Service of Notice: agent acceptance under principal's direction can effect valid statutory service, rendering subsequent assessment lawful.

Validity of statutory service is analysed regarding a notice under the Income-tax Act delivered over two days; the key legal principle applied is that personal service is effected where a notice is presented in the taxpayer's presence and accepted by an agent acting under the taxpayer's direction. The accountant's prior role in accepting notices and the assessee's contemporaneous direction rendered the first delivery operative; the later refusal was immaterial. Consequent assessment proceedings and denial of cancellation proceeded on the basis of valid service and were held lawful in substance.

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Issues: (i) Whether the notice under section 34 of the Income-tax Act, 1922 was validly served on the assessee such that the subsequent assessment under section 23(4) and rejection of the application under section 27 were lawful.

Analysis: The Court examined the facts of service over two days: on 30 March the notice was presented in the presence of the partly paralysed assessee and was placed in the hands of his accountant, Suram Chand, under the assessee's direction and acknowledged; on 31 March an inspector again saw the assessee who declined to accept the notice. The Court considered the statutory mode of service in section 63(1) of the Income-tax Act, 1922 (service by post or as if a summons under the Code of Civil Procedure) and applied the principles governing personal service and acceptance by an agent acting under the direction of the assessee. The Court treated the accountant's prior history of accepting notices on behalf of the assessee and the direct placing of the notice in his hands at the assessee's instance as operative facts. The subsequent act of the assessee in declining the notice on 31 March was unnecessary because valid service had already occurred on 30 March.

Conclusion: The notice was validly served on the assessee on 30 March when it was presented in his presence and accepted by his accountant at his direction; the assessment and refusal to cancel were therefore lawful and the petition is dismissed.

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