1929 (3) TMI 1 - HC - Income Tax

Summary

Issues:
1. Validity of assessment under section 23(4) of the Indian Income-tax Act
2. Legality and validity of the order under section 28 of the Act
3. Misdirection in finding about the genuineness of account books

Analysis:

Issue 1: Validity of assessment under section 23(4)
The petitioner challenged the assessment under section 23(4) on the grounds that the notice of the order was not personally served, and the notice did not comply with the provisions of section 22(4). However, the court held that the notice served on the accredited agent of the assessee was sufficient compliance with the law. The court also rejected the argument that the non-existence of the account books absolved the assessee from complying with the notice under section 22(4).

Issue 2: Legality and validity of the order under section 28
The Commissioner imposed a penalty under section 28, which was challenged by the petitioner. The court deliberated on whether it had jurisdiction to review the original order passed by the Commissioner under section 28. It was observed that the High Court could not require the Commissioner to state a case for an original order, as per the provisions of section 66 of the Act. Therefore, the court concluded that the issue regarding the order under section 28 did not arise in this case.

Issue 3: Misdirection in finding about the genuineness of account books
The court accepted the findings of fact arrived at by the Commissioner, emphasizing that it was not within its purview to reexamine the facts. The Commissioner's findings indicated that the account books produced by the assessee were different from the ones signed by the Income-tax Officer during a previous inspection. The court held that the Income-tax Officer had jurisdiction to issue the notice for producing the signed account books, and the non-compliance justified the assessment under section 23(4).

In conclusion, the court dismissed the application with costs, emphasizing that the points raised by the petitioner did not warrant further review or reference. The judgment highlighted the importance of compliance with notice requirements and the limitations on the High Court's jurisdiction to review original orders by the Commissioner under the Income-tax Act.