1931 (6) TMI 3 - HC - Income Tax

Summary

Issues Involved:
1. Whether a person assessed under Section 23(4) is entitled to appeal to the Assistant Commissioner on the ground of non-liability under the Act.
2. Whether the proviso to Section 30(1) bars such an appeal.
3. Whether the assessee is liable to be assessed under the Act based on the facts of the present case.
4. The jurisdiction of the High Court under Section 66 when no appeal lies under the Income Tax Act.

Detailed Analysis:

Issue 1: Entitlement to Appeal under Section 23(4)
The court examined whether the assessee, who was assessed under Section 23(4), could appeal to the Assistant Commissioner on the ground that he was not liable to be assessed under the Act. The assessee argued that he was only obliged to furnish a return of his "total income" as defined in Section 2(15) and thus, if he had no income liable to assessment, he need not make a return. The court, however, found that Section 30(1) of the Act explicitly provides a right of appeal against the assessment, but the proviso to Section 30(1) bars any appeal in respect of an assessment made under Section 23(4).

Issue 2: Proviso to Section 30(1) as a Bar to Appeal
The court held that the proviso to Section 30(1) is conclusive and bars appeals in cases where the assessment is made under Section 23(4). The court reasoned that the Income Tax Officer has the authority to make a summary assessment if the assessee fails to make a return or comply with notices under Section 22(2) or Section 22(4). This summary assessment is final and not subject to appeal, thereby reinforcing the bar imposed by the proviso to Section 30(1).

Issue 3: Liability to be Assessed under the Act
The court addressed whether the assessee's income was liable to be assessed under the Act. The Assistant Commissioner had found that the assessee failed to make a return and comply with notices, justifying the summary assessment under Section 23(4). The court concluded that the Assistant Commissioner's decision to reject the appeal in limine was correct, as the assessee's failure to fulfill statutory obligations warranted the summary assessment. The court emphasized that the assessee's conduct in not making a return and not producing required evidence precluded him from questioning the assessment.

Issue 4: Jurisdiction of the High Court under Section 66
The court considered whether it had jurisdiction under Section 66 to entertain a case where no appeal lies against the assessment. The court determined that an order dismissing an appeal on the ground of being barred under the proviso to Section 30(1) is an order under Section 31, thus enabling the assessee to seek a reference to the High Court under Section 66. The court held that the Assistant Commissioner must decide if the assessment under Section 23(4) was genuine and if the appeal was indeed barred. If the Assistant Commissioner finds that the assessment was properly made under Section 23(4), he must reject the appeal without delving into the merits.

Conclusion:
The court concluded that:
1. A person assessed under Section 23(4) is not entitled to appeal to the Assistant Commissioner on the ground of non-liability under the Act, as the proviso to Section 30(1) bars such an appeal.
2. The Assistant Commissioner must determine if the assessment under Section 23(4) was genuine and if the appeal is barred by the proviso.
3. The High Court has jurisdiction under Section 66 to entertain questions of law arising from the Assistant Commissioner's order, even if no appeal lies against the assessment.
4. The assessee's failure to comply with statutory obligations justified the summary assessment, and his contentions regarding non-liability could not be entertained due to his own default.

The assessee was ordered to pay 20 gold mohurs as costs to the department.