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TMI Blog1927 (12) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ttedly carrying on three different businesses in Jullundur and Amritsar. Certain information received from Bombay led the Income Tax officer, Jullundur, to believe that there was a fourth business of this firm carried on at Jullundur under the name "Karam Chand-Dina Nath." A notice under Section 22(4), Income Tax Act, was issued to the firm to produce accounts of this business, but the petitioners failed to do so and stated that no such business existed during the year for which the assessments in the two references were made, viz., 1924-1925, and 1925-1926. The Income Tax officer thereupon proceeded to make an assessment to the best of his judgment under Section 23(4) on the ground that the petitioners had failed to comply with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of an inquiry under Section 23(3), but it was contended that the powers conferred by Section 22(4) are very wide and it was open to the Income Tax officer to issue notice under that Sub-section at any time during the course of the assessment. Radha Krishan & Sons v. Income Tax Commissioner, Punjab A.I.R. 1927 Lah. 5 was cited as an authority; but that ruling only deals with the question whether an Income Tax officer can call for accounts for the branch of a firm situated in a Native State. No authority directly in point has been cited; but, on a careful consideration of the provisions of Sections 22 and 23, the contention of the applicants, that a notice under Section 22(4) could not be issued after the commencement of an inquiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (4), Section 23 does not authorize a summary assessment in the case of a default under Section 23(3). The natural inference is that: the legislature did not intend that when a man has submitted a return, has complied with the terms of a notice (if any) issued under Section 22(4) at that stage, and has further complied with the terms of a notice issued under Section 23(2), he should be subjected for any subsequent default to the drastic penalty of a summary assessment which carries with it the further penalty of the loss of right to appeal. If it were held that an Income Tax officer could issue a notice under Section 22(4) even during the course of an inquiry under Section 23(3), it would be easy enough in many cases for the income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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