19131 PLP (Trib (PTD)

M. MAZHAR ALI (PRESIDENT).‑These two Appeals have been filed by a company to impugn learned Appellate Assistant Commissioner, Range, consolidated order dated 21‑1‑1979, relating to assessment under section 23(4) and the penalty order under section 46(1) of the Income‑tax Act The Assessee‑Company is engaged in export of crushed bone, bone‑meal etc. The discussion before us revealed that Return was filed on 30‑4‑1976, in compliance to notice under section 22(2) and declaring an Income at Rs. 10.000. Statutory notices under sections 2.3(2) and 22(4) were: issued to commence assessment proceedings but adjournments were obtained several times, and at times part‑compliance was made, with the result that proceedings dragged on till the Inspector effected substituted service by affixing the notice at the office of the Assessee. As none attended on the due date (18‑10‑77), the assessing officer recorded on Order‑Sheet that assessment would be completed ex parte. An order under section 23(4) was finally passed on 17‑11‑1977, determining Income at Rs. 2,00,

000. The Appeal before the learned Appellate Assistant Commissioner failed for, he agreed with the assessing officer that the Assessee had adopted dilatory tactics so as to wriggle out of the taxation knot, while the Department had shown all possible accommodation before resorting to an ex parte best judgment assessment. The learned Appellate Assistant Com missioner confirmed the quantum of income as the total credit entries in the Bank Statement stood at Rs. 25,00,

000. Departmental Representative, as usual, appeared without record. The learned counsel for the Assessee, however, placed on our record true copies of the order‑sheet entries, the report by the Notice server and the declaration by the Inspector, who had effected `substituted service'. It was explained by Mr. Mohammad Naseem, the learned counsel, that in his report dated 12-10‑1977 the Notice Server stated that: This, according to the learned counsel, clearly showed that the Managing Director or the Accountant were not contacted and that it was `other people', who refused to receive notices or to sign the acknowledgement. On the above report by the Notice Server, the assessing officer ordered: The Inspector should have served notices by affixture, if not possible otherwise." Mr. Naseem then drew our attention to the inspector's declaration dated 13‑10‑1977 which, inter alia, affirms: "Nobody in the office accepted notices". The learned counsel here also pointed out that there was no indication whether the Managing Director or the Accountant refused to receive notices. Mr. N. Ahmad then attacked the genuineness of the witnesses who are said to have witnessed 'the affixture of the notice by the Inspector. It was argued that signatures of one of the persons, whose address was of S. I. T. E., Karachi, was not legible. Moreover, there was no chance of a person from S. I. T. E., area to be present in S. Shah, where the office of the Assessee‑Company is situated about the other witness. Mr. M. N. (of Road, S. Shah) the learned counsel produced of copy S. Shah: Colony Sub‑Post office letter dated 25‑4‑1979 to develope the argument that no such address existed then. This document was admittedly not presented before the learned Appellate Assistant Commissioner and, therefore, cannot be taken note of by us now. The learned counsel thou submitted that the time, on which the notices were served by affixture, was not mentioned in the report, nor copy of the summons was exhibited on a conspicuous place in the Income‑tax Office, the learned counsel concluded that requirements of C. P. C. Order V having not been satisfied, service by affixture was invalid hence the assessment became void in the eye of the law and should be declared as such. For this assertion, reliance was placed on this Tribunal's decision dated 12‑2‑1975, on I. T. A. No. 2488 and 2489(K B) of 1973‑

74. The Departmental Representative, on the other hand, submitted that the conduct of the Assessee and the non‑co‑operative attitude was self‑evident from the fact that proceedings dragged on for 1 year during which time the Assessee, somehow or the other, avoided submission of such details and documents as could facilitate the finalisation of the assessment. The Departmental Representative insisted, with vehemence, that the important point was that factum of service was not denied, although formalities prescribed in Order V, of C. P. C. were alleged to have not been adhered to. Therefore, it clearly emerges that the Assessee had full knowledge about the case had been fixed for hearing on 11‑10‑1977, but he did not care to comply and hence the assessing officer was justified in resorting to an ex parte action under subsection (4) of section

