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TMI Blog1974 (3) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessment it would be necessary to set out the relevant portion from the assessment order: "Notice under section 34(1)(a) was issued with the approval of the Commissioner of Income-tax, Calcutta, and served upon the assessee. The assessee made compliance by furnishing a return. Notice under section 23(2) was issued. Sri G. Chatterjee, A.R. of the assessee, appeared and explained the return. The assessee is a partner of Babulal Mohanlal, Morar, Gwalior, and his share of profit of the firm as per allocation is Rs. 8,883. It appears from the share allocation report that the assessee received interest amounting to Rs. 6,333 and the A.R. of the assessee was asked to explain the amount on which interest was received by the assessee. Sri G. Chatterjee explains that the assessee has got no capital in the firm's account and he was asked to produce the books of accounts of the firm to prove the genuineness of the claim but he failed. In the absence of books of account produced, I cannot accept the claim of the assessee and having calculated interest at 6% it is noticed that the capital invested by assessee in the firm amounts to Rs. 1,05,550. As the assessee has failed to produce an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (2) a notice requiring him, on a date to be therein specified, to produce, or cause to be produced, such accounts or documents as the Income-tax Officer may require, or to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including, with the previous approval of the Commissioner, a statement of all assets and liabilities not included in the accounts) as the Income-tax Officer may require for the purposes of this section: Provided that the Income-tax Officer shall not require the production of any accounts relating to a period more than three years prior to the previous year." Section 23 deals with the procedure to be followed in the assessment. Sub-section (1) provides that if the Income-tax Officer is satisfied without production of any evidence or document by the assessee or without the presence of the assessee that the return filed is correct and complete then the Income-tax Officer shall make assessment upon the basis of that return. Sub-section (2) deals with cases where the Income-tax Officer is not satisfied without either requiring the presence of the person who made the return or the production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is enjoined to complete the assessment in accordance with law. Sub-section (4) of section 23 deals with cases which authorise the Income-tax Officer to make a best judgment assessment. The specified cases in which sub-section (4) authorises the Income-tax Officer to make the best judgment assessment are as follows: (a) If a person fails to make a return; or (b) fails to comply with the terms of the notice under sub-section (4) of section 22; or (c) fails to produce documents in support of the return on which he relies after notice has been given under sub-section (2) of section 23. In the aforesaid three circumstances the Income-tax Officer is enjoined to make best judgment assessment. In the instant case, the question is whether any of these three different situations contemplated by sub-section (4) of section 23 has happened in order to justify assessment under sub-section (4) by the Income-tax Officer. Counsel for the revenue contended that in this case there was a failure to comply with the notice under sub-section (2) of section 23. It was urged that notice under sub-section (2) of section 23 has been given. That fact is undisputed. It also is apparent that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (4) of section 23. But the next question is whether in such a case the assessee is entitled to move this court under article 226 of the Constitution without resorting to the remedies provided within the Indian Income-tax Act, 1922. Under section 27 of the Indian Income-tax Act, 1922, there is scope for application before the Income-tax Officer for reopening the best judgment assessment; there is also provision for appeal under section 33 against the aforesaid order. But in this case the learned trial judge has proceeded on the basis that the assumption of jurisdiction by the Income-tax Officer to make the best judgment assessment under sub-section (4) of section 23 was on an erroneous basis and as such without jurisdiction. Therefore, the petitioner was entitled to resort to an application under article 226 of the Constitution. In this connection reliance was placed on several decisions, viz., R. v. Shoreditch Assessment Committee [1910] 2 KB 859 (CA), Ujjam Bai v. State of Uttar Pradesh AIR 1962 SC 1621 and White Collins v. Minister of Health [1939] 2 KB 838; [1939] 3 All ER 548 (CA). It appears that in another application in the case of Mohini Debi Malpani v. Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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