Registered post service and limitation orders: presumed valid service upheld, and a fully heard delay refusal was appealable.

Service of a notice of demand sent by registered post to the assessee's address was treated as valid service for limitation purposes because postal delivery attracts the statutory presumption of due service, and that presumption was not rebutted. The limitation period therefore ran from receipt at the assessee's address. Where the Appellate Assistant Commissioner heard both sides on limitation and then refused to condone delay, the resulting order was treated as one made after hearing under the appellate provision, not as a threshold rejection for default or clear time-bar. The appeal to the Tribunal was therefore competent on the limitation issue.

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Issues: (i) Whether service of notice of demand sent by registered post to persons receiving it at the address given by the assessee amounted to valid service on the assessee for the purpose of computing limitation for appeal. (ii) Whether an order of the Appellate Assistant Commissioner refusing to condone delay after hearing the parties on limitation was an order under section 30(2) of the Income-tax Act, 1922, and therefore not appealable, or an order under section 31 and appealable.

Issue (i): Whether service of notice of demand sent by registered post to persons receiving it at the address given by the assessee amounted to valid service on the assessee for the purpose of computing limitation for appeal.

Analysis: Section 63(1) of the Income-tax Act, 1922 permits service of notice either by post or as if it were a summons under the Code of Civil Procedure, and the two modes are distinct. When service is effected by registered post, the ordinary presumption of due service applies under section 27 of the General Clauses Act, and delivery at the addressee's house or office, or to his servant or agent, is treated as delivery to the addressee under the postal law. The requirement of proving personal service under Order V, rule 12 of the Code of Civil Procedure applies only when the Department adopts the summons mode of service, not when it uses registered post. In the absence of rebutting evidence, the presumption of service remained unrebutted.

Conclusion: The service was valid and the starting point of limitation was the date on which the notices were received by the persons at the assessee's address; the answer was in favour of the Revenue.

Issue (ii): Whether an order of the Appellate Assistant Commissioner refusing to condone delay after hearing the parties on limitation was an order under section 30(2) of the Income-tax Act, 1922, and therefore not appealable, or an order under section 31 and appealable.

Analysis: Section 30(2) deals with rejection of appeals at the threshold for formal defects or where the appeal is admittedly time-barred and the question is not gone into after a full hearing. Where the assessee disputes limitation and the Appellate Assistant Commissioner hears the parties on the factual and legal issue and then decides the matter, the order is made after hearing and falls within section 31. The view that finality attaches only to a refusal to condone delay in the limited class of cases contemplated by section 30(2) was adopted, and the appeal to the Tribunal against such an order was treated as competent.

Conclusion: The refusal to condone delay was not an order under section 30(2) but one under section 31, and the appeal to the Tribunal was competent; this was in favour of the assessee.

Final Conclusion: The reference was answered by upholding the validity of service by registered post and by holding that the order on limitation was appealable after a full hearing, so the assessee succeeded only on the second issue.

Ratio Decidendi: When a notice is sent by registered post under the Income-tax Act, due service is presumed unless rebutted by positive evidence; and where limitation is decided after a full hearing on facts and law, the resulting order is one under the appellate hearing provision rather than a threshold rejection for limitation.

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