1931 (6) TMI 6 - HC - Income Tax

Summary

Issues:
1. Whether the Income Tax Commissioner should be directed to refer certain questions of law to the High Court for opinion.
2. Whether the assessment made by the Income Tax Officer under Section 23(4) precludes the right to appeal.
3. Whether the case was properly treated as a "no return" case due to the partner's failure to furnish required particulars and comply with notice provisions.

Analysis:
1. The petition under Section 66(3), Income Tax Act, 1922, requested the Income Tax Commissioner to refer specific legal questions to the High Court. The firm involved in the case conducted business in one location but had partners residing elsewhere. Despite efforts to obtain necessary accounts and information, the partner addressed in the notice failed to provide the required details, leading to the Income Tax Officer treating the case as a "no return" situation. The partner's argument regarding the validity of the notice under Sections 42 and 43 was dismissed, as he had accepted the position imposed by the Income Tax Officer. The court held that the failure to furnish essential particulars rendered the case as a "no return" scenario, justifying the dismissal of the petition.

2. An appeal was lodged against the assessment made by the Income Tax Officer under Section 23(4). However, the Assistant Commissioner rejected the appeal citing Section 30 of the Income Tax Act, which deems such assessments as non-appealable. Despite attempts to extend the time for submitting the return and obtain necessary information, the partner failed to comply, leading to the assessment being finalized without the required details. The court concurred with the Assistant Commissioner's decision, emphasizing that the case fell under the purview of "no return," thereby upholding the inapplicability of the appeal process.

3. The partner's repeated assurances of attempting to acquire the essential information and accounts from other partners proved futile, resulting in the Income Tax Officer extending the return deadline twice. Despite these extensions, the partner could not fulfill the legal requirements, leading to the assessment being based on incomplete information. The court affirmed that the case was appropriately categorized as a "no return" situation, as the partner failed to provide the necessary particulars, rendering the appeal process inapplicable under Section 30. Consequently, the petition was dismissed, with costs imposed on the petitioner.