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TMI Blog1938 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... s referred to in the question is a company carrying on business in Bombay. The Hongkong Company is carrying on business in Hongkong. In respect of the year 1926-27 the Bombay Company was assessed to tax as the statutory agent of the Hongkong Company. The matter was in dispute and carried to the Privy Council who held that there was a business connection between the two companies and that the Bombay Company was properly assessed as the agent of the Hongkong Company. Thereafter the Hongkong Company purported to terminate any business connection with the Bombay Company. In respect of the year 1928-29 the Commissioner of Income tax again assessed the Bombay Company as the statutory agent of the Hongkong Company, refusing to believe the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 1934 the Income-tax Officer held that as the books had not been produced, the assessee were in default and he therefore made an order of assessment purporting to be to the best of his judgment under Section 23(4). In that assessment he assessed the Bombay Company at precisely the same figure as that at which they had been assessed in the assessment which this Court had held was not supported by any evidence. The assessee made an application for revision under Section 27 of that order which was stayed pending an appeal to the Privy Council. Later, in September 1934, the assessee applied to this Court for an order under the Specific Relief Act directing the Commissioner of Income tax to repay the sum of over 3 lacs of rupees which he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inion, that the Legislature could not have intended to impose a penalty on a person for non-production of documents which he was, in law, incapable of producing. Now, in the present case, there is not a particle of evidence that the Bombay Company is in a position to produce or cause to be produced the books of the Hongkong Company. It has been held by this Court and the Privy Council that there is no evidence to show that there is any connection between the two companies and it is not suggested that any further evidence has been obtained by the Income- tax Officer. He says that he has got some confidential information, but as it is not in evidence we do not know what it amounts to. There is no evidence which can justify him in saying that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness connection with the assessees. After holding that the Court had no jurisdiction to make an order under the Specific Relief Act, their Lordships then go on to say: Their Lordships cannot but agree, however, with the comments made by the learned Chief Justice upon the Commissioner's order of January 16, 1934, imposing as a condition of refund that E.D. Sassoon Co. Limited should undertake to be responsible for paying back the amount in case an assessment were levied again or the matter was taken on appeal to the Privy Council. So, too, in the case of the order of the Income-tax Officer dated February 20, 1934, making an assessment in default under Section 23(4) for failure to comply with the order of January 30, requirin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law stands there appears to be no means of compelling the Income-tax Commissioner to refund tax illegally levied. The answer to the question of the Commissioner is in the negative. We direct the Commissioner to pay the costs of the assessee on the Original Side scale. KANIA, J.--I agree. The short point which requires consideration, to answer the question raised in the reference, is the consideration of Section 22(4) of the Indian Income-tax Act. In my opinion, that section does not entitle the Income-tax authorities to demand the production of books which are neither the books of the assessees nor under their control. In the present case the Bombay Company, which is a limited company, was alleged to be the statutory agent of the Hong ..... X X X X Extracts X X X X X X X X Extracts X X X X
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