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Validity of assessment under Section 23(4) challenged in appeal under Section 33(1) without second appeal against Appellate Assistant Commissioner's order under Section 27. Analysis: The case involved a dispute regarding the validity of an assessment made under Section 23(4) of the Income-tax Act. The Income-tax Officer had assessed the income of the assessee at Rs. 10,000 based on estimated income, despite the assessee claiming a loss of Rs. 13,320-5-3. The assessee failed to produce necessary documents, leading to the assessment being made without proper verification. The assessee subsequently applied under Section 27 of the Act to cancel the assessment order and conduct a fresh assessment, citing inability to produce required documents. However, this application was dismissed by the Income-tax Officer, prompting the assessee to file appeals before the Appellate Assistant Commissioner against both the assessment order and the refusal to set it aside for a fresh assessment. The Appellate Assistant Commissioner dismissed the appeal against the refusal to set aside the assessment order but partially allowed the appeal against the assessment order itself. An appeal was then filed before the Income-tax Appellate Tribunal challenging the modified assessment. However, the Tribunal declined to consider the validity of the assessment under Section 23(4) as no second appeal was filed against the Appellate Assistant Commissioner's order under Section 27. The Tribunal's decision was based on the provisions of the Income-tax Act, which clearly delineated the scope of appeals against assessment orders and orders refusing to make fresh assessments. The Tribunal rightly pointed out that without a specific appeal against the refusal to make a fresh assessment, it could not delve into the merits of the assessment made under Section 23(4). The Court analyzed the pre-amendment and post-amendment scenarios regarding appeals against best judgment assessments and refusal to make fresh assessments. The amended Act provided for separate appeals against these two aspects, emphasizing that the assessee's right of appeal was limited to the quantum of the assessment or tax imposed. Ultimately, the Court upheld the Tribunal's decision, stating that the appeal before the Tribunal only pertained to the quantum of tax payable, and the question of sufficient cause for not complying with previous notices did not arise as no appeal was filed against the order under Section 27. Therefore, the Tribunal's decision was deemed correct, and the question referred was answered in the negative. In conclusion, the Court ordered the assessee to pay costs to the Department amounting to Rs. 300, bringing a resolution to the legal dispute surrounding the assessment under Section 23(4) and the subsequent appeals.
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