23. The Departmental Representative concluded by saying that, quantum of Income assessed at Rs. 2,00,000 was a conservative estimate and a lenient treatment looking the credits in Bank Account which came to Rs. 25 lacs. After having heard the two Representatives, I notice that the learned counsel for the Assessee has mixed up aspects of "service by affixture by the order of the Court" and "service by affixture without the order of the Court". Before I proceed further, it would advantageous to refresh Rules 17, 19, 19‑A and 20 of Order V, C. P. C. Rules 17, 19 and 19‑A are to be read together because these relate to the `Substitute service without the order of the Court', while Rule 20 relates to the `service by the order of the Court': "Rule

17. Where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgement, or where the defendant is absent from his residence at the time when service is sought to be effected on him and there is no likelihood of his being found thereat within a reasonable time and there is neither any agent empowered to accept service of the summons on his behalf nor any other person upon whom service can be made, the `serving officer' shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain and shall then return the original to the Court from which it was issued with a report endorsed thereon or annexed thereto stating that he had so affixed the copy the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and in whose presence the copy was affixed." "Rule

19. Where a summons is returned under Rule 17, the Court shall, if the return under that rule has not been verified by the declaration of the serving‑officer, and may, if it has been so verified, examine the serving officer, on oath or cause him to be so examined by another Court toughing his proceedings, and may make such further inquiry in the matter as it thinks fit; and shall either declare that the summons has been duly served or order such service as it thinks fit. Rule 19‑A. A declaration made and subscribed by a serving‑officer shall be received as evidence of the facts as to the service or attempted service of the summons." "Rule 20.‑(1) Where the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy thereof in some conspicuous place in the Court‑house, and also upon some conspicuous part of the house (if any) in which the defendant is known to have last resided .or carried on business or personally worked for gain, or in such other manner as the Court thinks fit. (2) Service substituted by order of the Court shall be as effectual as if it had been made on the defendant personally. (3) Where service is substituted by order of the Court, the Court shall fix such time for the appearance of the defendant as the case may require". (Underlined* by me for emphasis) The mode of service discussed above are specifically spoken off as "substituted service", clearly manifesting that these are not service in the ordinary sense of the word but were service in an artificial sense upon affixation imported by necessity. It is true that these Rules are of highly penal nature and must be strictly 'complied with in order to give validity to the service purporting to be effected thereunder. The affixation of notices upon some conspicuous part of the business premises is one of the modes of service, which can be restorted to by the process‑server (Notice Server) of his own authority, if the circumstances so demand. On the other hand, provisions of Rule 20 can be invoked only when the whereabouts of the Assessee are known but he is actually found to be keeping out of the way to avoid service. In the present case, no such phenomena existed and there is no allegation that the Assessee was keeping out of the way for the purpose of avoiding service or that the summons could, not be served in the ordinary way. Therefore, report to Rule 20 was out of question. Sri fact, the assessing officer's direction dated 12‑10‑1977 to the Inspector `to serve the notices by affixture, if not possible otherwise', clearly left a wide discretion with the serving‑officer (Inspector) and the substituted service which he ultimately effected, was in exercise of his own judgement under Rule

17. The conditions precedent to hold a substituted service valid under Rule 17 (read with Rule 19) are: Refusal to receive, absence so as to receive, not likely to be available within reasonable time, no agent empowered to accept, Report to the Court stating of affixture, its circumstances, names and addresses of the persons who identified the place where the notices were affixed, and finally, examined by the Presiding Officer. The facts of the present case are indicative that the Notice Server made an attempt to deliver the notices and reported (on 12‑10‑1977) in categorical term that nobody in the office accept the notices 'and further that the Accounting was not available. The Inspector's report dated 13‑10‑1977 again mentions that "nobody in the office accepted notices". It is thus futile to argue that no attempt was made to serve the notice on the principal Officer (Managing Director or the Accountant). It is significant nothing was said by the learned counsel about the time at which the serving officer visited the premises of the Assessee for the purpose of service of notices. It is thus clear that the Inspector did visit the right place, at the right time, at which the Assessee (i.e. its principal officer) was expected to the present. Therefore it is beyond controversy that reasonable deligence was exercised for service of notices, but was refused by those who were present and the principal Officer etc., were not likely to be available within reasonable time so as to receive the notices. The serving officer duly returned the copy of the notice along with the declaration (dated 30‑10‑1977) reporting that notices were properly served by affixture, which is an evidence of the fact of services under Rule 19‑A. This declaration inter alia, states the circumstances which necessitated `substituted service' and contains names and address of the persons by whom the place was identified and in whose presence summons (Notices) were affixed. The assessing officer examined the Inspector, as was obligatory on 1.im under Rule 19, because the Inspector, had not filed the affidavit. The assessing officer finally felt satisfied that all the conditions laid down under Rule 17 stood fulfilled and the service by affixture was proper. This is clearly borne out by order- sheet entry dated 13‑10‑1977. I, therefore, have no hesitation to conclude that there was no irregularity in the service of notices under C. P. C. Order V, rule 17, read with section 63 of the Income‑tax Act, hence I UPHOLD the ex parte action under subsection (4) of section 23 as VALID. For this conclusion, I place reliance on Supreme Court of India's decision reported as (1967) 66 I T R

