel for the Revenue, Mr. B. Sen urges that in view of Commr. of Income-tax v. Straw Products Ltd., (1966) 60 ITR 156, the High Court erred in not allowing the second point to be raised and secondly, he contends that the earlier case of the High Court in (1963) 49 ITR 391, was wrongly decided. As we agree with the latter contention, it is not necessary to deal with the first point raised by him.

7. Under S. 63 of the Income-tax Act a notice may be served as if it were a summons issued by the Court under the Code of Civil Procedure. The answer to the question depends on the true interpretation of 0. V R. 20 (l) of the Civil Procedure Code which reads as follows:

"(1) Where the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordi