1942 (4) TMI 22 - HC - Income Tax

Summary

Issues:
1. Interpretation of Section 66(3) of the Indian Income Tax Act of 1922.
2. Assessment of income based on genuine accounts.
3. Discretion of the Income Tax Officer in determining the existence of separate account books.
4. Refusal of the Commissioner to refer questions of law to the Court under Section 66(2) of the Act.

Detailed Analysis:
1. The judgment deals with an application under Section 66(3) of the Indian Income Tax Act of 1922. The primary issue is whether the Income Tax Officer was justified in concluding that the assessee had another set of account books that were not produced. The Court found that this matter falls within the discretion of the Income Tax Officer, and there was evidence to support the conclusion. The Court held that this is a question of fact and cannot be referred under Section 66(3) for further review.

2. The applicant, a Hindu undivided family engaged in business activities, filed a return stating an income of &8377;6,000 for the relevant assessment year. However, discrepancies arose when the Income Tax Officer received information about unrecorded transactions. Despite multiple notices and appeals, the Income Tax Officer assessed the income at &8377;23,400 under Section 23(4) of the Act. The Assistant Commissioner upheld this assessment, leading to further applications for relief.

3. The Commissioner's refusal to refer questions of law under Section 66(2) was challenged through the current application. The Court noted that the only question at hand was the justification of the Income Tax Officer's belief regarding the existence of undisclosed account books. As this was deemed a factual matter falling under the Officer's discretion, the application was dismissed.

4. Ultimately, the Court concluded that the question of whether the assessee maintained separate account books was a question of fact. The application was dismissed with costs awarded to the Advocate-General. The judgment highlights the limitations of seeking judicial review under Section 66(3) for factual determinations made by tax authorities, emphasizing the discretion vested in such officials in assessing income tax matters.