147. I do not see any force in the argument that a person from SITE area could not be present in Sher Shah, firstly, because no evidence was laid to establish that the concerned person was not present at the premises at the particular moment and, secondly, Sher Shah Colony is quite adjacent to SITE area. I am firmly of the view that Mr. N's objection about notices having not been placed on the Notices Board of the Office could be valid, had Rule 20 been pressed into service but, it has already been held by me above, this Rule was not resorted to by assessing officer. Again, facts in the Tribunal's decision dated 12‑2‑1975 (supra) are quite different and distinguishable hence do not, in any way, advance the case of the Assessee. Although I have held that the assessing officer was justified in resorting to frame ex parte assessment under subsection (4) of section 23, I do not feel satisfied with the quantum of Income assessed. It is well settled that while proceeding to inform an ex parte assessment, a more onerous responsi bility falls on the assessing officer, because the law requires him to make the assessment to the best of his judgment. The assessing officer is, therefore, expected to utilise all resources at his command to discover the correct extent and full quantum of business activities, by enquiries or by other means at his disposal, and not to make a mere guess which can be too wild at times and too lenient on others. In the present case, the assessing officer noted on the order‑sheet his intention to proceed ex parte on 18‑10‑1977. The assessment was finally framed on 17‑11‑1977. It was desirable that during this period of 30 days, the assessing officer should have investigated about the business activities and their magnitude so as to make a best judgment assessment of the Income. The assessment, however, bears no such imprint and presents a dismal story. By his own admission, the assessing officer simply examined the Bank Statement, which was obtaining on record, and showed credit entries aggregating Rs. 25,00,

000. The assessing officer obviously did not bother to find out the extent and enormity of turn‑over, the Gross Profit rate obtaining in this line and the over‑head expenses claimed or admissible, nor did he take any notice of such pertinent document as the copies of Trading Account, Profit & Loss Account the Balance‑sheet and other details like export, purchases etc., as were filed with him on 17‑5‑1977 and must be obtaining on his record. It is, therefore, clear that while proceeding to make an ex parte assessment the assessing officer made no serious attempt to make a best judgment assessment and resorted to a slip‑shod manner of making an estimate of `net income"'. The Tribunal has never hesitated to condemn this short‑cut method and has always emphasised the importance of judging the prospects and prosperity of business for estimating the quantum of income. The upshot of the above discussion is: while I CONFIRM the action of proceeding ex parte. I VACATE the order of the learned Appellate Assistant Commissioner and SET ASIDE the assessment for correct determination of Income after due and proper enquiries and after utilising all relevant material available on record, or otherwise. Penalty under section 46(1) The penalty was imposed at Rs. 1,65,446 on 5‑6‑1978 for non‑payment of demand for the assessment year 1975‑

76. As I have already set aside the quantum of Income assessed. I need not take long to CANCEL the penalty also, placing reliance on Lahore High Court decision in Begun Mumtaz Jamal's case reported as 1976 P T D

