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Issues:
1. Jurisdiction of the Court to issue a mandamus based on the Commissioner's order. 2. Disputed assessment related to interest income for the year 1922-23. 3. Application of sections 22, 27, and 23(2) of the Income-tax Act. 4. Justification of assessment under section 13 based on the Income-tax Officer's estimate. 5. Consideration of accounts as the basis for assessment and the requirement of notice under section 23(2). Analysis: 1. The case was referred by the Commissioner under section 66 of the Income-tax Act, 1922, questioning the Court's jurisdiction to issue a mandamus due to the Commissioner's order being deemed incompetent. The Court rejected this contention, emphasizing that the Commissioner's order still stood and had not been set aside, thus maintaining its validity. 2. The disputed assessment pertained to an interest income item of Rs. 10,000 for the year 1922-23. The assessee's return initially reported an income of Rs. 866 from interest, but the Assessing Officer later assessed it at Rs. 30,000, leading to a series of appeals and reviews. 3. The Court delved into the procedural aspects under the Income-tax Act, highlighting the importance of sections 22, 27, and 23(2). It emphasized that if an assessee submits a return and presents accounts in support of it, the Assessing Officer must not reject the accounts without providing an opportunity for the assessee to justify them under section 23(2). 4. The Income-tax Officer justified the assessment under section 13, citing a personal estimate of Rs. 10,000 for the interest income. However, the Court found this estimate arbitrary and lacking a proper basis, as it did not explain the methodology or reasoning behind the assessment, thereby deeming it invalid. 5. The judgment stressed the significance of considering the accounts produced by the assessee as the basis for assessment, even if they are complex or irregular. It emphasized that the assessee's compliance with the notice under section 22(4) by presenting accounts warranted a fair opportunity under section 23(2) to address any objections, which was not provided in this case. Consequently, the Court deemed the assessment illegal and awarded costs to the petitioner.
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