Proper service of notice on the assessee is a condition precedent to the validity of re-assessment under Section 34(1) of the Income Tax Act.

M.A. Ansari, C.J.

1. This reference has been made on the application of the Commissioner of Income Tax under Section 66(1) of the Income Tax Act, herein referred to as the Act. The assessee has been doing business in Malabar produce, cloth, etc., in Kozhikode, and had for the assessment year 1945-46 submitted a return showing Rs. 7,960/- as losses. The assessment on him for the aforesaid year was, however, concluded on a total income of Rs. 8009/-. Seven years later the Income Tax Officer obtained information regarding large deposits having been made in the assessee's name in the Abdul Rehman Branch of the Central Bank of India Ltd., in Bombay, and, thereupon issued on March 18, 1954, the notice under Section 34 of the Act. It was served on the assessee's son on March 22, 1954, and the Income Tax Officer, treating the service insufficient, issued another notice, which was affixed in the business premises of the assessee, because he was said to be then in Bombay or Ceylon. Subsequently the assessee filed return and the re-assessment was concluded under Sections 23(3) and 34 of the Act, Rs. 61,036/- being then levied as the tax. One of the objections in the appeal before the Appellate Assistant Commissioner was that the entire re-assessment proceedings had been illegal and void, in as much as notice under Section 34(l)(a) of the Act had not been properly served. That objection was not sustained, and on further appeal the Income Tax Appellate Tribunal has upheld it. Therefore, the appeal was allowed, but without decisions on other issues raised in the appeal. The relevant extracts from the Tribunal's order are as follows :

"It was stated before us by the learned counsel for the assessee that he gave the Bombay address of the assessee on 8-3-1954 and we have no reason to doubt this statement and therefore, it passed our comprehension why the Income Tax Officer did not move in the matter quickly except that he believed in the affixture as a good aid in the last resort. With this knowledge of the whereabouts of the assessee, "it is futile" to borrow the words of their Lordships in Myitkyina Trading Depot v. Deputy Tahsildar, Paramakudi (32 ITR p. 393) to look for the assessee at Calicut or to claim that he could not be found at Calicut. Recourse to substituted service is not to be resorted to as a matter of routine. It should be shown that the party was avoiding such service. There is no evidence to show that this was so. Moreover, the notice by affixture could not be established in absence of their addresses. The assessee's counsel requeued an opportunity to examine the witnesses, but no such opportunity was given to him.

We are, therefore of the opinion that there was no proper service of the notice on the assessee................"

Thereafter, the Commissioner of Income Tax applied, and the following question has been referred :

"Whether on the facts and in the circumstances of the case, the re-assessment for the year 1945-46 made on 9-3-1955 was valid".

2. On January 2, 1961, a Division Bench of this court of which one of us was a party had found additional facts to be necessary for answering the question. It had been then held that the jurisdiction of the Income Tax Officer under Section 34 of the Act did not depend upon issue of a notice, but that the notice was a condition precedent to the assumption of jurisdiction vested in the Income Tax Officer. Consistently it was found that should the assessee waive the absence of notice the Income Tax Officer would not be considered to have made invalid assessment, and further statement as to whether there had been such waiver by the assessee to cure the infirmity in the notice was necessary. Therefore the Tribunal was asked to and has submitted a further statement. Therein the assessee's several requests subsequent to the affixation of the notice at his business premises on March 24, 1954 are given in some detail, and finally the Tribunal finds that from the facts so set out there is