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TMI Blog1938 (10) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... e, can the Income-tax Officer assess under Section 23(3) of the Act to the best of his judgment?" The words 'to the best of his judgment' are used only in subsection (4) which requires the Income-tax Officer to make the assessment to the best of his judgment when there has been a default of the nature contemplated by the sub-section. Sub-section (3) directs the Income-tax Officer to make the assessment after hearing such evidence as the assessee may produce and such other evidence as the Income-tax Officer may require him to produce on specified points. No direction is given to the Income-tax Officer when assessing under sub-section (3) and the assessee fails to produce evidence or produces evidence which the Income-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake an assessment to the best of his judgment. I use the word 'material' advisedly because the Income-tax Officer is not confined to what would be evidence in a Court of law. The only difference between an assessment under sub-section (3) in a case like the one mentioned in the reference and an assessment under sub-section (4) is that the Act contemplates a more summary method when the Income-tax Officer is acting under sub-section (4) and this is by reason of the deliberate default of the assessee. The interpretation to be placed on sub-section (3) is to be gathered from the judgment of the Privy Council in the case of the Commissioner of Income-tax, Bihar & Orissa v. Maharajadhiraj of Darbhanga. In that case the assessee stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the question under discussion, namely, whether the Income-tax Officer when making an assessment on material which he himself has gathered shall disclose it to the assessee before making his assessment and give him an opportunity to adduce material in rebuttal and whether the Income-tax Officer should in his order of assessment set out the facts which he has taken into consideration when estimating the assessee's income for the year. There is nothing in the Act itself which requires the Income-tax Officer to disclose to the assessee the material on which he proposes to act or to refer to it in his order but natural justice demands that he should draw the assessee's attention to it before making the order. Information which the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d v. Commissioner of Income-tax, Punjab, the Lahore High Court appears to have read the section in this way and the Rangoon High Court appears to have done the same in Chan Low Chwan v. The Commissioner of Income-tax. I find myself unable to take the same view. Section 13 reads as follows:- "Income, profits and gains shall be computed, for the purposes of Sections 10, 11 and 12 in accordance with the method of accounting regularly employed by the assessee; Provided that, if no method of accounting has been regularly employed, or if the method employed in such that, in the opinion of the Income-tax Officer, the income profits and gains cannot properly be deduced therefrom, then the computation shall be made upon such basis and in su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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