Ex parte income-tax assessment challenge requires first using the statutory cancellation remedy before appealing on defective notice service.

An assessee cannot directly challenge the validity of an ex parte assessment made under section 23(4) on the ground of defective service of notice under section 34 in an appeal under section 30. The proper statutory course is first to invoke section 27 to seek cancellation of the ex parte assessment; only after that remedy is pursued and refused can appellate relief be considered. A notice-service defect, even if assumed, does not by itself permit bypassing section 27 or make the assessment appealable on that point.

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Issues: Whether the validity of service of notices under section 34 of the Indian Income-tax Act, 1922 could be challenged in an appeal against an order under section 23(4) when no proceedings under section 27 had been taken to have the order under section 23(4) cancelled.

Analysis: The reference turned on the relationship between the remedy under section 27 and the right of appeal under section 30. The Court held that where an assessment is made under section 23(4), the assessee cannot directly assail the validity of that assessment in an appeal under section 30 on the ground that notice under section 34 was not properly served. The proper course is first to seek cancellation of the ex parte assessment under section 27, and only if relief is refused can the assessee pursue the appellate remedy against that order. The service defect, even if assumed, does not by itself make the assessment order appealable on the question of validity when section 27 was not invoked.

Conclusion: The validity of service of notices under section 34 cannot be challenged in an appeal against an order under section 23(4) when no proceedings under section 27 were taken to have that order cancelled.

Ratio Decidendi: An assessee cannot bypass the statutory remedy under section 27 and directly challenge the legality of an ex parte assessment under section 23(4) in an appeal under section 30 on the ground of defective service of notice under section 34.

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