Valid service by affixture after refusal of notice kept reassessment proceedings within limitation under civil procedure rules.

A notice under section 34(1)(a) was validly served where the process-server personally tendered it, the assessee refused acceptance, and affixture at the residence followed as part of the same transaction. In those facts, the first limb of Order 5 Rule 17 applied, so the further requirement of due and reasonable diligence under the latter limb was not attracted. An attempt to rely on substituted service under Order 5 Rule 20 also failed because no prior authorising order was shown. As service was complete on 29 March 1958, the reassessment proceedings for the relevant assessment year were held to be within limitation.

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Issues: (i) Whether the notice under section 34(1)(a) of the Income-tax Act, 1922 was properly served on the assessee on 29 March 1958 by affixture. (ii) Whether the reassessment proceedings for the assessment year 1949-50 were barred by limitation.

Issue (i): Whether the notice under section 34(1)(a) of the Income-tax Act, 1922 was properly served on the assessee on 29 March 1958 by affixture.

Analysis: The process-server had personally tendered the notice to the assessee on 25 March 1958 and the assessee refused to accept it. The subsequent affixture at the assessee's residence was treated as part of the same transaction. On that factual basis, the first part of Order 5 Rule 17 of the Code of Civil Procedure, 1908 applied. The requirement of using all due and reasonable diligence under the latter part of Rule 17 was not attracted because the assessee had already been found and had refused service. The attempt to invoke Order 5 Rule 20 of the Code of Civil Procedure, 1908 also failed because no order for substituted service was shown.

Conclusion: The notice was validly and properly served on 29 March 1958.

Issue (ii): Whether the reassessment proceedings for the assessment year 1949-50 were barred by limitation.

Analysis: Once service of the notice was held to be complete on 29 March 1958, the reopening fell within the permissible time. The objection that the notice had been served after the expiry of limitation therefore did not survive.

Conclusion: The reassessment proceedings were not barred by limitation.

Final Conclusion: The reference was answered in favour of the Revenue, the notice for reopening was upheld as validly served, and the reassessment was held to be within time.

Ratio Decidendi: Where a notice is personally tendered and refused, later affixture at the residence may constitute valid service under the first limb of Order 5 Rule 17 of the Code of Civil Procedure, 1908, and substituted service under Order 5 Rule 20 requires a prior authorising order.

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