COMMISSIONER OF INCOME-TAX, PUNJAB versus DAULAT RAM KHANNA

Citation: [1967] 3 S.C.R. 298 · Decided: 29-03-1967 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

COMMISSIONER OF INCOME-TAX, PUNJAB 
v. 
DAULAT RAM KHANNA 
March 29, 1967 
[J. C. SHAH, S. M. SIKRI AND V. RAMASWAMI, JJ.] 
Income Tax Act (11 of 1922) s. 63-Notice under s. 34-Direction 
by Income-tax Officer to affix at address of assessee-No a/fixture on the 
notice board of the Income-tax Office-Sufficiency of substituted service. 
Code of Civil Procedure (Act 5 of 1908), O. V. '" 20(1)-Scope of. 
Under s. 63 of the Income-tax Act a notice under the Act may be 
served as if it were a summons under the Civil Procedure Code. Order 
V, r. 20(1) of the Code prescribes two alternative methods of service 
when the summons could not be served in the ordinary way, 
namely, 
( 1) by affixing one copy of the summons in the court-house and another 
in a conspicuous part of the residential house or business premises of the 
party to be served; and (2) "in such other manner as the Court thinks 
fit". These words confer a discretion on 
the court to adopt any other 
manner of service and include a direction to affix a copy in such manner 
as to give notice to the person to be served, but without affixing a copy 
thereof in the court-house. 
[30!A-BJ 
Therefore, where proceedings under s. 34 of the 
Income-tax 
Act, 
1922, were started against the 
assessee, a Hindu Undivided family, by 
issuing a notice, but the notice could not be served on its karta, and the 
Income-tax Officer ordered substituted service by directing the process 
server to affix the notice only at the address of the assessee and satisfied 
himself that the notice was affixed in a proper manner, it must be held 
that the notice was properly served on ·the assessee. 
[299C-E; 30!F] 
Jhahar Mal Chokhani v. Commissioner of Income-tax 49 J.T.R. 391, 
overruled. 
Narendra Kishore Das v. Banamali Sahu Dibakar Sahu Firm, A.LR. 
1951 Orisso 312, approved. 
A 
B 
c 
D 
E 
Deccan Cooperative Bank Ltd. v. Parsram Tolaram, 
A.LR. 
1942 
·F 
Sind 96 and Narendra Prasad Sinlu1 v. Maharani Janki 
Kuer, 
A.I.R. 
1947 Pat. 385, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 580 of 
1966. 
Appeal by special leave from the judgment and order dated 
September 3, 1964 of the Punjab High Court in Income-tax Refer-
G 
ence No. 23 of 1962. 
B. Sen, T. A. Ramachandran and S. P. Nay.var for R. N. 
Sachthey, for the appellant. 
S. K. Aiyar and B. P. Maheshwari, for the respondent. 
The Judgment of the Court was delivered by 
Sikri, J. 
This appeal by special leave is directed again~t the 
judgment of the High Court of Punjab, Chandigarh, in Income 
Tax Reference No. 23 of 1962, made to it by the Income-Tax 
H 
A 
B 
c 
D 
E 
F 
G 
H 
C.I.T. V. DAULAT RAM (Sikri, J,) 
299 
Tribunal under s. 66 ( 1) of the Indian Income Tax Act, 1922. The 
following question was referred to the High Court :-
"Whether on the facts and the circumstances of the 
case the notice under section 34 of the Income-Tax Act 
was properly served on the assessee within the prescribed 
period." 
The relevant facts, in brief, are that the 
respondent, 
Shri 
Daulat Ram Khanna, hereinafter referred to as the assessee, is a 
Hindu Undivided family, and the dispute relates to the year of 
assessment 1945-46. Proceedings under s. 34 of the Income-Tax 
Act were started by the Income Tax Officer, 'B' Ward, Amritsar, 
against the assessee by issue of a notice on March 29, 1954. The 
Process Server went to the assessee's shop for service of the notice 
on the assessee on March 30, 1954, but he could not serve it on 
the assessee because the karta of the assessee was not present. The 
Process Server reported to the Income-Tax Officer on the same day 
that the assessee had refused to accept the service of the notice. 
On receipt of the said report, the Income Tax Officer, on the same 
day, i.e., March 30, 1954, sent the notice per registered post and 
also ordered substituted service of the notice by di_recting the Pro-
cess Server to affix the same at the address of the assessee. The 
notice was affixed on March 31, 1954. 
We need not give the 
facts regarding the service of the notice by registered post because 
it was received by the assessee on April 5, 1954. In view of the 
fact that the notice was affixed according to the directions of 
the Income-Tax Officer, he, after recording the statement of the 
Process Server, held that the service of the notice by affixture was 
proper. 
The a>sessee appealed. The Appellate Assistant Commis-
sioner, inter a/ia, held that as a copy of the notice was not pasted 
on th

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