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I.T.A Nos. 762 to 765(PB)/1986-87, decided on 4th August, 1987. (a) Income-tax

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---Ss. 56 & 61--Notice, service of--Issuance of two notices simultaneously one under S. 56 and the other under S. 61 not proper--Notice under S. 61 can follow that of S. 56, but cannot issue alongwith it.

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---Ss. 56 & 61--Notice--Refusal to accept service cannot be deemed as service--After refusal, fresh notice has to be issued directing service by substitution at a place known to be where the assessee last resided.

---Ss. 56 & 61--Notice, service of--Allegation of refusal of notice by assessee--Record not showing any report if assessee was found and notice under S. 61 was delivered to him or was refused by him--Report in respect of notice under S. 56 showing that it was refused by the assessee was available on record and department claimed that said report related to both the notices under S. 56 and S. 61, but it was act clear from the said report that it was about both the notices--Report in question was not altered by any witness before whom assessee refused to accept service--Held, it appeared doubtful it at all the process-server contacted the assessee for service.

Nemo for Appellant

Irshad Shaheen, D.R. for Respondent.

Date of hearing: 4th August, 1987.

Muhammad Siddique, assessee herein has filed these appeals questioning the order of learned AAC, dated 3-4-1987 for the charge years 1983-84, 1984-85, 1985-86 and 1986-87, by which he declined to interfere with the order of assessments passed a/s 63 of the Income Tax Ordinance, 1979 by the ITO.

The appellant is an individual running a tyre repairing workshop. He also sells new tyres. As such he was booked of the basis of external survey conducted on 7-4-1984 and given notice a/s 56 to submit his income return. He was also given notice a/s 61, but he did not respond, failing to file his return as also to appear in person before the assessing officer. Accordingly, ex parte action rules 63 was taken against him and on the basis of survey report assessment of these years were made as under: ---

He preferred appeals, but the learned AAC had declined to interfere and maintained the order of assessment. Therefore, these further appeals by him.

The appellant has not appeared to prosecute the appeals, though notice to him has been sent under registered cover. The appeals, therefore, are being disposed of in his absence, but on merits.

A look at the grounds of appeals would indicate that objection has been taken both against the quantum of sales adopted and the action taken a/s 63. With regard to sales it is stated that the appellant derives no income through sales, because he does not deal in new tyres, but only repairs old ones. Therefore, income on account of sales has unfairly been assessed. In regard to action u/s 63, it is denied that any notice was ever served on the appellant.

The point of notice appears more important as if it be found that no notice was served the proceedings would require to be quashed, and it will be unnecessary to go into the question of sales. It is apparent that notice a/s 56 was issued on 12-1-1987 for 21-1-1987. At the same time notice a/s 61 was also issued for the same day, i.e, 21-1-1987. No report in respect of notice a/s 61 seems to have been made, if the assessee was found and the notice was delivered to him or was refused by him. However, there is a report in respect of notice a/s 56 showing that it was refused by the assessee. The learned D.R. claims that the report relates to both of the notices, u/s 56 and 61. May be it is so, but it is not clear from the report that it is about both the notices. Then the report is not attested by any witness before whom the assessee refused to accept service. Therefore, it appears doubtful if at all the process-server contacted the assessee for service. Even otherwise two notices simultaneously-one-u/s 56 and the other a/s 61 were improperly issued. Notice a/s 61 can follow that of section 56, but cannot issue along with it. The ITO erred in issuing the notices both at one time. Then the refusal to accept service cannot in law be deemed as service. After refusal, fresh notice should have been issued directing service by substitution at a place known to be where the assessee last resided. This too was not done. Accordingly, I consider, the case requires to be processed again, starting with notice a/s 56.

The result is that I set aside all the assessments and direct that de novo action be taken, commencing with notice a/s 56.

M.B.A./424/T Order accordingly.

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