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1939 (11) TMI 17 - HC - Income Tax

Issues:
1. Validity of the reference to the High Court under Section 66(2) of the Income Tax Act.
2. Compliance with Section 22 of the Income Tax Act regarding the return of income.
3. Assessment under Section 23(4) of the Income Tax Act and the right of appeal.
4. Registration of partnership and interpretation of the partnership deed.
5. Right of appeal against an order refusing to register a firm made before the amendment of the Income Tax Act in 1933.

Analysis:

1. The case was referred to the High Court by the Commissioner of Income Tax. The assessment was made under Section 23(4) of the Income Tax Act, which does not allow for an appeal against the assessment. However, as the reference was made in pursuance of a court order, it was argued that the Court cannot reconsider the need for the reference. Despite this, it was noted that the assessee did not comply with Section 22 of the Act by failing to submit a proper income return. The Income Tax Officer assessed the income based on the bills provided by the assessee, amounting to Rs. 3,72,727. The Court emphasized the substance of the assessment over the specific section under which it was made.

2. The Court highlighted that no appeal lies against an assessment made under Section 23(4) of the Act. It was established that the assessment in question was correctly classified under Section 23(4) by the Assistant Commissioner. The judgment referenced previous cases to support this interpretation, emphasizing the clarity of the law in this regard.

3. The Court acknowledged that if the assessment falls under Section 23(4) of the Income Tax Act, there is no right of appeal. Therefore, there would be no valid reference to the Court. The issue of partnership registration and deed interpretation was also raised, with the Court noting that before the 1933 amendment to the Act, there was no right of appeal against an order refusing to register a firm. The Court clarified that a decision on the other questions referred was unnecessary if the first question was answered in the affirmative.

4. In conclusion, the Court accepted the facts presented by the Commissioner in the reference and directed that a copy of the judgment be sent to the Commissioner of Income Tax. The Commissioner was awarded taxed costs, and it was specified that the deposit made should not be returned or set off against the costs payable by the assessee.

 

 

 

 

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