JUDGMENT

1. On the 28th of June, 1950, the Income-tax Officer "A" Ward, Lahore, issued a notice under section 22(2) of the Income-tax Act to an unregistered firm, Messrs. Muhammad Idrees Barry & Co., calling upon the firm to file a return for the assessment year 1950-51. Messrs. Muhammad Idrees Barry & Co., (hereinafter called the assessee) is a firm whose partners reside in Karachi, but which carries on a business of sale of piece-goods in Anarkali, Lahore. The manager of the firm in Lahore is one Manzur Ahmad, and on Habib-ur-Rahman is its salesman. The notice issued by the Income-tax Officer was served on the 27th of July, 1950, on Habib-ur-Rahman. Habib-ur-Rahman gave the notice to Manzur Ahmad who, it appears, was not present when the process-server brought the notice and Manzur Ahmad informed Mr. Muhammad Idrees Barry who was at Karachi of the receipt of notice. He received a reply that a lawyer should be consulted. The last date for filing the return which was the 1st of September, 1950, expired and no return was in fact filed. On the 15th of January, 1951, the Income-tax Officer issued another notice under section 22(4) of the Income-tax Act, calling upon the firm to produce its account books by the 29th of January, 1951, on which date the assessee put in an application asking for an adjournment for the production of accounts on the ground that the accountant of the firm had been taken ill, but the adjournment was refused, and, on the same day, the Income-tax Officer made a best judgment assessment under section 23(4).

2. The assessee appealed to the Appellate Assistant Commissioner against assessment on the ground that service on Habib-ur-Rahman of the notice under section 22(2) was not valid service, and, therefore, on the strength of that service, an order under section 23(4) could not have been made. The learned Appellate Assistant Commissioner accepted the contention and set aside the assessment directing the Income-tax Officer to issue a fresh notice. Against this order of the Appellate Assistant Commissioner, there was a further appeal to the Appellate Tribunal. The Appellate Tribunal, after recording the statement of Manzur Ahmad, the manager in Lahore of the firm, held that service on Habib-ur-Rahman was effective and, accepting the appeal of the Income-tax Officer, it restored the order of assessment passed by the Income-tax Officer.

The assessee applied to the Appellate Tribunal under section 66(1) for referring the following question to the High Cour :

"Is Habib-ur-Rahman, the agent or manager, empowered to accept service of the notice from the Income-tax Officer, Lahore, on behalf of the assessee firm of Messrs. Muhammad Idrees Barry & Co., Lahore, within the meaning of Order V, rule 9(1), of the Code of Civil Procedur ?"

The Appellate Tribunal recast this question as follow :

"Whether there is any material in support of the Tribunals finding that Habib-ur-Rahman was the assessees agent empowered to accept service of notice within the meaning of Order, V, rule 12, of the Code of Civil Procedure, read with section 63(1) of the Income-tax Ac ?"

and referred it to the High Court.

From what has been stated above, it would be clear that the assessee firm had in this case full knowledge through its own employees that a notice had been issued by the Income-tax Officer and received on its behalf. It had accepted the notice as good and had moved the Income-tax Officer for an adjournment. Under the circumstances, the plea of nonservice is a purely technical one, for it cannot be urged that the alleged irregularity in the service of notice caused prejudice to the assessee. It is contended, however, on behalf of the assessee that the provisions relating to service of notices have to be strictly complied with in view of the fact that the consequences of failure to comply with the notices are very serious. It is also urged that the scope of the question which has been referred is limited and that to that question the reply can