Law: Income Tax Act, 1922

Section: 23,23(4),26A

[Income Tax Act, 1922 (XI of 1922)].....Sections 23(4), 26A-Best assessment-Refusal of registration-Notice of hearing to assessee for a date specified in the notice-Records not indicating that proceedings were taken up on the specified date of hearing and that the assessee actually defaulted-Ex-prate assessment for default of notice- Whether vaild- in law-Held no-Refusal of registration consequent upon ex-parte assessment- Whether sustainable-Held no. Cases referred to: Commissioner of Income Tax v. M. B. Qureshi & Ca., Lahore (1975) 32 Taxation 219 and Ahmad Din Abdul Razzaq v. Commissioner of income Tax (Unreported). JUDGMENT [The judgment of the court was passed by MUNAWAR ELAHEE RANA J).-This is an application made by the Commissioner of Income Tax, Lahore Zone, Lahore under Section 66(1) of the Income Tax Act (Act XI of 1922) referring the following question of law said to arise out of an order dated 25-10-1973 passed by the Income Tax Appellate Tribunal, Lahore in Income Tax Appeal No. 87 M.B. of 1972-73 relating to the assessment year 1970-71: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the order of refusal of registration under Section 26A of the Income Tax Act consequent upon the ex-parte assessment under Section 23(4) of the Act was not valid in law?" 2. The brief facts relevant for the disposal of this reference are that the respondent was conducting business at Chichawatni, District Sahiwal. The Income Tax Officer, Circle-A, Sahiwal issued notices under Section 22(4) and 23(2) of the Income Tax Act in connection with the assessment proceedings for the assessment year 1970-71 for 7-5-1973, but in the order-sheet on the file there is nothing to show that any proceedings were in fact taken by the Income Tax Officer on 7-5-1973. Nonetheless the Income Tax Officer completed ex parte assessment against the assessee under Section 23(4) of the Act on 16-5-1973 and simultaneouly on the same date also, although by a separate order, refused registration of the firm under Section 26A of the Act on the ground that the assessment was being framed under Section 23(4) of the Act. 3. The…

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