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TMI Blog1970 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... of a common judgment of the Mysore High Court in references made with regard to the assessments relating to the assessment years 1953-54 and 1954-55. For the assessment year 1933-54 the assessee was served with a notice under section 22(2) of the Income-tax Act, 1922, hereinafter called " the Act " on March 5, 1954. A similar notice was served in respect of the assessment year 1954-55 on June 5, 1954. The assessee failed to file any return in compliance with the notices. Thereupon, he was served with notices under section 22(4) for both the assessment years and was required to produce accounts on specified dates. None appeared on any one of those dates but applications were submitted praying for adjournment on certain grounds. The Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sufficient cause for non-compliance with the notice issued under section 22(4), was not bound to cancel the assessment made under section 23(4) and to proceed to make a fresh assessment even though there was no sufficient cause for non-compliance with the notice under section 22(2) ? " The High Court answered the question in favour of the assessee. Section 27 of the Act is in the following terms : " 27. Cancellation of assessment when cause is shown.---Where an assessee within one month from the service of a notice of demand issued as hereinafter provided, satisfies the Income-tax Officer that he was prevented by sufficient cause from making the return required by section 22, or that he did not receive the notice issued under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im (sub-section (1)). If he is not so satisfied, he must serve a notice requiring the person who has made the return to attend at his office or to produce or cause to be produced any evidence on which such person may rely in support of his return (sub-section (2)). Under sub-section (3) the Income-tax Officer, after hearing such evidence as may be produced by the person making the return in response to the notice issued under sub-section (2) or such other evidence as the Income-tax Officer may require to be produced on specified points, has to assess the total income of the assessee. It is provided by sub-section (4) : " If any person fails to make the return required by any notice given under sub-section (2) of section 22 and has not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this provision. Similarly, if that person fails to comply with all the terms of the notice issued under section 22(4) or if he fails to comply with all the terms of the notice issued under section 23(2), the Income-tax Officer must proceed to make an assessment to the best of his judgment. Section 27 empowers the Income-tax Officer to cancel the assessment when sufficient cause is shown but such cause has to be shown for each default. For the sake of illustration, if an assessee makes a default under section 22(2) by not filing a return pursuant to a notice received under that section and he also does not comply with the notice under section 22(4), he must show sufficient cause for non-compliance with both the provisions and he cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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