182. Conclusion The appeal against assessment proper SUCCEEDS partly while appeal against penalty order SUCCEEDS in full. M. MAZHAR ALI (PRESIDENT). [12‑11‑1979).‑‑I am sorry, I entertained an opinion different than the one expressed by my learned brother on the issue of service of notice by affixture effected on the appellant on 9‑10‑1977. But before proceeding further, I would like to add that if I were to agree with him in this behalf, I would have unhesitatingly reached the same conclusion and passed the same order on the merits of the case as has been done by my learned brother. In the assessment order the Income‑tax Officer has given a detailed account of the statutory notices issued and proceedings adopted on various dates from 17‑12‑1976 to 19‑10‑1977. Notwithstanding the several defaults in compliance with notices. The Income‑tax Officer condoned them, from time to time, and decided to issue fresh notices on several occasions. It is an admitted fact that it was on 9‑10‑1977 that the Income‑tax Officer finally issued notices under sections 23(2) and 22(4) for compliance on 18‑10‑1977. The Notice Server vide his report dated 12‑10‑1977 (reproduced in the order of my learned brother) returned stating that he (Process Server) had gone to the office of Messrs East and Export Limited, with notices but no one was, prepared to accept them. The Accountant also was not available. Hence the notices were returned unserved. This report of the Process Server, it may be noted, does not disclose the number of efforts made by him, the dates on which and time when he allegedly made efforts to effect service on the assessee. There is nothing discernible from this report that the Process Server had, after using all due and reasonable diligence, failed to effect personal service. The Process Server admit tedly did not resort to effect service by affixation, hence it is a sufficient circumstance to hold that the conditions which render it imperative for him to effect service by affixation as laid down by Order V, rule 17, C. P. C. did not exist. Hence rule 19 of Order V did not come into play. There is, to my knowledge, no rule 19‑A existing in the Civil Procedure Code in relation to the Province of Sind. Moreover, the report gives a clear indication that the assessee was avoiding to receive notices and hence the service by substituted means was to be made under Order V, rule 20, C. P. C., which runs .as under:‑ "

20. Substituted Service.‑(1) Where the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy thereof in some conspicuous place in the Court‑house and also upon some conspicuous part of the house (if any) is which the defendant is known to have last resided or carried on business or personally worked for again, or in such other manner as the Court thinks fit." It is pertinent to note that even after getting the report of the Process Server, the Income‑tax Officer was, definitely not satisfied and at least he did not put on record his satisfaction that there was reason to believe that the assessee was getting out of the way for the purposes of avoiding service, or that for any other reason the notices could not be served in the ordinary way. On the contrary, he did not manifestly exclude the possibility of personal service of notice on the assessee, as it is clearly borne out from a plain reasoning of his order dated 12‑10‑1977, to the "Inspector to serve notice by affixture: if not possible otherwise." By using the expression, "if not possible otherwise", the Income‑tax Officer, I think in unambigous terms still desired the personal service to be made. And hence he directed the Income‑tax Inspector to first make an effort to effect personal service of notice. Here, in my opinion, he did not proceed in accordance with law. Moreover, he also failed to comply with the mandatory provisions of law inasmuch as he did not order, "the notices to be served by affixing a copy thereof in some conspicuous place in the Court‑house (Income‑tax Officer in the instant case) and also upon some conspicuous part of the premises in which the assessee was known to have last carried on his business". There is yet another angle which escaped the attention of the Income‑tax Officer and it is the impossibility of service of notice in the ordinary way which vests in him the power to order the notices to be served by affixture or in such other manner as he deemed fit. Now the ordinary way of serving notice under section 63 of the Income‑tax Act, 1922, is the service by post. The alternate method of service of notice as visualised by section 63, is the method of service prescribed by Code of Civil Procedure, 1908, with regard to summons issued by a Court. There is nothing on record to show that the assessing officer has ordered the notice to be served on the appellant by post. If he had chosen to effect the service of notice, as if it were a summons issued by a Court, under the Code of Civil Procedure 1908, then he was duty -bound to comply with all the requirements laid down by the provisions of Order, V, rule 20, C. P. C., which were attracted to the facts of this case. For the foregoing reasons, with great respect, I do not agree with the view of my learned brother that the provisions of Order V, rule 17 were applicable to the facts of this case and that there was no irregularity in the service of notice. I would consequently hold the ex parte assessment to be bad in law and liable to be quashed. In the result, the appeal succeeds and the ex parte assessment is annulled. In these circumstances, the appeal against, the order levying penalty under section 46(1) for non‑payment of demand for the assessment year under appeal, should also succeeds. The order of penalty is accordingly cancelled. GHULAM MURTAZA KHAN (MEMBER). [1‑7‑1980].‑These appeals were heard by a Division Bench comprising of Mr. Muhammad Mazhar Ali, President and Mr. A. A. Zuberi, Accountant Member, on l2‑11‑1979. There being a difference of opinion between the learned Accountant Member and the learned President, the matter was referred to me for bearing and decision on the point of difference.

