Valid service of income-tax notice requires authorised receipt; promised adjourned date must be communicated before adverse assessment

Service of an income-tax notice is valid only when it is received by a person legally authorised to accept service; handing it to a family accountant who was neither a recognised agent nor authorised in writing was insufficient. Past dealings with the department or occasional appearance on behalf of the family did not create authority to accept service. Where an assessee requested time and was told the adjourned date would be communicated later, the assessee was entitled to wait for that intimation, and the department could not treat the opportunity as reasonable without proof of effective communication. The invalid service and lack of reasonable opportunity were stated to vitiate the ex parte assessment.

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Issues: (i) whether service of an income-tax notice on the family accountant amounted to valid service on the assessee; (ii) whether the assessee had a reasonable opportunity to comply with the notice when the adjourned date was not separately communicated.

Issue (i): whether service of an income-tax notice on the family accountant amounted to valid service on the assessee.

Analysis: Service under the Income Tax Act could be effected in the manner prescribed by the Civil Procedure Code, and in the case of a Hindu undivided family the notice could be addressed to an adult male member. However, the accountant was neither a recognized agent nor a person appointed in writing to accept service. Past conduct in receiving notices or appearing on behalf of the family did not by itself confer authority to accept service of process. The requirement of valid service could not be satisfied merely because the notice was handed to a person who had sometimes dealt with the department.

Conclusion: Service of the notice on the accountant was not valid service on the assessee.

Issue (ii): whether the assessee had a reasonable opportunity to comply with the notice when the adjourned date was not separately communicated.

Analysis: Where the assessee had asked for time and the Income Tax Officer had stated that the adjourned date would be intimated, the assessee was entitled to wait for that communication. In the absence of proof that the adjourned date or the contents of the notice effectively reached the assessee, the department could not treat the opportunity as reasonable. The officer was expected to verify that the person receiving the notice was actually authorized to represent the assessee.

Conclusion: The assessee had not been given a reasonable opportunity to comply with the notice.

Final Conclusion: The invalid service and lack of a reasonable opportunity vitiated the ex parte assessment, entitling the assessee to succeed.

Ratio Decidendi: A notice under the income-tax law is not validly served unless it is received by a person who is legally authorized to accept service, and an assessee cannot be denied relief where the department fails to ensure such authority or to communicate the promised adjourned date.

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