2. Briefly stated, the facts of the case are that several notices were issued by the Department under sections 22(4) and 23(2) etc. Some of these notices were complied with partly whereas the others remained unheeded for one reason or the other. The Income‑tax Officer then finally' issued notices under sections 22(4) and 23(2) for compliance on 18th December 1977. Since the Process Server failed to make personal service on the Directors or any other authorised person, he, on the instructions of the Income‑tax Officer, made substituted service of these notices on 13th October 1977. The assessee did not comply with the notices so served and hence the Income‑tax Officer finalized the assessment under section 23(4), on 17‑11‑1977. On account of the failure to make the payment, a penalty under section 46(I) amounting to Rs. 1,65,446 was also imposed on 5‑6‑1978. The assessee preferred appeals before the learned Appellate Assistant Commissioner, in his order, held the substituted service of notices, made under Order V, rule 20 of C. P. C. to be valid and the order passed under section 23(4) also the quantum of income were confirmed. The assessee's appeal against order under section 46(1) was also dismissed.

3. In appeal against section 23(4), the appellant has disputed the legality of the order because the service was not made on the assessee‑appellant in accordance with the law.

4. My learned brother, the Accountant Member, reproduced the relevant provisions contained in rules 17, 19 and 20 etc., of the C. P. C. and then after discussing the various facts, held that in the instant case the manner and the mode in which the service of notices was effected indicate that it was substituted service under rule 17 of C. P. C. read with section 63 of the Income‑tax Act and that the service was also valid as having been made according to the prescribed procedure. For these reasons the learned Accountant Member upheld the order passed by the Income‑tax Officer under section 23(4), although on the issue of quantum of estimate of income he set aside the orders of the departmental officers.

5. My brother, the learned President, on the other hand, was of the opinion that it was clearly a service made under Order V, rule 20 of C. P. C. Since the legal formalities, as prescribed in the law and aforesaid rule, were not properly complied with, the service of these notices could not be considered valid in law and hence the orders of the departmental officers below were not sustainable. Notwithstanding this finding, the learned President concurred with the opinion of the learned Accountant Member that; on merits, the quantum of income estimated was not sustainable and should be reconsidered.

6. I have heard Mr. Muhammad Naseem Ahmad, the learned counsel appearing on behalf of the appellant. He contends that from the facts of case it is abundantly clear that the substituted service of notice was made under rule 20 of C. P. C. and not rule 17, as held by the learned Accountant Member. Explaining the difference between the two rules, the learned counsel contends that one important distinguishing feature of rule 17 is that no specific order of the Court is required for making service under this rule. The serving officer, under circumstances mentioned in the rule, 17 is authorised to make the substituted service by affixing the notices on the last known business or the residential premises of the appellants in the presence of witnesses who identify the place and also witness the affixture. Later, the rule lays down that the serving officer has to be examined on solemn affirmation about the service of the notice before the witnesses etc.

7. Service made under Order V of rule 20 of C. P. C. on the contrary, presupposes an order of the Court directing the serving officer to make personal, service in the normal course and the same being not possible, tie has to make substituted service by affixing the notices at the known office/residential premises before the two witnesses who identify the place and the persons and also sign in token of having done so. The copies of the notices are also required to be affixed at the Court, or in this case at the office of the Income‑tax Officer concerned.

8. The learned counsel contends that since in the present case the substituted service was made on the specific directions of the Income‑tax officer, the service would fall to have been made under Order V of rule 20 C. P. C. In his opinion, therefore, since there was a definite order by the Income‑tax Officer for making the service it could not fall within the ambit of rule 17 of C. P. C. and for that matter the finding regarding validity of service by the learned Account Member was wrong in law. Further, the learned counsel contends that even if for the sake of argument, it is assumed that the service was made under rule 17 then also certain acts of commis sion on the part of the departmental officers render the service invalid. In the first instance, the learned counsel contends that of the two witnesses only one is identifiable and the name as well as the address of the other witness was illegible and vague. Secondly, the rule requires that the serving officer should file an affidavit before the Presiding Officer. In this case no such affidavit was filed by the serving officer; neither did the Income tax Officer record his statement on solemn affirmation to the effect that substituted service was made in accordance with the law. In the presence of these defects service could not be held as valid. In support of his contention that even small omissions can render the substituted service as invalid he cites the Judgment of the Supreme Court of India, reported as (1971) 82 I T R

888. In this case, while considering the validity of substituted service under rule 17, the learned Supreme Court held that in the: absence of the names and addresses of persons who identified the place of business and absence of affidvait by the serving officer to the effect that he personally knew the place of business of the substituted service could not be held to be valid. In another Indian case, decided by the. Punjab High Court, in Income‑tax Reference No. 29 of 1962, decided on 20th March 1963, the absence of pasting a copy of the notice at the office premises was necessary and absence of this requirement render the service invalid. A similar view was taken by the Allahabad High Court in the case of Jauharilal v. Commissioner of Income‑tax U. P., decided or; 31stMarch 1965, In this case a substituted service was ordered to be made under Order V, rule 20 of C. P. C. and a copy of notice was affixed on the residence of assessee but no copy was affixed on the Court house, i.e., office of the Income‑tax Officer. It was held that the service of notice was not according to law. On the basis of these decisions of the Courts, it is patently clear that compliance of formalities is necessary before a substituted service can be considered as valid. In the instant case, admittedly the position is that no affidvant as prescribed in rule 17 was received from the serving officer and this lapse alone rendered the service invalid. It is thus evident that, in the first instance and, with great respect to my learned brother, the Accountant Member I am of the opinion that, for the reasons mentioned by the learned counsel which could also not be repelled by the learned Departmental Representative the substituted service could not be considered to have been made under Order V of rule 17 of C. P. C.

9. The learned President, while writing his order, had examined the position in a broader perspective. With regard to the final notices issued by the Income‑tax Officer on 9‑10‑1977 for compliance on 18‑10‑1977, the Notice Server in his report dated 12‑10‑1977 (reproduced) in the order of the learned Accountant Member) returned the notice unserved stating that he had gone to the assessee with notices but no one was present to accept them. The Accountant was also not available, hence notices were being returned unserved. This report of the Notice Server, admittedly, does not indicate the nature of the number of efforts made by him to effect personal service on the assessee. As a matter of fact, substituted service is a recourse made only after the efforts to effect personal service fails hence, one of the conditions for service by affixture as laid down by Order V, rule 17, C. P. C. was not fulfilled. Secondly, as has been clearly admitted by both the parties in this case, there was an order by the Income‑tax Officer for effecting service. The order of the Income‑tax Officer dated 12‑10‑1971, reads as under:‑ "Inspector to service notice by affixture, if not possible otherwise." This order of the Income‑tax Officer clearly lays down that, in the first instance, efforts should be made to effect personal service of the notice. The Inspector, admittedly failed to comply with this important provision of law. The absence of dispatch of notices by post is another lapse as has been discussed by the learned President in his order. Secondly, this very order of the Income‑tax Officer makes it clear that tire service, in fact, was., being made under Order V of rule 20, C. P. C. This rule provided that a copy of the notices should also be affixed at some conspicuous place in the office of the Presiding Officer, i.e. the Income‑tax Officer. The learned Departmental Representative also does not dispute this fact. As has been held by the various courts, whose decisions have been cited in earlier paragraph this lapse alone on the part of the Department would have the effect of invalidating the service.

10. I, therefore, agree with the reasoning as well as the finding of the learned President opt the issue that the substituted service made on the assessee was not valid in law and hence the ex parte assessment shall stand cancelled. The Department will now proceed afresh after proper service of notices according to the provisions of law.

11. The appeal against the penalty order under section 46(1), for non‑payment of demand for the assessment year under consideration would also consequently succeed inasmuch as it will also stand cancelled.

12. The difference of opinion having been resolved, the two appeals stand disposed of as indicated above. ORDER OF THE BENCH In view of the difference of opinion on the point of validity of service of statutory notices upon the appellant, which led to the making of ex parte assessment, and the consequently effect thereof, the case is to be referred to some other Member as provided by section 5‑A(7) of the Income‑tax Act. Hence, it may be placed before the President for necessary orders. However in so far as the appeal against the penalty order is concerned, it is at any rate allowed, as above. Appeal allowed.